Rep. James Comer (R., Ky.), the Chair of the House Oversight Committee, wants a briefing from the Centers for Medicare & Medicaid Services (CMS) that he hopes will get to the bottom of rising healthcare costs in America.
In a letter obtained exclusively by the Washington Reporter, Comer wrote to CMS Administrator Dr. Mehmet Oz, asking him for answers about the federally-mandated Current Procedural Terminology (CPT) code system, which is the standard for billing in both Medicare and Medicaid; those codes, which are created and maintained by the American Medical Association (AMA), are the foundation of the healthcare billing system. Comer is concerned about CMS’s reliance on them for Medicare and Medicaid, due to the federal reliance on a privately maintained system.
Comer’s questions follow the Reporter’s coverage of controversy surrounding the AMA’s neurostimulator coding review panel, a little-known body that helps shape CPT codes used by Medicare and private insurers to determine payment rates nationwide. These coding decisions can directly influence whether certain procedures are financially viable for providers to offer at all. Despite the stakes, the AMA has declined to disclose the panel’s membership to the Reporter, raising transparency concerns as questions mount about potential conflicts and industry influence tied to the process.
Comer wants Oz to clarify a series of questions he has, including about “CMS’s assessment of the extent to which CPT coding complexity contributes to improper billing, including upcoding and unbundling”; “data on improper payments in Medicare and Medicaid attributable to coding errors or manipulation, including trends over time”; as well as “any constraints — statutory, regulatory, or operational — that limit CMS’s ability to modify or move away from the current CPT-based system.”
The Kentucky lawmaker also wants to know about “steps [that] CMS is taking to detect, prevent, and recover payments associated with improper CPT coding”; “CMS’s process for evaluating coding patterns associated with high-cost or high-severity billing levels,” and whether CMS has considered administrative or regulatory actions to simplify coding requirements or reduce opportunities for improper billing.
CPT codes were developed in the 1960s by the AMA to address the lack of a uniform system for describing physician services. Initially a voluntary standard, CPT established a common nomenclature fo medical documentation, billing, and reporting. It has since expanded into a comprehensive framework of thousands of codes, updated annually to reflect changes in clinical practice and technology.
CPT became embedded in federal health care programs in the late 1970s, when Congress directed the Health Care Financing Administration, now the Centers for Medicare & Medicaid Services, to adopt a uniform coding system for Medicare and Medicaid. A 1983 agreement formalized CPT’s use while preserving AMA ownership, and the Health Insurance Portability and Accountability Act later codified it as the national standard for electronic transactions. Though effectively mandatory across the health system, CPT remains privately owned, generating roughly $300 million annually in licensing revenue for the AMA. Critics say this dynamic is tantamount to a government-gifted monopoly of the language of medicine.
The Reporter has extensively covered how the AMA has used those proceeds to fund lawfare targeting priorities of President Donald Trump and his administration. The Reporter has also covered potential conflicts of interest in the AMA’s system.
During the COVID-19 pandemic, the organization filed amicus briefs supporting eviction moratoriums in cases such as Alabama Association of Realtors v. HHS and Skyworks v. CDC, arguing that evictions posed a public health threat. In cases including Roman Catholic Diocese of Brooklyn v. Cuomo and Danville Christian Academy v. Beshear, the AMA backed government restrictions on religious services and private schools, contending such closures were necessary to limit virus transmission.
Beyond pandemic-related litigation, the AMA also supported expansive interpretations of gender identity protections, putting it once again at odds with both Trump and Comer. In multiple cases, including U.S./L.W. v. Skrmetti and Brandt v. Rutledge, the AMA defended access to gender-affirming care for minors and opposed state-level restrictions on such treatment. The organization also filed legal briefs supporting public funding for sex reassignment surgery in veterans, endorsed students’ rights to use restrooms and compete in sports according to gender identity, and defended school policies requiring teachers to use preferred pronouns.
The AMA’s litigation efforts have extended to immigration as well. In Department of Homeland Security v. Regents of the University of California, the AMA opposed the Trump administration’s rescission of DACA, citing its potential impact on medical students and underserved communities. In California v. McAleenan, it filed to block federal rules that would expand the detention of unaccompanied migrant children, citing mental and emotional health concerns.
This latest push from Comer comes as House Republicans are undertaking systemic investigations of what Rep. Jason Smith (R., Mo.), the Chair of the House Ways and Means Committee, categorized as “health care empires.”
Comer wants CMS to hone in on the CPT codes because of their complexity and lack of transparency; these fuel concerns that there may be improper billing, which would drive up costs for both patients and taxpayers.
Concerns about fraud have animated major congressional and Trump administration action in recent weeks, and when it comes to hospital billing, there is plenty that Comer and his committee could turn to.
His office noted that the Department of Health and Human Services (HHS) Office of Inspector General found that hospital billing at the highest severity level rose nearly 20 percent from FY2014 to FY2019, reaching 40 percent of Medicare inpatient cases. In a parallel vein, the Department of Justice (DOJ) recovered $2.2 billion in fraud and false claims settlements by the end of FY2022.
One healthcare expert noted to the Reporter that “the larger question is why CMS has never subjected the code set underpinning Medicare and Medicaid billing to competitive procurement.”
“A natural reform would be for CMS to issue a request for proposals and require the contract for any national billing code framework to be competitively rebid on a fixed cycle, such as every ten years,” the healthcare veteran added. “Other areas of government routinely use competitive procurement for critical infrastructure and operational systems, particularly in defense and major administrative contracting.”