AMA to Maintain Medical Billing Code Monopoly

Critics contend protecting this proprietary billing codes doctors use to submit insurance claims accounts for the AMA's support of health reform

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January 6, 2010 -- As Democrats tout the American Medical Association's endorsement of their health care overhaul, critics are pointing to their studious sidestepping of a little-known monopoly that sends millions into the trade group's coffers each year, saying it's no surprise the Democrats were able to gain the AMA's support.

The AMA, which this year reversed its long-standing opposition to such changes, holds the exclusive rights to the medical billing codes that doctors are required to use when they submit bills to insurance plans. They are the equivalent of a bar code for nearly every medical procedure, from transplanting hearts to tucking tummies and scoping colons.

It is a monopoly that critics say gets in the way of making health care less expensive and potentially more effective.

The arrangement is the product of a once-secret deal, struck in the early 1980s, that allowed the government to streamline billing procedures for its insurance programs by setting a single code set as the standard. Under that deal, the AMA maintains and updates the codes at no cost to the government, but generates millions each year selling the code books and software licenses to doctors and insurers.

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It's a shame that the government allows this to go on especially when we've got such an enormous problem with our current health care. We should be looking for ways to cut down on costs not allowing companies to hold us hostage for their own financial gain. Kimberly