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The Emperor Has No Clothes

The AMA’s Monopoly on CPT Billing Codes Is a Stranglehold on Patients, Doctors and American Healthcare

It’s time to call CODE BLUE on the American Medical Association. What was once the conscience and compass of American medicine has become a monopoly, feeding off the very system it was sworn to serve. Today, the AMA isn’t saving American healthcare—it’s selling it.

The non-profit American Medical Association (AMA), once the North Star of American physicians, no longer exists to serve doctors or patients, but the organization itself. What began in 1845 as an organization focused on scientific advancement, medical education, ethics, and public health has become  a monopoly that has stripped medical education to the bone, brutalized medical professionals and helped destroy the US healthcare system.

In the 1950s, 75% of U.S. doctors were members. Today, fewer than 15% belong. As its moral authority has withered, the AMA found a more lucrative identity—not as a physician and patient advocate, but as a royalty-collecting corporation. Today, the AMA’s primary source of income are the billing codes every doctor must use to get paid by Medicare or insurance companies. Each use of one of the 11,000 Current Procedural Terminology (CPT) codes, copyrighted by the AMA, acts like a silent toll.  As a result, in 2023, the AMA reported $468 million in revenue, with the bulk generated from CPT code royalties. Their CEO earns over $3 million annually (2023 AMA Annual Report)—ten times a family physician’s income. In the past decade, the AMA has extracted more than $1.5 billion from this monopoly.

The Hidden Tariff on Every Healthcare Transaction and Patient-Doctor Interaction

Here’s the catch: no one voted for this. The CPT code monopoly wasn’t legislated by Congress or debated by the public. The monopoly relies upon a legacy license, quietly handed down by Medicare without a public auction, giving the AMA private, perpetual control over the financial language of American medicine, with no oversight, no competition, no accountability. Doctors can’t treat patients without first paying tribute to a system that’s turning them into data entry clerks.

The Fallout: Patients Pay the Price …and Doctors on the Brink

While the AMA thrives, American healthcare is flatlining. Physician reimbursements from Medicare have dropped 33% since 2001. Over 70% of doctors now work for corporations, not communities. Worse, they now spend more time coding than caring. Unsurprisingly, physician burnout has soared up more than 50% in just a few years.

Today, we live with the results of flawed policies the AMA actively backed. In 1997, the AMA-approved Balanced Budget Act froze federal funding for medical residencies. Nearly 30 years later, demand for care has soared while the available funding for residency training has remained nearly static. Fewer residencies means fewer doctors. Ultimately, patients pay the price in long waits and declining access. Access to medical care is particularly hard to come by in rural and underserved communities. Nearly 1 in 5 Americans have not seen a doctor in more than five years (). Wait times are dramatically on the rise with as much as 30% increase in the average wait time for a physician over the last 5 years in some medical specialties. And close to 1 in 5 patients now wait up to 3 months to see a doctor.

Meanwhile, the AMA sits atop a gold-plated empire built on billing codes. Under the guise of a non-profit organization, the AMA is operated a parasitic royalty business, sucking funds from physicians, then 80% of the tax-exempt revenue on General and Administrative (G&A) expenses – largely salaries and internal expenses – not on public causes and advocacy. Over the past decade, the AMA has extracted over $1.5 billion in royalties from its monopoly. The costs are significant and weigh heavily on American healthcare – the US spends 1,000% more on CPT-related billing than Europe, according to a Stanford study. Coding costs in the U.S. run more than $172 per bill, compared with $16 per bill in the Netherlands. The second highest billing costs come in at $50 per bill, in Australia. 

It is time for CODE BLUE or DNR on the AMA’s Convalescent Monopoly

To remove the corrosive decay from the backbone of American healthcare, citizens, physicians and patients must work together. The good news is, we can start today.

First, AMA members must demand transparency, ethical leadership, and a renewed mission. Abolish the copyright monopoly, waive the royalties and the copyright, and put CPT codes in the public domain, where they belong.

Next, let the specialty medical societies assume expert ownership and management over the billing codes in their respective domains without the additional overhead of a bloated AMA bureaucracy. Then, modernize the entire billing paradigm using open-source LLM-AI tools that can dramatically streamline and improve the efficiency of the archaic CPT billing system

Finally, Congress must investigate the financial structure of the AMA and its conflicts of interest stemming from CPT code royalties, as well as its tax-free status. Consideration should be given to the proposal to distribute the ill-gotten $1 Billion in tax-exempt profiteering filling the AMA endowment coffers to the many medical societies who represent 90% of the doctors in America and who fight in the trenches for patient advocacy and advancement of the medical profession every day.

The patient-doctor relationship is sacred. It should not be mediated by monopolies. By rebuilding a system where medical care is dictated by need, not code, we can restore the trust, dignity, and mission of American medicine.

RECENT PROPOSALS TO BREAK THE CPT MONOPOLY

References

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