Administrative costs have been a common target in the mission to identify the drivers of America's high health care spending. And the American Medical Association is sounding the alarm on health insurers who it says are trying to hide these costs through manipulation of its medical coding system, the Current Professional Terminology.

Writing in a judicial advocacy post, the AMA is calling for Virginia's 4th District Court of Appeals to overturn a ruling that cleared Aetna and Optum of misusing CPT codes to charge an administrative fee when creating a patient's billing statement.

At issue is a $14.18 charge appearing on an Explanation of Benefits statement for Sandra Peters following a chiropractic visit. According to the lawsuit, Optum was listed as the provider of the network and included the code to bill an administrative fee to insurer Aetna. The court ruled against Peters, in part because "Under the Aetna-Optum relationship, Optum receives payments only from Aetna itself, never from an Aetna member or plan sponsor."

The codes are supposed to be used only for medical procedures, the AMA asserts, and not as a "catch-all" for elective charges to a health plan. In its brief, the AMA alleges that "the defendants searched for a CPT code that would be difficult for laymen to understand in order to 'bury' (their word) their administrative fees so that they could assert an unjustified, uncontracted charge … They assumed no one would understand and, because the charge looked official, no one would challenge it."

In addition, the AMA says the ruling was erroneous in treating Optum as an employer and concluding that Sanders was not ultimately responsible for the charge, stating that "they [Optum] are not providers like a physician or hospital, and that Aetna member Peters was asked to pay $14.18 for the charge."

Though this is just once lawsuit, the AMA stresses that it is a part of a larger issue and shows "evidence of systemic misrepresentations on the part of two health company giants, which administer benefits for millions of Americans."

Moreover, as cost-conscious employers and consumers increasingly are taking a closer look at the bills for the services they or their health plans are being billed for, the case should serve to further empower them to raise concerns about questionable codes.

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AMA alleges insurers misusing codes to hide administrative costs

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