American Medical Association's Secret Pact with the Federal Government

[Guest guest]

" Let's take back medicine from this moneymaking machine of AMA-generated

regulation. While the AMA, in its own words, 'is a successful business

entity' medical practice must remain an ethical profession focused on

providing quality care to patients -- not extorting multi-million dollar

publishing revenues fees from doctors to pay six-figure salaries to AMA

honchos. "

American Medical Association's Secret Pact with the Federal Government

By Schlafly, Esq.

http://www.mercola.com/2001/aug/22/ama.htm

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Schlafly is General Counsel for AAPS (American Association of

Physicians and Surgeons) . He is a graduate of Harvard Law School and has

served as an Adjunct Professor at Seton Hall Law School.

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On April 27th, the AMA hosted a self-described " Flyin " for physicians to

express their comments and outrage about the new E & M Documentation

Guidelines (the " Guidelines " ) due to go into effect on July 1st.

As Dr. Nino Camardese discovered when he flew to this event, however, the

AMA denied entrance even to its own longstanding members, unless handpicked

beforehand. In fact, the AMA limited attendance and discussion to a

predetermined set of physicians and administrators.

By coincidence, Dr. Jane Orient, Executive Director of American Association

of Physicians and Surgeons (AAPS), qualified for admission by virtue of her

leadership position in her county medical society. After an initial delay

in conceding that Dr. Orient may attend, the AMA ultimately allowed her to

participate.

At the meeting, numerous physicians expressed their genuine outrage at the

AMA for developing these onerous Guidelines. Many of the questions were

insightful, and the AMA failed to answer many of them in a satisfactory

manner. Among dozens of questions, however, none were as revealing as one

simple question presented by Dr. Orient.

Like a scene from Alfred Hitchcock's famous movie The 39 Steps, Dr. Orient

asked the AMA the following question:

" Does the AMA have a contract with the federal government, and when will

they release the details of the contract to [the AMA] membership? " (1)

The AMA had apparently never informed its members - or physicians at large

- about the details of its secret pact with the government. Meeting

attendees seemed taken aback by this startling question from Dr. Orient.

And as in the movie classic, Chairman Reardon of the AMA had no alternative

but to admit the existence of such a contract. But Chairman Reardon then

ducked the second half of the question, and tacitly refused to disclose the

contents of the contract - even for AMA members.(2)

AAPS is not so easily thwarted, however. After all, it was AAPS that sued

the Clinton Administration to stop the complete government takeover of

medicine, and it was AAPS that won both politically and legally. AAPS's

judgment of $285,864.78 against the government was issued by Judge Royce

Lamberth in December 1997.(3) AAPS also took its case to the American

public, which rendered an analogous verdict in repudiating Clinton's health

care plans in the 1994 Congressional elections.

Upon the foregoing confirmation that the AMA does have a pact with the

government, AAPS proceeded to ferret out the details. Requests of HCFA for

the contract and related materials were greeted with bureaucratic stalling.

Numerous letters to the AMA from one of its own distinguished members were

met by stonewalling. The refusal by the AMA to turn over these essential

documents - even though the AMA directors call themselves " Trustees "

-raises serious questions whether there is a continuing breach of their

legal duty of trust here.(4)

Undeterred, AAPS obtained a copy of the secret AMA/HCFA contract from a

source independent of both the AMA and HCFA. Here is its very first

contractual requirement:

1. HCFA shall adopt and use [the AMA's] CPT-4 in connection with HCPCS, for

the purpose of reporting physicians' services under Medicare and Medicaid.

HCFA agrees not to use any other system of procedure nomenclature in HCPCS

for reporting physicians' services.(5)

Under this initial provision, the AMA thereby grabs a monopoly over the

government-imposed coding standards for physicians.

Yet in its response to the recent outrage about the Guidelines, the AMA

repeatedly implied that HCFA was the perpetrator.(6) The AMA thereby

conducted a charade by which it was the supposed defender of physicians

against government requirements.(7)

For example, the AMA President responded to the outrage by declaring:

" Everywhere I go these days, physicians ask me about HCFA's 1997 Revised

Documentation Guidelines for Evaluation and Management Services.

Since then, we've been meeting with HCFA face to face to voice your

concerns. " (8) One attendee at the " Flyin " even asked whether the AMA could

take its name off of the Guidelines, apparently unaware that the

AMA-controlled CPT Editorial Panel was the perpetrator.

The above-quoted contractual obligation mandates that HCFA must enforce the

coding systems developed by the AMA. The AMA thereby imposes requirements

on physicians through the name of HCFA, by virtue of this secret pact

between the AMA and HCFA. This contract has been in effect since 1983.(9)

The second clause of the contract eliminates any doubt about HCFA's

contractual obligation to enforce the AMA's codings:

2. HCFA shall: (a) publicly endorse the use of CPT-4 based HCPCS for the

purpose set forth in paragraph 1; ( where permitted by HCFA's statutory

authority and budgetary constraints, require the use of CPT-4 based HCPCS

in programs administered by HCFA by its agents and other entities

participating in those programs; and © encourage the voluntary use of

CPT-4 based HCPCS by others.(10)

There it is: the AMA imposes its onerous coding regulations on physicians

in the name of HCFA.

Virtually every crime has a motive, and the motive here money. Lots of it.

The AMA declares on its Web site that the AMA " generates approximately

two-thirds of its annual $200 million operating budget from non-dues

sources. " (11) Of that $133 million in non-dues revenue, the AMA's

publication revenue, including sales of those expensive CPT code books, is

its most prominent source.(12) T

The victims of these endlessly complicated revisions to codings are

physicians rendering private medical care. Each year physicians pay

substantial costs and expend precious hours trying to keep up with the

rules imposed by the AMA's CPT money-making machine. The time and money

lost by physicians due to the AMA could be far better spent in the service

of patients.

Recently a 3-judge federal panel in the 9th Circuit had the following to

say about this contract between the AMA and HCFA:

" On the undisputed facts in the record before us, we conclude the AMA

misused its copyright by licensing the CPT to HCFA in exchange for HCFA's

agreement not to use a competing coding system.

The plain language of the AMA's licensing agreement requires HCFA to use

the AMA's copyrighted coding system and prohibits HCFA from using any

other. ...The controlling fact is that HCFA is prohibited from using any

other coding system by virtue of the binding commitment it made to the AMA

to use the AMA's copyrighted material exclusively.

Conditioning the license on HCFA's promise not to use competitors' products

constituted a misuse of the copyright by the AMA. " (13) Harsh language

indeed by the federal judges in unanimously condemning the AMA's conduct.

Unlike The 39 Steps, however, the AMA's scheme does not end simply with Dr.

Orient's asking of the question. To the contrary, the AMA Web site now

boldly declares that " the Association is developing a next-generation CPT,

called CPT-5, to be launched this spring. " (14) And who will pay for the

additional regulatory burden imposed by the AMA? Private physicians, of

course - unless AAPS can end the scheme first.

Physicians must and will take back their esteemed profession from this

moneymaking machine of AMA-generated regulation. While the AMA, in its own

words, " is a successful business entity " that includes " for-profit

subsidiaries, " medical practice must remain an ethical profession focused

on providing quality care to patients.(15)

What You Can Do To Stop the AMA

On August 7, 2001, U.S. Senate minority leader, Trent Lott (R-MS) sent a

letter to HHS Secretary Tommy calling for an end to the American

Medical Association's monopoly on " CPT " codes that doctors are required to

use to bill Medicare and Medicaid.

Sen. Lott deserves everyone's support in his effort to pull the rug out

from under the AMA's secret monopoly on these codes. While it is a very

complex issue, any doctor will tell you that the AMA's stranglehold on

government billing has been a major cause of the fear and intimidation in

which doctors are now forced to practice medicine.

Elimination of this AMA cartel will do more to protect patients than any

Patients' Bill of Rights law. We only hope that Sen. Lott's motivation is

indeed patient protection, not political manipulation to curb the AMA's

donations to the Democratic party, and that he'll see this all the way through.

The AMA is desperately in need of the Congressional sunshine that Sen. Lott

can focus. A 3-judge federal panel in the 9th Circuit has already ruled

that the AMA misused its copyright, but getting specifics has been tough.

In 1997, the AMA's then-president, Reardon, finally admitted to the

secret contract when questioned at a meeting by the American Association of

Physicians (AAPS) executive director, Jane Orient.

The AMA apparently had never informed its members - or physicians at large

- about the details of its secret pact. Meeting attendees seemed taken

aback -- even more so when the Dr. Reardon refused to disclose the details.

We're talking some big bucks here. The AMA admits on its Web site that it

makes more money on publishing than from member dues -- to the tune of

about $133 million in non-dues revenue, including sales of those expensive

CPT code books.

Let's take back medicine from this moneymaking machine of AMA-generated

regulation. While the AMA, in its own words, 'is a successful business

entity' medical practice must remain an ethical profession focused on

providing quality care to patients -- not extorting multi-million dollar

publishing revenues fees from doctors to pay six-figure salaries to AMA

honchos.

Help Sen. Lott Keep His Word

Call, fax or Email Sen. Lott to tell him to stick with this investigation.

Remind him:

1. The AMA is NOT a unanimous voice for physicians

2. The AMA shouldn't be given a government monopoly to makes tens of

millions of dollars bilking doctors, who must pass along the costs to patients.

3. The CPT codes should be free -- just like IRS forms, or any other

paperwork required by the government.

Here's How To Send Your Message

1. EMAIL: senatorlott@...

2. PHONE: Sen. Lott's Washington office -- (202) - 224-6253, Fax (202) 224-2262

3. AMA Website: Tell Sen. Lott and the AMA what you think -- log on to

www.ama-assn.org/grassroots , and click on connect with Congress. Be sure

to send the AMA a copy of your comments.

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References/Endnotes

1. Transcript of the tape recording of the meeting, AAPS files, Tucson,

Arizona.

2. Ibid.

3. AAPS v. Clinton, Order by Judge Royce C. Lamberth dated 12/18/97

granting motion for attorney fees, costs and sanctions against Leon E.

Panetta, Alice Rivlin, Hillary Rodham Clinton, H. Brown, B.

Reich, Donna E. Shalala, Lloyd E. Bentsen, Les Aspin, Brown, Carol

Rasco, Ira Magaziner, Pres. Task Force, Judith Feder by plaintiff and

directing the defendants to pay to the American Association of Physicians

and Surgeons, Inc., the sum of $285,864.78.

4. Bingham v. Ditzler, 309 Ill. App. 581, 33 N.E.2d 939 (1941).

5. Agreement, The Department of Health and Human Services Health Care

Financing Administration and American Medical Association, signed February

1, 1983 by H. Sammons, M.D., Executive Vice President of the AMA and

S. Schweiker, Secretary of HHS (emphasis added). Readers are

invited to review this agreement as posted on the AAPS Web site at

http://www.aapsonline.org under Departments, Medicare, E & M.

6. Getting the Facts About E & M. American Medical News 1998;41(12):1A-4A.

7. Ibid.

8. Ibid., p.4A (emphasis added).

9. Agreement, op.cit.

10. Ibid.

11. AMA Web Site, http://www.ama-assn.org/employ/workplac/affil.htm.

12. Ibid.

13. Practice Management Information Corp. v. The American Medical Ass'n,

121 F.3d 516, 520-21 (9th Cir. 1997), modified on reconsid. 133 F.3d 1140

(9th Cir. 1998).

14. AMA Web Site, http://www.ama-assn.org/sci-pubs/amnews/pick_98/pick0525.htm.

15. AMA Web Site, http://www.ama-assn.org/employ/workplac/affil.htm.

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