The Government Calls the AMA's Codes a 'Monopoly.' The Government Made Them Mandatory.

The federal government does not often accuse itself of anything. In the Medicare physician payment rule it proposed this July, for calendar year 2027, it came close. Near the back, in a request for public comment, the Centers for Medicare and Medicaid Services asked what “harms or challenges” flow from what it called, in its own text, the American Medical Association’s “monopoly over CPT-4 licenses”. The word monopoly is the government’s. So is the monopoly.

The mandate did not begin in 2000, but that is where it hardened. The codes are older than the rule, and since 1983 the government had leaned on the AMA’s system for physician services through HCPCS, of which Current Procedural Terminology is the core. What the 2000 rule did was make it the law of the wire. On August 17, 2000, the Department of Health and Human Services published the HIPAA transaction and code set rule, codified at 45 CFR Part 162, naming the code sets a provider must use on a standard electronic claim. For physician services it specifies CPT, “maintained and distributed by the American Medical Association.” Not recommended. Required. Since the compliance date, a doctor’s office, a hospital, or the billing vendor working for either that wants Medicare, Medicaid, or a commercial insurer to pay a standard electronic claim has had to describe the service in a private trade association’s copyrighted language, and license the right to do it.

Follow the money, because the AMA files it. In its 2024 return the association reported $546.2 million in total revenue, of which $301.4 million came from royalties, 55 percent of everything it took in. The filing does not break out CPT by name, but licensing the code set is the bulk of that line, and the number is close to the one Health and Human Services Secretary Robert F. Kennedy Jr. reached for in late August, when he pointed the public toward the comment docket and said organizations across the health system paid the AMA more than $300 million last year to use the codes. That more than half of a professional society’s income now rides on a mandate the society helped secure is why the arrangement has drawn federal scrutiny at all.

The licensing revenue is the visible half. The more consequential half is who decides what each code is worth. When Medicare shifted to a resource-based fee schedule in 1992, the AMA convened the Specialty Society Relative Value Scale Update Committee, known as the RUC. The AMA’s own description of it is not in dispute: it seats 32 members, 22 of them appointed by national medical specialty societies. Those societies survey their own members on how much work a procedure takes, the committee turns the surveys into recommended relative values, and CMS then decides what to pay.

On paper the agency holds the final vote. In practice, by the Government Accountability Office’s count, CMS has adopted between 60 and 77 percent of the RUC’s recommendations. The people who bill a service recommend what the service is worth, and the agency writing the checks signs off most of the time. The Center for American Progress and the Medicare Payment Advisory Commission have pressed versions of this objection for close to twenty years, warning that the government leans on a body of specialists with a direct financial stake in the answer. The July request cites that longstanding concern by name. The accusation and the accused are the same institution, arriving late to its own indictment.

The record supports a narrow claim, and the narrow claim is the damning one. The documents establish the mandate, the money, and the makeup of the committee. They do not establish that any particular Medicare value is wrong because a specialty society set it, and they do not establish fraud. What they establish is a conflict of interest built into the plumbing, disclosed in ordinary filings, and left in place for a quarter century. That is smaller than saying the AMA rigged the fee schedule, and it is worse, because nobody had to break a rule for it to happen. The rule is the arrangement.

The loudest published case for competition comes from someone who sells a competitor. The article that put this fight in front of a general audience ran September 4 at the Brownstone Institute under the headline “More Access. More Choice. Less Cost.”, and it argues that abolishing CPT would solve the wrong problem, that the real fix is competition among code sets. It is a serious argument. It is also written by Margaret Hampton, president of ABC Coding Solutions, whose product, the ABC code set, is exactly the kind of competitor that would gain if HHS pried open the mandate. Her evidence is not nothing: she points to a 2003 to 2005 Alaska Medicaid pilot that processed more than 2 million ABC-coded claims. Her critique of the monopoly can be correct and her company can profit from breaking it. Both are true, and a reader is owed both. On this beat, the argument for competition and the interest in competition wear the same name more often than anyone likes to admit.

The authority to end the arrangement sits where it has always sat, with the agencies that wrote it. CMS has not proposed to change the standard. It has opened a docket and set the comment window to close on September 14, 2026. A question in a proposed rule is not a proposed rule. Until one exists, the codes stay mandatory, and the royalties clear on schedule.

Sources

1. Fierce Healthcare – CMS seeks public feedback on the “AMA’s monopoly” over CPT codes
2. Federal Register – HIPAA Standards for Electronic Transactions, 45 CFR Part 162 (Aug. 17, 2000)
3. ProPublica Nonprofit Explorer – American Medical Association, 2024 Form 990 (revenue and royalties)
4. American Medical Association – Composition of the RVS Update Committee (RUC)
5. Healthcare Dive – GAO on CMS adoption of RUC recommendations (60% to 77%)
6. Medical Economics – Kennedy asks the public to weigh in on the AMA’s control of CPT codes by Sept. 14
7. Medscape – AMA Faces Federal Scrutiny Over CPT Code Revenue
8. Center for American Progress – Rethinking the RUC
9. Brownstone Institute – Margaret Hampton, “More Access. More Choice. Less Cost.” (Sept. 4, 2026)