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Sermo Wars with AMA Over CPT Codes

 |  By HealthLeaders Media Staff  
   July 09, 2009

It's hard to tell who's cheating, who's lying, or who kicked whom out of the house first.

But the partnership between the American Medical Association and Sermo, the online physician social-networking site, is now in tatters, with such nasty invective it now seems way past divorce. Unseemly though it may seem, all-out war with the House of Medicine has now been declared.

The rancor surfaced July 1 when Sermo founder Daniel Palestrant, MD, posted a letter to the Sermo blog headlined "The Biggest Risk to US Physicians: The AMA."

Palestrant accused the AMA of lying to cover up a precipitous decline in its membership, having business conflicts of interest and cozy relationships with health insurers "while profiting from a reimbursement system (the CPT codes) that makes it increasingly difficult for physicians to practice medicine."

All this came just a few weeks after the AMA opposed backing a public plan option, which many Sermo members strongly support.

Now, the relationship between them, in which the AMA was allowed to use Sermo to access physicians' online dialogue and "and deliver that message to the powers that be" for a health reform agenda, Palestrant says, is definitely over.

As unlikely as it may seem, Sermo is a more likely choice to replace the AMA as the legitimate voice of America's doctors, he says.

Yesterday, Palestrant topped his July 1 posting by releasing results of a Sermo member survey showing the extent of the forum's dissatisfaction with the AMA.

The survey revealed that 54% of physicians responded that they were unaware the AMA owns, maintains, and profits from sales of the complex compendium of CPT (Current Procedural Terminology) codes, which have been in use for 43 years. Doctors use the codes as a kind of universal language to categorize the value and type of their care in order to bill payers, from insurance companies to the government, in order to be appropriately paid. The 2009 edition is available on Amazon for under $90.

Palestrant accuses the AMA of receiving "approximately $70 million in 'licensing fees' from anyone who needs to use those codes. Add to that insurance companies (who pay the AMA many of those millions) who can use the CPT coding system to further their own gains at the expense of the physicians, and it starts to make you realize why CPT codes have been so conveniently left out of the current debate."

"Do you think that it is right that the AMA makes more money from selling licensing for CPT codes than it does from membership dues?" his survey asked. 87% percent of 661 doctors answering said, "No."

In his posting yesterday, entitled "Why physicians always get screwed, Thanks AMA," Palestrant wrote, "Not only do we have to maintain an extraordinary overhead of staff to submit, resubmit and document around CPT codes, the system robs the physician of any leverage we have with payors."

The AMA yesterday was just starting to recover from the broadside. Last night, it sent a six-paragraph e-mail response from AMA board chair Rebecca J. Patchin, MD, which did not mention Sermo. It read in part:

"The AMA takes great pride in the precision and uniformity of CPT and invests millions of dollars annually to revise and maintain codes that reflect the ever-changing realities of medical practice.

"The AMA alone foots the bill. While these expenses are recouped and profits are gained from the sale and licensure of CPT products and information, the AMA uses this income to tackle a sizable agenda on behalf of America's patients and physicians – initiatives such as health insurance coverage for all Americans, Medicare payment reform, relief from unfair managed care business practices and championing important public health issues, to name just a few," she said.

Two years ago, when the relationship began, it was forged as a kind of trade. The AMA News ran ads for Sermo to recruit participants. In exchange Sermo let the AMA access the physicians' online conversation to get feedback from the front lines of medicine, for use in shaping legislative or organizational policies.

Yesterday, the AMA said its board member, Joseph M. Heyman, MD, posted this statement in response to Palestrant's on Sermo July 1.

"We need to set the record straight on the information in Dr. Palestrant's post. The truth is that AMA membership numbers are public information, and there has been no precipitous decline in AMA membership over the last two years, as Dr. Palestrant suggests," Heyman wrote. "With about a quarter million members, the AMA is the largest physician organization in the country, and through the AMA House of Delegates, comprised of elected physician and medical student representatives from all state and national medical specialty societies, it is the only physician organization that gives all physicians a voice in the future of medicine."

"Twice a year the AMA House of Delegates meets to debate and vote on in public the most important policy matters facing medicine today. Last month, for example, the AMA House of Delegates met to vote on key elements of health system reform. It was a vigorous debate that ended with the following declaration of commitment: AMA supports health system reform alternatives consistent with principles of pluralism, freedom of choice, freedom of practice and universal access for patients.

"At that same meeting, President Obama chose to give his major health reform speech to AMA physicians. Not only has President Obama shown that AMA physicians are integral to the health reform process, but a recent Kaiser Family Foundation poll shows that the American people trust physician groups like the AMA to do the right thing on health reform as well."

Heyman said in his post that AMA advocacy is "well documented and unfailing. We are actively engaged to permanently fix the broken Medicare physician payment system and have a big victory on that this week," and continue to work on antitrust, medical liability reforms, a streamlined insurance claims system, and so much more. "As for relationships with insurers, we continue our high-profile fight against insurer abuses that hurt physicians and patients."

"As for Dr. Palestrant's sudden 'change of heart' regarding the AMA, one can only speculate. He ardently courted the AMA when launching his business two years ago, and now he expresses scorn immediately following the end of that business relationship. The AMA door is always open to Dr. Palestrant and all physicians who would like to join with us to make a positive difference in medicine – especially those who feel their views differ from the policies set by the physicians of the House of Delegates. We urge you to join with us to make a positive difference in the lives of physicians and patients in our nation," Heyman wrote.

Meanwhile, the dialogue yesterday on Sermo was approaching 1,000 postings and has been colorful to say the least. While most seem to cheer Palestrant on, not all of them do.

"Dan, you are out of line," wrote one obstetrician gynecologist who objected to Palestrant's use of the survey to criticize the AMA. "The AMA may not represent all my views, but they certainly represent them more than you do. I always thought you created Sermo to allow honest dialogue between physicians. Now it feels like you did it in order to create a platform for yourself."

But far more contributions are like this one: "The AMA having the rights to license CPT codes and forcing us to use them is antitrust in that there is no alternative. This is called a 'monopoly' and is against the law."

And this one. "The AMA, by creating and promoting CPT codes, the same CPT codes which have made our jobs so unpleasant and costly, have clearly shown their allegiance is NOT with physicians, but rather with themselves and insurance companies. . . .They should call themselves the American Insurance Association, since that is who they benefit the most."

Palestrant, a surgical resident in Boston until three years ago, decided to launch Sermo, a Latin word meaning "conversation" to enable physicians who normally practice in isolation to talk to each other.

Sermo does not accept advertising or charge physicians who become users, he says. But it does make money by serving as a vehicle through which pharmaceutical companies, government entities, market researchers and others pay Sermo to access what those practicing on the front lines have to say.

He said the partnership with the AMA was originally a good thing. But over the years, he said, "it became increasingly clear, the AMA didn't care about what we had to say. And we began to have more and more questions about AMA business practices and the size of their community.

"It all came to a head with the current healthcare debate, and our community felt very strongly that the AMA was fabricating its membership numbers. Health reform is now taking place. And the physician community is so angry. We knew we had to take action."

Meanwhile, physician bloggers are having a field day with the fight as well.

"Wow, things are starting to get quite nasty here. The marriage has turned into an ugly war," wrote Joseph Kim, MD, an MIT engineer.

"I'm not sure bashing the most influential physician advocacy organization in the country, in terms of Congressional lobbying power and money, is the most productive strategy right now," wrote blogger Kevin Pho, an internal medicine physician in Nashua, NH. "Politicians will find it easier to ignore multiple, fragmented physician advocacy groups rather than a single, unified physician voice."

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