Note: Descriptions are shown in the official language in which they were submitted.
CA 02653488 2009-01-22
METHOD FOR CONTROLLING THE PURCHASE OF HEALTH CARE PRODUCTS
AND SERVICES
This invention relates to a method for controlling the purchase of health
care products and services. More particularly the invention relates to a
method of
administration of healthcare information storage and payment options through
the
use of a smartcard linked to an open and independent Internet-based operating
system. This system can be used by any hospital system, insurance provider or
personal health record system (PHR) if those users have a need to link patient
records or any other relevant data with financial data.
BACKGROUND OF THE INVENTION
US Patent 7,434,729 (Cracchiolo) assigned to American Express and
issued October 14, 2008 discloses an arrangement by which a financial
institution
manages requests for payment of health care services using a credit card by
separating the total price into parts which are covered by a payment plan and
parts
which are not and by extracting payment from different accounts accordingly.
The
system is owned and managed by the financial institution which supplies the
cards,
manages the transactions and holds the funds. While described as a "closed
loop", it
is an exclusionary closed loop and does not allow for open management, or any
other management of accounts, payments or payment instruments, including cards
other than those deemed appropriate through the rules of the financial
institution.
While many various embodiments of the Cracchiolo invention are described in
their
CA 02653488 2009-01-22
2
Patent, it is understood that they all relate to these financial institutional
control
features and are limited in all respects to that definition.
The concept known as 2.0 Health represents the consumer-centric
transformation of the US healthcare system. 2.0 Health is characterized by the
ability to rapidly share, classify, summarize and distribute individual health
information with the goals of improving healthcare systems and thus the
experience
and outcomes for patients and stakeholders. We believe that the addition of
the
arrangement described hereinafter to the system concept greatly enhances the
ability of the model and provides an almost limitless potential in providing
benefits to
the general public.
While the tools and techniques to create the new health paradigm are
still being defined, it is clear that static, online systems known as personal
health
record systems or PHRs are limited in their ability to fully optimize the use
of
available technologies. By incorporating the technology herein described into
a PHR
platform to extend its use, the consumer-based movement in healthcare might
take
a quantum leap forward.
Presently the US healthcare system, the most complicated in terms of
delivery and payment in any developed country, results in consumers paying
healthcare providers $250 billion and insurance companies paying providers
$1.3
trillion annually. This system spends 15 percent of each health care dollar on
payment mechanics. In contrast, the retail industry spends 2 percent.
CA 02653488 2009-01-22
3
This climate offers a tremendous opportunity beyond the sharing and
exchange of information, through forging a link between the delivery of health
care
services and the adjudication and settlement of financial records.
Current processing of transactions in the health care system is clearly
inefficient and needs reengineering. Major US corporations are investing
heavily in
personal health record systems (PHR) and electronic health record systems
(EHR)
but the two aren't yet linked. Definition of standards is illusive; system
constituents
are varied and splintered in dialogue and intent.
Validated by what they feel will be consumer-driven market demand,
many healthcare operatives have raced to launch online personal health record
programs (PHR) basing their models on non-financial motivators. PHR systems
are
designed to enable patients and physicians to exchange essential health
information, thus empowering both the patient and doctor with the tools to
make
better choices regarding patient health. PHR program format allows users to
collect,
store and share health information with family members and offers a choice of
third-
party applications and devices to help them manage other health factors such
as
fitness and diet.
A primary weakness of PHR systems is, however, while they allow the
aggregation of patient information, they do not support a common information
format
(Continuity of Care Document) that would communicate with hospital or clihic
information systems. Without a standardized information format, providers may
not
trust or use the data as it may be professionally unsuitable and legally
risky. Despite
CA 02653488 2009-01-22
4
the lack of current connectivity, exchangeability, and information flow, the
highest
value of PHRs is seen as their future interoperability which could create a
savings to
the system of $19 billion annually. Most new development is attending to this
area
of weakness with the belief that once standards are in place, alignment
between
systems and economies of scale will follow.
Economic reasons to use PHRs may suggest a more compelling
model and various methods of linking payments to health information exist.
While
payment options aren't considered in any analyses of PHR systems, low adoption
rates for the current systems should demand that alternative implementation
models
be considered.
Linking payer contracts to payment platforms through a PHR system
creates an economic package beneficial to all stakeholders. Smart health cards
as
an information, platform have been universally adopted in most other countries
around the world. Smart cards link the patient's PHR to the health system's
EHR
with pocket portability in a format that provides security and authentication.
As a payment method, although only 20% of consumer healthcare is
currently paid for through "plastic" card sources, this number is expected to
grow to
30% by 2010. Some US companies offer this alternative format for payment, but
cannot link the PHR. For example, the smart debit card associated with
Consumer
Directed Healthcare Plans (CDHPs) is a start but does not provide "closed
loop"
authentication, nor does it carry any patient/provider/payer information, or
the ability
to access healthcare services outside of a designated provider.
CA 02653488 2009-01-22
PHRs are in the early phase of their use as a universal public
healthcare utility but the value proposition for the format is still unclear.
Several
years after a strong launch by leading companies including Microsoft and
Google,
the initial excitement about PHR has yet to translate into solid evidence that
there is
5 a widespread need. Consumer adoption rates have been low despite the size of
the
investment by many companies. Although 70% of Americans have access to PHRs,
only about 2% are using them.
Given the system-wide commitment to PHR use and the focus that
entire healthcare systems and organizations are putting on their universal
implementation, there needs to be clear motivators that will recover the value
potentials of -PHR systems. Static information storage and retrieval functions
are not
inducement enough to build interest. Many PHR companies are adding on
commercial features in the hope that something will "catch on", but these
innovations
are after the fact. The original intent upon which PHR was founded needs to be
reworked to offer healthcare solutions that will drive consumer usage higher.
This
new invention can be added to enhance PHR and provide a far more compelling
value proposition for consumers.
SUMMARY OF THE INVENTION
It is one object of the invention to provide a method for controlling the
purchase of health care products and services.
According to one aspect of the invention there is provided a method for
controlling the purchase of health care products and services comprising:
CA 02653488 2009-01-22
6
providing an automated clearing house (ACH) managed by an
independent card-clearing service organization (ISO) or processing center for
managing communications of financial and medical data;
providing a holder of funds for payment for the health care products
and services;
supplying to each of a plurality of users a card having card data
thereon;
defining for the users a plurality of authorized merchants of health care
products and services;
selling to each of a plurality of subscribers, a health care system in
which a plurality of users associated with the subscriber are provided with
funds to
pay for health care products and services from the plurality of authorized
merchants;
each of the subscribers being arranged to place a selected amount of
funds for each user associated with the subscriber in an account associated
with the
user held by the cardholder;
providing to each of the authorized merchants a conventional merchant
terminal for payment of funds by card;
providing to each of the authorized merchants a method by which their
merchant number will be communicated to the ISO for payment of funds by a
card;
providing a series of codes each identifying one of the health care
products and services to be supplied by the plurality of authorized merchants;
in each purchase transaction, on presentation of the card by a user to
CA 02653488 2009-01-22
7
pay a price for one of the health care products and services, causing the
merchant
terminal to communicate data to the ISO containing the price, some or all of
the card
data, the merchant number and the code to the ISO;
the ISO being arranged for each purchase transaction to obtain data
from the holder of funds as to the availability of the necessary funds in the
account
of the user and to authorize payment of the price to the merchant in the event
that
the merchant number is authorized and the funds are sufficient to pay the
price;
providing linkage to a Patient Heath Record (PHR) system for storing
for each user the codes of health care products and services purchased by the
user
in association with the user;
and, for each purchase transaction of health care products and
services purchased by the users, separating the code and storing the code in
association with the user at the PHR.
The arrangement herein provides therefore a computer based method
to facilitate purchases of a plurality of healthcare products and services,
utilizing a
payment card or other transactional device or method issued by an independent
card-clearing organization (ISO) that accesses a special spending account via
existing merchant terminals and Internet payment methodology.
The payment transaction also associates the provider's medical
information to the payer using a universal coding method, such as the ICD-9
code
and the standard POS merchant terminals transmit the data.
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8
No special or additional equipment is required but only authorized
merchant terminals registered to the system can be used to make payments.
Merchants/providers become authorized through a registration process which
includes supplying their merchant number associated with their terminal. The
entry
of a merchant number into the system links that merchant to the automated
clearing
house network in a closed loop.
The Automated Clearing House (ISO) is certified to carry out
transactions worldwide. Transactional steps are. comprised of: authorizing a
the
provider's point-of-sale merchant terminal, offering payment for services at a
registered provider with a proprietary payment card, accessing funds deposited
to a
subscriber's spending account from either that registered merchant terminal or
alternatively, a computer-based Internet website hosted for the single
purpose,
causing the subscriber's health spending account to be debited for amount of
the
item. The subscriber's spending account is funded through the dedicated e-
commerce site that allows for money transfers to be made through the Internet
from
a plurality of sources.
Aside from the financial data that will be collected for payment of
medical services, each transaction for purchase of a good or service will be
associated to the universal accepted medical code known as the Current
Procedural
Terminology or CPT code or another such code consistent with an individual
sponsor's medical terminology system. Transmitting this coded information
directly
into the sponsor's practice management system or other authorized systems as
may
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9
be necessary to fulfill the transaction, will assist the provider to verify
the claim
through electronic submission. The successful completion of financial
transaction
will cause the creation of a separate medical record that will be
automatically
generated and securely stored for retrieval in any authorized sponsor's
electronic
medical record system. This information may then be further made available to
third-party, stand-alone patient health record systems or PHRs or
alternatively, form
the basis of an electronic medical record system (EMR). Standardized forms of
both
financial and medical data will create a record that may be used by multiple
authorized third parties including insurance companies, healthcare systems,
hospital
systems, clinics, or PHR hosts. Standardized generation of data with the
authorization of the subscriber creates a comprehensive and reliable patient
medical
history more appropriate for use by physicians than current data collection
methodologies.
The card can be used also to securely house scripts issued by doctors
(and with the number of refills allowed/remaining), to be filled by
participating
pharmacies. This leverages not only the payment and medical record tracking
aspects of the invention, but adds a fraud-prevention aspect in reducing
forged
prescriptions. In particular, scripts for substances like morphine and medical
marijuana are frequent forgery targets, and having records of scripts would
discourage dishonest doctors from writing scripts without medical
justification.
The arrangement described herein is unique in that:
CA 02653488 2009-01-22
1) There is no other technology that can turn any existing
merchant terminal into a terminal that communicates with our automated
clearing
house in a closed loop. This means that unrelated providers can be affiliated
to our
service through their existing merchant terminal.
5 2) The card is proprietary to the sponsor and does not have to be
issued by a financial institution.
3) There is no system or business method that has proposed
associating the financial transaction data with a medical procedure code (ICD-
9 or
CPT codes), segregating that information thus creating a separate patient
medical
10 information file based on that data.
The arrangement described herein offers to link the PHR, the EMR, the
payer contract, the provider identification, and the list of every vendor in
every
business authorized to act on a patient's behalf, as well as the payment
platform.
This arrangement described herein offers a solution that would greatly
enhance current PHR systems beyond their function as a simple data repository.
By
integrating smart pay card service options directly with health data input,
any PHR
system could expand the use of its program into many other areas of healthcare
and
serve a far greater number of patients with a far greater purpose than their
current
model supports, while maintaining higher levels of security on all
information.
Advantages of an interoperable system monetized by the arrangement
described herein are:
CA 02653488 2009-01-22
11
a) Making use of Open ID credential authentication, the technology
can actively link all patient record keeping systems to invoices for services.
Reporting and recording occurs in real time to the payer, the provider, and
the
consumer's "account."
b) The PHR system becomes a more effective healthcare platform
when the PHR's patient health records are linked to records of payment, and
the
PHR system also becomes monetized.
c) Payments can occur with the simple insertion or swipe of a card
through any provider's authorized merchant terminal or online as required
using
current technology.
d) The records of payment from use of the card for health services
provide standardized structure and organization to a patient database that is
presently created from multiple disconnected entry points, with quite a lot of
random
and subjective patient data.
e) Improved accuracy and information quality improves the safety
of the PHR system and supports the efforts of doctors, pharmacists and other
healthcare providers in their mandates to ensure best-practice decision
outcomes.
f) Standardized financial and medical information through the PHR
operating system provides interoperability between provider-tethered, payer-
tethered
and third-party PHRs through easy data exchange.
g) In addition to patient health records, a PHR or its sponsoring
clients can replace financial institutions as the issuer of health spending
accounts by
CA 02653488 2009-01-22
12
virtue of the processing capabilities of this new technology. The invention
provides a
payment platform independent of closed loop card networks proposed by
financial
institutions.
h) A PHR's broader affiliations will provide an access point from
which to offer uninsured consumers various levels of healthcare coverage
through
aggregation.
j) For any healthcare provider considering integration with a PHR,
the reduction in outstanding accounts receivables would be a definite
enticement.
k) For any insurance payer considering integration with a PHR, the
reduction in administrative expenses would be a definite enticement.
I) State, government and private agencies could fund health
spending accounts through social programs where the value is directed toward
specific services for the cardholder and where that value recovery would not
be
subject to misuse or abuse.
m) Any PHR so linked can develop a Patient Safety .Program so
that all emergency services and events will be satisfied because patient-
critical
information can be tied to PIN identification.
n) An integrated card platform would attract consumers, providers,
and payers. This integrated design allows enhanced economic opportunities
while
supporting socially responsible and affordable healthcare goals in an expanded
model.
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13
The card system can be accepted though either a closed-loop secure
web-based payment portal or physical electronic terminal that has been linked
to the
network. The card system described herein is not only a payment method that
links
to the cardholder's Health spending account (HSA) but also works as an access
card for discounts and ultimately as a tracking method for the card "spend"
and
access to personal health records. Although this description refers to an HSA,
any
type of account, such as an FSA, or HRA may be used for the purpose of linking
to
the card. The closed-loop system limits the monetary spend on the card to
specific
health-based services or health-based retailer, or any providers so linked to
the card
network system.
The card system has the ability to interface with the merchants'
payment system allowing the merchant to continue to accept major credit cards
Visa, MasterCard, and American Express as well Debit on the same physical
electronic terminal. The client's/merchant's terminal will communicate
directly to the
card back-end when the card is presented for payment and will authorize
customers'
credit and debit transactions.
The card system also can be utilized through a cost-effective browser-
based interface on any compatible computer as a secure web-based payment
portal
also, accepting all major credit cards. The web-based browser system employs
secure data encryption technology - 128-bit Secure Socket Layer (SSL),
industry
proven encryption standards and security protocols to safeguard customer
information. The encrypted system allows for transmission of medical CPT or
ICD-9
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14
codes along with the payment linking both transaction and making them
available in
the reporting function. It will be apparent to a person skilled in the
relevant arts that
this invention can be so employed in this application and is not limited to
the field of
healthcare.
With the Online reporting option the card system offers data retrieval
and management information reporting on a 24 hour per day basis. With online
access to real-time transaction data interested and authorized parties can
obtain
critical, current and historical information at the merchant or healthcare
providers'
convenience. A dynamic search engine reviews individual transactions or a set
of
transactions.
In the money flow, 'the card is loaded by either the subscriber or
employer or the cardholder at either the authorized health care provider,
retailer or
through the card system secure website using a major bankcard (Visa,
MasterCard,
American Express or authorized bank transfers (ACH). The funds are held in a
trust
account or a transaction account for distribution to the appropriate
authorized health
care provider or professional as well as to any authorized retailer or service
provider
deemed active by the card system described herein.
The card system is arranged to allow healthcare providers, healthcare
insurers, and other third-party administrators and/or card sponsors to use the
card
system in a manner in which they see fit and in a way that allows them to
manage
their own system. While specific configurations and embodiments of the
invention
are discussed for illustrative purposes, it is understood that these are
presented by
CA 02653488 2009-01-22
way of example and not limitation; one user's needs regarding the function of
card
system may be different than another user's needs. It will be apparent to a
person
skilled in the pertinent art that this card system can be applied in one of
many ways
or employed in a number of different applications.
5 For example, the card may be used as a pay card alone without the
need to carry medical information regarding the transaction event.
Similarly, a third-party administrator (TPA) may wish to link a plurality
of funded accounts to be able to:
a) fund any particular card transaction and arrange those accounts
10 to comply with their client's company policy,
b) allow adjudication procedures where extended settlement times
and holds on payments may be appropriate,
c) configure the system to account for tax rules to benefit the
client,
15 d) allow access to investment accounts which may be included as
a constituent of the transaction,
e) configure payment flows which are different for some accounts
than for others,
f) allow the authorization of healthcare providers for some
accounts that are different than for others,
g) allow various other authorizations and notifications that are
different for some accounts than for others,
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16
h) allow transaction fees that may be added or that are different,
arrange for discounts that may be added or that are different,
j) allow funds from certain accounts which may be uniquely
accessible for use at some providers and not others, or
k) create any other configuration of usage based on the
determination and undertaking of the TPA using the flexible options of the
invention.
Additional features can be added or deleted as needed.
The flexibility of the card system allows for multiple options regarding
merchant providers, payments, claims, authorization and access, adjudication,
reporting, report generation, and communication modes.
The card system is arranged to allow third-parties to be able to issue
smart health cards that they could also use as payment platforms, link the
medical
and payment events together in real time to provide professionally generated
credible medical and financial information for use by interested parties. .
This
occurrence will authenticate users, eliminate complex, lengthy and expensive
administrative procedures, accelerate cash flow for healthcare providers,
eliminate
the need for patients to pay out-of-pocket costs, create discounted payment
schedules based on the elimination of provider costs including the cost of
paying by
credit card, and allow the TPA to manage their own system as they see fit for
better
control of their individual healthcare programs.
This card system can be used to enhance any personal health record
(PHR) platform as the payment system can be linked directly to the medical
CA 02653488 2009-01-22
17
information and applied to the card dynamically and in real time. The card
system is
arranged to allow interoperability with other systems, a stated goal of the US
Administration for PHR. There is no other system that currently allows this
possibility and in that respect the card system is unique and while many
various
embodiments of closed loop health card systems are claimed by others in the
regards stated above, none allow the TPA to openly use, manage, interoperate,
and
cooperate with other stakeholders.
BRIEF DESCRIPTION OF THE DRAWINGS
One embodiment of the invention will now be described in conjunction
with the accompanying drawings in which:
Figure 1 is a schematic layout of the components of the system
according to the present invention.
Figure 2 is a schematic illustration of the card processing protocol.
Figure 3 is a schematic illustration of the medical data processing
protocol.
In the drawings like characters of reference indicate corresponding
parts in the different figures.
DETAILED DESCRIPTION
Attention is directed to the above US Patent No: 7,434,729
(Cracchiolo) assigned to American Express which discloses many details of the
arrangement of the present invention, to which reference may be made for
further
details.
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18
The following terms are used in this document and for convenience are
defined as follows:
The term "merchant" as used herein shall mean any person, entity,
distributor system, software, and/or hardware that is a provider, broker,
and/or any
other entity in the distribution chain of goods or services. For example, a
merchant
may be a credit card issuer, a hotel chain, an airline, a grocery store, a
retail store, a
travel agency, a service provider, including, but not limited to, a medical
service
provider, an online merchant, or the like.
As used herein, an "item" may be one or more of information, good
and/or service capable of being exchanged between entities. In addition, an
"item
identifier" may include, for example, one or more of a universal product code
(UPC),
a stock keeping unit (SKU), a serial number, a reference number, a category
number, a service type indicator, a requestor name, a price, a description
and/or any
other information capable of identifying an item.
A "transaction account" as used herein refers to an account associated
with a closed account card or a closed account card system (as described
below).
The transaction account exists for the purpose of funding the item
transaction.
"Open cards" are financial transaction cards that are generally
accepted at different merchants. Examples of open cards include the American
Express, Visa, MasterCard, and Discover cards, which may be used at many
different retailers and other businesses.
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19
"Closed cards" or proprietary cards are financial transaction cards that
may be restricted for use with a particular merchant, a particular chain of
merchants
or a collection of affiliated merchants. In the case of The CARD described
herein,
this loop can be expanded by creating "hybrid" cards that may be linked to
retailers
that do not compete or have affiliations with each other.
The term "transaction instrument" as used herein may include any type
of open or closed charge card, credit card, debit card, FSA card, stored value
card,
an RFID chip based card or token, and the like. For convenience, a transaction
instrument may be referred to as a "card."
An "account," "account number" or "account code", as used herein,
may include any device, code, number, letter, symbol, digital certificate,
smart chip,
digital signal, analog signal, biometric or other identifier/indicia suitably
configured to
allow a consumer to access, interact with or communicate with a financial
transaction system. The account number may optionally be located on or
associated with any financial transaction instrument (e.g., rewards, charge,
credit,
debit, prepaid, telephone, embossed, smart, magnetic stripe, bar code,
transponder,
radio frequency card or payment statement).
A FSA is an account set up to hold the withheld portions, and to pay for
certain categories of items that qualify for pre-tax treatment under the
Internal
Revenue Service Guidelines. As it currently stands, if an employee wishes to,
for
example, establish both a FSA for qualifying childcare expenses and a FSA for
qualifying medical expenses, the employee must establish two FSAs and
designate
CA 02653488 2009-01-22
how much of the employee payroll to withhold and credit to each FSA. The
employee may then withdraw the funds held in each FSA as the employee
purchases qualifying items associated with each respective FSA.
Currently, to withdraw funds held in a FSA for qualifying expenses, the
5 employee typically must first purchase the qualifying item, then request the
FSA
administrator to reimburse the employee for the purchase. More specifically,
the
employee is usually required to pay for the item at the point of sale,
complete and
file a claim form along with the sales receipt, wait for the FSA administrator
to
process and approve the claim, and wait to receive reimbursement. Thus, the
10 current process for withdrawing FSA funds for qualifying expenses is time
consuming, requires the employee to be "out of pocket" until reimbursement
arrives,
and necessitates that the employee perform various tasks after the purchase.
Furthermore, in situations where the employee incurs a claim for expenses in
different types of FSAs (e.g., a medical expense FSA and a childcare FSA), the
15 employee is generally required to file two claims, one for each respective
FSA,
following the above steps.
In a typical FSA, which is the most established of the CDHPs, an
employer deducts pre-tax dollars from an employee's pay check to cover IRS-
approved healthcare expenses, and the deducted amount is put in the employee's
20 FSA. The employee pays for healthcare goods and/or healthcare services
("goods/services") out of pocket, and submits a receipt for the goods/services
for
substantiation and reimbursement. A third party administrator ("TPA") reviews
the
CA 02653488 2009-01-22
21
receipt and confirms the purchase of the goods/services. Once confirmed, the
TPA
sends a reimbursement check to the employee and the TPA is reimbursed by the
employer. Funds in the FSA that are not used by the employee by the end of the
year are forfeited to the employer. TPAs have begun to offer debit cards to
employees for payment of healthcare goods/services. These debit cards enable
automation of some aspects of claims substantiation.
A Health Spending Account or HSA works in conjunction with an
insurer's health insurance plan, which incorporates employee-paid deductibles.
An
employer and/or an employee contributes pre-tax dollars to the employee's HSA
to
cover IRS-approved healthcare expenses. The contributions are allowed to roll
over
from year to year and to accumulate tax free indefinitely. Funds in the HSA
may be
transferred from an investment account to a cash account to pay for expenses.
When an HSA card or an HSA check is given to a provider for payment of
healthcare
goods/services, the provider submits 'a claim to the insurer. The insurer then
determines the employee's share of the payment, withdraws the determined
amount
from the employee's cash account, and records that amount as part of the
employee's deductible. For the purposes of this invention the HSA refers not
only to
the above arrangement, but may also refer to the account set up for the
purpose of
holding funds associated with the subscriber for the purpose of the healthcare
spend.
As used herein, "point of sale device" or POS may be any software
and/or hardware suitably configured to facilitate a purchase. it may include
any
CA 02653488 2009-01-22
22
means or manner of communicating with one or more host computers for the
purpose of making requests for payment or payment authorization. Such means
may include, but are not limited to, telephonic means, card readers, computer
terminals connected directly to the host computer(s) or indirectly, via e.g.,
the
Internet, or any other means of communication known to persons skilled in the
relevant arts.
Additionally, as used herein, "data" may include encompassing
information such as commands, queries, files, data for storage, and the like
in digital
or any other form.
"Transaction data" may include, for example, one or more of the
amount of purchase, at least one payment instrument account number, at least
one
payment account number, at least one item identifier for each item being
purchased,
loyalty information, demographic information and/or any other data helpful in
processing a transaction.
"Medical Codes" are intended to convey essential information quickly
and with a minimum of misunderstanding to physicians, healthcare providers,
insurance companies and other stakeholders. For example, ICD medical codes are
used worldwide for to convey procedures, statistics, reimbursement information
and
automated decision support in medicine. This system is designed to promote
international comparability and interoperability with other systems so
configured in
the collection, processing, classification, storage and presentation of this
information.
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23
An ISO is an Independent Sales Organization that represents a Bank
or Bank/Processor alliance. The ISO has an agreement to sell the services of
the
Bank or Bank/Processor alliance, and is allowed to mark up the fees and sign
up
merchants. These entities perform a middle function as they typically match
the
banking services they sell with "front end" solutions for accepting
transactions in
order to offer merchants a working system. Their Front End Systems can be
anything from POS Terminals to PC-based Credit Card Processing Software,
paired
with a Secure Payment Gateway. In all cases, the Front End solution must be
compatible with the Processor in order to function.
The Back-End Network is the platform that takes captured transactions
from the Front-End Network and settles them through the Interchange system.
The
back-end generates daily Automated Clearing House or ACH files for merchant
settlement. Other functions typically handed on the back-end include
chargeback
handling, retrieval request and monthly statements. In the case of The CARD
described herein, the ISO is also the back-end processor.
Persons skilled in the relevant arts will understand the breadth of the
terms used herein and that the exemplary descriptions provided are not
intended to
be limiting of the generally understood meanings attributed to the foregoing
terms.
it is noted that references in the specification to "one embodiment", "an
embodiment", "an example embodiment", etc., indicate that the embodiment
described may include a particular feature, structure, or characteristic, but
every
embodiment may not necessarily include the particular feature, structure, or
CA 02653488 2009-01-22
24
characteristic. Moreover, such phrases are not necessarily referring to the
same
embodiment. Further, when a particular feature, structure, or characteristic
is
described in connection with an embodiment, it would be within the knowledge
of
one skilled in the art to effect such feature, structure, or characteristic in
connection
with other embodiments whether or not explicitly described.
One arrangement according to the present invention is shown in Figure
1 which shows a method or system for controlling the purchase of health care
products and services generally indicated at 10. The system includes a
processing
center 11 for managing communications of financial and medical data. A holder
of
funds for payment for the health care products and services is indicated at 12
and
comprises a financial data base for receiving and holding funds.;
The system is used by a plurality of users or patients indicated at 13A,
13B, 13C etc each being supplied with an individual card 14A etc having card
data
thereon.
15 The health insurer 16 defines and communicates with a plurality of
authorized merchants 17A, 17B, 17C etc of health care products and services,
each
of which is authorized to provide acceptable services in the health field.
The system is used by a plurality of individual subscribers each of
which has a plurality of the users or patients associated with the subscriber.
Each
patient of each subscriber is provided with funds 18 supplied by the health
insurer to
the financial data base pay for health care products and services from the
plurality of
authorized merchants to the patients. The funds are requested from the
subscribers
CA 02653488 2009-01-22
to the health care provider in an amount dependent on the plan to be provided
by
the subscriber to the patients associated with that subscriber. Typically the
subscriber is an employer and the patients are employees and the program may
vary for different categories of employee/patient. Thus each of the
subscribers is
5 arranged to place a selected amount of funds for each user/patient
associated with
the subscriber into an account associated with the user/patient held by the
holder
12.
Each of the authorized merchants 17A etc is given a conventional
merchant terminal for payment of funds by credit card. Each of the authorized
10 merchants is given a merchant number .19A, 196, 19C etc arranged to be
communicated to the center 11 for payment of funds by credit card.
A series of codes 20 is established for the system which identifies each
of the health care products and services to be supplied by the plurality of
authorized
merchants 17A etc. The system further includes a patent PHR 21, a healthcare
15 EMR 22 and a medical data base 23.
In operation of the system, the individual patients can select at their
own choosing healthcare providers from the authorized list 17A etc and
contracts
with that supplier to receive a particular medical procedure or product solely
depending on their own perception of their needs. Each purchase transaction is
20 effected on presentation of the card by a patient/user to pay a price for
one of the
health care products and services. The merchant terminal is thus arranged to
communicate data to the processing center containing the price, the card data,
the
CA 02653488 2009-01-22
26
merchant number and the code. The processing center 11 is arranged for each
purchase transaction to obtain data from the holder of funds that is the
financial data
base 12 as to the availability of the necessary funds in the account of the
patient/user and to authorize payment of the price to the merchant in the
event that
the merchant number is authorized and the funds are sufficient to pay the
price.
Data is communicated from the processing center 11 to the Patient
Heath Record (PHR) system for storing for each user the codes of health care
products and services purchased by the user in association with the user.
On each purchase transaction of health care products and services
purchased by the users, the codes are separated, stored and distributed and
transaction information is available at the PHR to those authorized and
interested
parties in addition to, or in association with the user.
In all purchase transactions all codes are approved without analysis
and the price is paid in all cases provided the funds are available to cover
the price.
In all purchase transactions all authorized merchants are approved
without analysis.
The codes are not stored by the processing center 11 to avoid breach
or privacy.
The PHR is accessible by the user separately from the transactions
above to add user information provided by the user in addition to the codes.
The merchants may be required by the authorizing authority such as
the Health Insurer 16 to provide a discount on the price in order to be
authorized.
CA 02653488 2009-01-22
27
The system may be initiated and sold to the subscribers by primary
health care providers. In order to provide an incentive for the provider 17A
etc to
effect sales, each card can be sold to a subscriber for a set price which is
added to
the amount to be applied to the users account with the profit going to the
party
selling the system.
The funds are held securely in trust on behalf of the owner in a
financial institution in compliance with all Payment Card Industry Data
Security
Standards as well as all laws and regulations directed at consumer protection
for the
electronic transfer of funds which provide strict error resolution procedures.
While one PHR is shown, typically there is a plurality of PHRs and
wherein the system selects that one which is associated with the user.
The system is arranged to support a plurality of separate cards where
each card is a proprietary card supplied by one party and is associated with a
plurality of authorized merchants selected by that party.
Thus in the arrangement a card sponsor which can be the Health
Insurer, Clinic, Hospital System, etc, provides for each patient access a
Health
Spending Account (HSA) or some other type of account used for the purpose of
funding the card. In a simple illustration of the modular process shown in
Figure 2,
the cardholder or patient 13A presents the sponsored card 14A to the
Healthcare
Provider 17A as shown at step 25. The Provider swipes the card on the merchant
POS terminal and the card sponsor information verifies the cardholder's
identity,
identifies the account or accounts from which payment shall be deducted,
CA 02653488 2009-01-22
28
determines the amount of coverage to be extended upon the presentation of the
card for the purpose, creates the data for a record of the transaction which
may or
may not include medical information through the addition of medical codes as
shown
at step 27. Upon determination of eligibility, the system authorizes payment
and
deducts money from the HSA and/or other accounts associated with the card
sponsor's pre-determined payment policies. In the final instance a record of
all
transactions medical and financial is created for the stakeholders and
segmented for
those who are authorized to view and use the data.
The schematic of Figure 1 represents an embodiment of the invention
implementing the closed loop network in the healthcare setting. This example
follows the transfer of payment and medical information in the process. As the
card
is swiped or inserted into the POS device at the Healthcare Provider, the
metrics are
transmitted to Processing Center 11 after validations and claim information
has been
delivered to the Health Insurer for authorization. Charges may be based on
retail
costs, discounted retail costs, or based on the card member's plan data as
supplied
by the Health Insurer 16 to the Card Processing Center (CPC) 11. All other
procedures based on the card sponsor's policies and procedures can be
programmed into the system for the CPC to interpret and transmit. For example,
holds may be put on payments until rates can be negotiated with the Health
Insurer
16, thus delaying settlement until adjudication. Once authorization codes have
been
matched, the CPC 11 then sends the transaction information to the financial
CA 02653488 2009-01-22
29
database 12 and the medical codes to the medical database 23 for storage and
distribution to the PHR 21 and the EMR 22.
The medical codes are interpreted electronically and re-cast in
readable terms and standardized format and sent to the patient's PHR where
they
are available to authorized access via the Internet. The same information can
optionally be sent to the Healthcare Provider's Electronic Medical Records
system
(EMR) to supply or augment the medical data in the EMR.
This configuration of the system allows for all information transfer and
payments to occur in real time and for physicians and patients to access a
reliable
record of the medical treatment linked to the indisputable payment event.
Figure 3 represents the medical information module and how that
information is created, transferred distributed and stored. Upon card
presentation at
the point of sale, the Healthcare Provider may choose to attach one of the
medical
codes 20 to the payment. Medical codes may be standard and universal as in the
ICD-9 codes used world-wide, or special as in the "x-codes" used in some
states to
tag medical procedures. Any code can be programmed to work on the POS terminal
through the addition of an application downloaded to the terminal software
that reads
the code. The system is therefore not restricted by the codes it may carry
either by
length or type and additional length or alpha-numeric configuration can be
developed to create a greater amount of information regarding the event. The
Healthcare Provider is prompted to make the code entry prior to the swipe of
the
card for payment. The bundled information is then sent to the CPC 11. The
CA 02653488 2009-01-22
financial information is segregated from the medical information and moved to
the
medical record file. The file can be programmed to immediately download the
information to the patient health record file (PHR) 21 or the Healthcare
Provider's
electronic medical record storage system 22 or both. The double flow line
between
5 the PHR and the Patient card on Figure 1 indicates that the card can be used
to
access the medical information created by, and coded to the payment event.
Similarly, the patient may access their PHR 21 directly to make comment or
edit the
information provided in accordance and compliance with national standards for
electronic health care transactions also know as the Health Insurance
Portability and
10 Accountability Act (HIPAA).
This system allows the stakeholders to create, access and
appropriately use actual, accurate and historical records of patient medical
treatment
entered into the system through the invention's closed loop method. All
information
is created in real time as the processing events occur. The inclusion of
medical
15 information as an adjunct of the payment transaction process assists both
physician
and patient in making accurate best-practice healthcare decisions.
Since various modifications can be made in the invention as herein
above described, and many apparently widely different embodiments of same made
within the spirit and scope of the claims without department from such spirit
and
20 scope, it is intended that all matter contained in the accompanying
specification shall
be interpreted as illustrative only and not in a limiting sense.
