The Evils of CPT®

Yours for only $114.95!
Yours for only $114.95!

Current Procedural Terminology (CPT®) codes are 5 digit codes for billing procedures performed by physicians in the United States.  The use of these codes is mandated by all insurers and the whole CPT® coding system forms Level I of the CMS (i.e. Medicare and Medicaid) Healthcare Common Procedure Coding System (HCPCS) code set.  The system is complicated and changes yearly.  This year there have been major changes in the coding of electrophysiology procedures.  In a characteristically inconsistent and confusing fashion some codes have been bundled together and other haven’t.  An example: the ventricular tachycardia ablation code includes 3D mapping, but the atrial fibrillation code doesn’t.  Great!  These changes are well covered here.  Reading this and dealing with these procedures on a daily basis, I toyed with the idea of incorporating an electrophysiology coding module into my mobile app, EP Mobile, or spinning off a separate app (since many who download my app are non-Americans, for whom this information is totally useless).  Certainly since use of these codes is mandated by the federal government, I could just go to the CMS website and download the codes I needed, since they are part of the HCPCS code set.   Wrong!  They aren’t there.  If you go the the relevant CMS website you will read:

Issues related to the application of Level I HCPCS codes (CPT-4) for physicians will be referred to the AMA. See Related Links Outside CMS below.

CPT® codes are copyrighted by the American Medical Association.  They are only available through the AMA.  Worse, the AMA has a licensing policy for use of these codes.  Presumably hospitals, codes, doctor’s offices, insurers, and maybe even our government through CMS pay not only for the yearly updated coding books published by the AMA, but just to use these codes.  What about using the codes in a computer program like my app?  To quote from the AMA website:

I am developing a product that will contain CPT codes. Do I need permission from the AMA?

Yes. The AMA holds copyright in CPT and use or reprinting of CPT in any product or publication requires a license. To use CPT codes in a product that will be sold or distributed to others, please obtain a distribution license.

And how much will this distribution license cost me?

What is the fee for a distribution license?

The royalty for the use for CPT material in an electronic or Internet product is $14 per user per product. Depending on the terms of the License Agreement, royalties are due either quarterly or semi-annually in arrears. Print publication royalty is $14 per distributed copy. No minimums or upfront fees are required. You will, however, need to purchase the CPT data file separately.

 

Not very practical for an app that is free or costs 99¢ like EP Mobile.  So much for that idea.

The AMA makes money from the CPT® system.  How much money I won’t say.  Last time a quote was made on the Internet about this, the AMA lawyers came calling.  It is outrageous that this coding system that is used throughout the United States — in fact whose use is mandated by CMS — is proprietary and not in the public domain.   Having an inconsistent and constantly changing coding system that is not easily available to either health care provides or patients does not serve the best interests of our health care system.  Nice work, AMA lobbyists!

About mannd

I am a retired cardiac electrophysiologist who has worked both in private practice in Louisville, Kentucky and as a Professor of Medicine at the University of Colorado in Denver. I am interested not only in medicine, but also in computer programming, music, science fiction, fantasy, 30s pulp literature, and a whole lot more.

5 thoughts on “The Evils of CPT®

  1. As usual, a great post! In my view, the AMA speaks for so few of us (clinicians in subspecialty practice, mine cardiology) I would elect the march with pitchforks option.

    1. Hi David, do you know if doctors have to pay for a license fee of CPT codes as well? For example, if a doctor needs to create an itemized receipt for a patient because he is out of network and the patient will submit a claim, does he need to pay for use of CPT?

      1. You can only get access to the codes through the AMA for a price. I doubt individual doctors buy the coding books or software, but someone in their billing and coding department must.

  2. per the 2013 990 – royalties were $76 million, They have $475 million in investments (cash) and pay their vp’s over $500,000 and the CEO $1.45 million.

  3. This tight control that the AMA has on these codes is one of the main causes for the high cost of healthcare, IMO. If I understand their licensing correctly, even random casual website users would require a license. At $16(?) / user, licensing on CPT codes is cost prohibitive for any app with a wide audience. Somehow, our government requires the use of CPT codes through HIPAA, yet the AMA (who profits tremendously from its use) enforces small user bases through its restrictive licensing. This practice of enforcing data silos prevents transparency, hampers the open market, and, therefore, contributes to the high cost of healthcare. This is lousy foresight by our government at best, and absolute corruption at worst.

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