Patent Publication Number: US-2006020495-A1

Title: Healthcare Claims Processing Mechanism for a Transaction System

Description:
BRIEF DESCRIPTION OF DRAWINGS 
    
    
      In the accompanying drawings:  
       FIGS. 1 and 2  show overviews of a transaction system or aspects thereof according to embodiments of the present invention; and  
       FIG. 3  is a flowchart depicting the operation of aspects of a transaction system according to embodiments of the present invention. 
    
    
     DETAILED DESCRIPTION  
      The term “message” generally refers to a signal representing a digital message. As used herein, the term “mechanism” is used herein to represent hardware, software or any combination thereof. The mechanisms and databases described herein can be implemented on standard, general-purpose computers or they can be implemented as specialized devices. The mechanisms may operate electronically, optically or in any other fashion. The term “person” means any individual, group of individuals, business entity or entities (including without limitation not-for-profit entities). The term “database” means one or more servers for storage of information.  
      An overview of the structured transaction system  200  according to the present invention is described with reference to  FIGS. 1 and 2 . A participating employer has a healthcare plan for its eligible employees including an employer and/or individual employee account(s) (each a funded account  271 , held by a financial institution  225 ), whereby the participating employer and/or its participating employees fund from time to time the funded account(s)  271 . Examples of these accounts are healthcare reimbursement arrangements, healthcare savings accounts, and flexible spending accounts. The participating employees may use monies in the funded account(s)  271  for payment of healthcare expenses and services provided to the participating employee.  
      In many healthcare plans, dependants of an employee are entitled to participate in a healthcare plan sponsored by the employee&#39;s employer, and therefore a participating employee may (when permitted by the healthcare plan) fund an individual dependant account and/or use monies in the funded account(s)  271  for payment of healthcare expenses relating to his/her participating dependant, all in accordance with and subject to the limitations of the healthcare plan. Hereinafter, and in the drawings, participating employees and their participating dependants may be referred to as “participants”; however, it is recognized that in many uses of the term “participants,” the participating employee will be acting on behalf of one of its participating dependants.  
      The funded accounts  271  are managed in part by an administrator by means of the claim processing mechanism  231  of the present invention. The claim processing mechanism  231  from time to time receives from a participating healthcare provider  221  or a participant, by means of the claim submission mechanism  232 , a claim  261  specifying healthcare services and expenses provided to a participant, and requesting payment or reimbursement for the same; the claim processing mechanism  231  processes the claim  261  and, if valid, instructs the financial institution  225  holding the funded account  271 , by means of the payment mechanism  233 , to pay the claim amount specified in the claim  261 , as the same may be adjusted by the claim processing mechanism  231 .  
      Some or all of the participating employer, participating employee, healthcare provider  221 , insurance provider or healthcare plan administrator  227  and/or financial institution  225  (some of the “users”  228  of the system) may register with the administrator by means of the registration mechanism, whereby the user  228  transmits to the database  240  registration information  262  regarding the user  228  and in some cases registration information  262  regarding some of the other users  228 , which registration information  262  will assist in claims processing, payment and account management of the various mechanisms of embodiments of the present invention. The registration information  262  may be reviewed and/or modified from time to time by the applicable user(s)  228  or the administrator. It should be understood that under some circumstances two or more of the users  228  may be the same person.  
      The administrator may contract with any of the users  228  of the system of the present invention or any portion or embodiment thereof regarding any, some or all of the following: authorization to pay claims  261 , fees to be paid to the administrator, rates for services provided by a healthcare provider  221  to participants, parameters for submission of claims  261 , allocations of risk, and terms of use of the system of the present invention or any portion or embodiment thereof.  
      Each participating employer, healthcare provider  221  and/or insurance provider or healthcare plan administrator  227  may assist the administrator in developing one or more template(s) and/or rule set(s)  250  against which some or all claims  261  relating to the participating employer (where its participants receive the services reflected in a claim), the healthcare provider  221  (where it provides the services reflected in a claim), and/or the insurance provider or healthcare plan administrator  227  (where the services reflected in a claim relate to services insured or administered by the insurance provider  227 ) shall be compared. The template(s) and/or rule set(s)  250  may vary among participating employers, healthcare providers  221  and/or insurance providers  227 , or may be a single or group of template(s) and/or rule set(s)  250  against which some or all claims are compared. The template(s) and/or rule set(s)  250  may be structured by the terms and conditions of the healthcare plan, and may include treatment codes and payment rates.  
      At the time healthcare services are rendered to a participant, the participant may present system identification information  263  to the healthcare provider(s)  221 , sufficient to identify the participant in the system of the present invention. The healthcare provider  221  transmits this information, along with claim information  261  relating to the services provided to the participant, to the claim processing mechanism  231  of the present invention by means of the claim submission mechanism  232 ; alternatively, a participating employee may submit the claim directly to the claim processing mechanism  231  by means of the claim submission mechanism  232 .  
      The claim processing mechanism  231  may then perform some or all of the following steps: confirm that the participant is enrolled (eligibility confirmation  235 ); attach or incorporate certain information as regards the participant, the applicable employer, the healthcare provider  221 , the funded account  271  and the provider&#39;s account  272  (which information was gathered through the registration process by any or each of them and is stored in the database  240 ) to the claim information submitted (information association  236 ); compare the claim information  261  to the applicable template(s) and rule set(s)  250  (template validation  237 ); and confirm that the applicable funded account  271  has sufficient funds available to the participant to satisfy the claim  261  in whole or in part (funds confirmation  238 ). Upon completion of any or all of said steps, the claim processing mechanism  231  may transmit a message  306  to the financial institution  225  holding the funded account  271  to transfer the claim amount (or lesser amount) from the funded account  271  to the applicable user account  272 . The financial institution  225 , after receipt of claim payment authorization  306 , issues fund transfer instructions  307  causing funds to be transferred from the funded account  271  to the applicable user account  272 ; upon successful transfer of the funds, the financial institution  225  may generate a transfer confirmation message  308  to the claims processing mechanism  231 . The claim processing mechanism  231  may further transmit the claim information  261 , applicable registration information  262  and payment authorization  306 , reformatted and filtered as desirable, to the insurance provider  227  by means of the insurance submission mechanism  236 .  
      1. Claim processing Referring to  FIGS. 1, 2  and  3 , when a healthcare provider  221  provides healthcare services to a participant (at S 201 ), the participant provides system identification information  263  to the healthcare provider  221 , who then inputs and transmits (at S 202 ) the claim information  261  for said services and the participant&#39;s system identification information  263  to the claim processing mechanism  231 , by means of the claim submission mechanism  232 . Multiple claims  261  for one or more participants may be entered by the healthcare provider  221  sequentially in a batch. Upon receipt of the message comprising the claim information  261 , the claim processing mechanism  231  then performs some or all of the following steps, in any logical order:  
      (a) Associating Registration Information  
      Some registration information  262  regarding the healthcare provider  221 , the participant, the applicable participating employer, the funded account  271 , the participant&#39;s balance in such funded account  271 , and the healthcare provider&#39;s account  272 , all as may be stored in the database  240 , is transferred to the claim processing mechanism  231  by means of the registration mechanism  234  and is attached to, incorporated in or otherwise associated with the claim information  261  (at S 203 , information association  236 ).  
      (b) Validation of Claims to Template/Rule Sets  
      The claim information  261  is compared to the applicable template(s) and/or rule set(s)  250  (at S 204 , template validation  237 ). If the claim information does not comply with the applicable template(s) and/or rule set(s)  250 , a message  281  to that effect may be generated and transmitted (at S 205 ) to some or all of the users  228 . The healthcare provider  221  may then correct and retransmit the claim information  261  (at S 202 ), or the corrections thereto, to the claim processing mechanism  231 , by means of the claim submission mechanism  234 , for comparison to the applicable template(s) and/or rule set(s)  250 . The corrections to the claim information  261  may be attached to, incorporated in, or otherwise associated with the claim information  261 , or the corrections may modify the claim information  261  as originally submitted by the healthcare provider  221 .  
      The claim processing mechanism  231  may also calculate applicable rates for services and expenses claimed, in accordance with the applicable template(s) and/or rule set(s)  250 , which may then be appended to, incorporated in or otherwise associated with the claim information  261 .  
      (c) Participant Eligibility Confirmation  
      The claim information  261  and some or all of the registration information  262  is compared to the database  240  (at S 206 , eligibility confirmation  235 ) to confirm the participant&#39;s eligibility. If the database  240  reflects that the participant is no longer an eligible participant, a message  281  to that effect may be generated and transmitted to some or all of the users  228  (at S 207 ).  
      (d) Funds Query  
      The claims processing mechanism  231  compares the claim amount to the applicable funded account  271  balance (at S 209  and s 211 , funds confirmation  237 ) and the participant&#39;s balance therein, as may be reflected in the database  240  and/or the financial institution&#39;s account records. If there are insufficient funds to which the participant is entitled in the funded account  271 , a message  281  to that effect may be generated and transmitted to some or all of the users  228  (at S 210 ). In the event there are funds in the funded account  271  to which the participant is entitled, but they are insufficient to satisfy the entire claim amount, a message  281  to that effect may be generated and transmitted to some or all of the users  228  (at S 210 ), and the healthcare provider  221  may be paid via the payment mechanism  233  for a portion of the claim amount from the funded account  271 .  
      A hold message  282  may be generated and transmitted (at S 208 ) by the claim processing mechanism  231  (at S 207 ) to the payment mechanism  233 /financial institution  225  (at S 207 ), authorizing and instructing the financial institution to hold sufficient funds in the funded account  271  to satisfy the amount of the claim  261  or, if the participant&#39;s balance of the funded account  271  is insufficient to satisfy the claim, to hold the remainder of the participant&#39;s balance of the funded account  271  or some lesser amount. The financial institution  225  may transmit a confirmation message  283  which, in the case of insufficient funds to pay the claim in full, may include the amount available in the funded account or some lesser amount, to the claim processing mechanism  231 , confirming that a hold has been placed as requested; the claim processing mechanism  231  may then transmit to some or all of the users  228  a message  281  to the same effect (which may be the same as the confirmation message  283 ).  
      (e) Approval or Denial of Claim  
      If the participant is enrolled, and if the participant&#39;s balance of the funded account  271  is sufficient to satisfy the claim in whole or in part, a message  281  may be transmitted to some or all of the users  228  indicating approval of the claim.  
      In the event a claim is denied by the claim processing mechanism  231  for any of the reasons set forth above or any other reason, a message  281  to that effect may be generated and transmitted to any, some or all of the users  228  indicating denial of the claim, and if desirable the reasons therefore.  
      (f) Payment Instructions  
      The claim information  261  and registration information  262 , filtered as may be desirable or as is required by law, is transmitted (at S 212 ) by means of the payment mechanism  233  to the financial institution  225 , with instructions or authorization to transfer funds in the amount of the claim(s) (or portion thereof, as applicable) from the funded account  271  to the provider account  272 .  
      The financial institution  225  may transmit a payment confirmation message  308  to the claim processing mechanism  231 , confirming the transaction details and/or the funds transfer, which may be verified by the claim processing mechanism  231 , and a message  281  to that effect may be transmitted to some or all of the users  228 .  
      (g) Alternative Payment; Reversal of Charges  
      In some embodiments of the invention, the claim processing mechanism  231  will permit receipt and recordation of alternative payment information input by the healthcare provider  221  and transmitted to the claim processing mechanism  231  by means of the claim submission mechanism  232 , reflecting the participant&#39;s payment of amounts due to the healthcare provider  221  independent of the payment(s) made by the financial institution  225  from the funded account  271 . As an additional feature, the claim processing mechanism  231  may process non-cash (e.g. credit card) payments for the benefit of the healthcare provider  221 , information regarding the same being transmitted to the claim processing mechanism  231  by the claim submission mechanism  232 .  
      In an embodiment of the present invention, reversal of charges may be made by the claim processing mechanism  231  by means of the claim submission mechanism  232  or the registration mechanism  233  upon the request of one or more of the users  228 .  
      (h) Funding of Accounts.  
      In some embodiments of the claims processing mechanism of the present invention, a participating employer or participating employee may fund the funded accounts from other banking accounts of the user  228 , by providing (during registration or otherwise) to the claims processing mechanism, by means of the registration mechanism, ancillary account information and funds transfer requests. The claim processing mechanism then generates and transmits an ancillary funds request on behalf of the user  228  to the applicable ancillary financial institution, requesting the funds transfer. It is contemplated that the ancillary financial institution will then transmit a funds transfer instruction to electronically transmit funds from the ancillary account to the funded account. Confirmation of such transfer may be returned by the financial institution or the ancillary financial institution to the claims processing mechanism, which may then record the information in the database and may generate and transmit a message to that effect to the funder and/or any other user  228  confirming the same.  
      (i) Claim Submission to Insurance.  
      In some embodiments of the present invention, the claim processing mechanism  231  may generate and transmit, by means of the insurance submission mechanism  236 , a message regarding the claim information  261  and applicable registration information  262 , filtered and/or formatted as appropriate or desirable, to the insurance provider or healthcare plan administrator  227  or any person acting on either of their behalf, for further processing by the insurance provider  227  relating to, among other purposes, validating the claim for purposes of coverage under the healthcare plan, crediting the participant with expenses incurred towards his/her deductible, confirming accuracy and compliance of the claim with the insurance benefits, and providing payment to the participant or the healthcare provider  221 , as applicable.  
      In a further embodiment of the present invention, the insurance provider or healthcare plan administrator  227  may transmit messages by the insurance claim mechanism  236  to the claims processing mechanism  231  for further processing for purposes such as authorizing payment of a claim from the insurance provider&#39;s account  273  to the provider&#39;s account  272  (or the employee&#39;s account, if any and applicable), and notice of payment or rejection of a claim to any of the users  228 . In this embodiment, the system of the present invention may permit the resubmission of a rejected claim to the insurance provider  227  by means of the claim submission mechanism  232 , the claim processing mechanism  231  and the insurance submission mechanism  236 .  
      (j) Recordation of Data  
      The claim processing mechanism  231  records in the database  240  some or all of the information contained in the registration information  262 , the claim information  261 , the messages  281  transmitted to and/or received from the users  228  or the administrator by the registration mechanism  233 , the claim submission mechanism  232 , the claim processing mechanism  231 , the payment mechanism  234 , and/or the insurance submission mechanism  236 , and other information which may be generated by any mechanisms of the embodiments of the present invention from time to time (e.g. invalid login).  
      2. Registration, Account Review and Management  
      An embodiment of the claim processing mechanism  231  of the present invention includes registration of the users  228 , including any of a participating employer, a participating employee, a healthcare provider  221 , a financial institution  225  and an insurance provider or healthcare administrator  227 , and any persons acting on behalf of any of these persons, including for example but without limitation representatives, employees and agents, and any other users  228  of the system of the present invention or embodiments thereof.  
      Users  228  may register by providing registration information  262  (including personal or corporate identifying information and information regarding dependents and beneficiaries, healthcare plan terms and conditions, account numbers, etc.) to the claims processing mechanism  231 , which then records the information to the database  240 .  
      An embodiment of the registration mechanism  233  includes the performance of a query of third party credentialing databases to confirm licensure and good standing of participating healthcare providers  221  at registration, and/or from time to time thereafter.  
      By means of the claim processing mechanism  231 , users  228  may from time to time add, delete and/or modify certain information in the database  240  relating to the user  228 , the user&#39;s  228  account(s) (if any), or in the case of employers, enrollment or change of status of participating employees.  
      An embodiment of the registration mechanism  233  allows the users  228  to view information in their respective database  240  and/or generate standard or customized reports or forms from the information in the database  240 , which can be transmitted to users  228  in a variety of formats, including without limitation claim information capable of being imported into a healthcare provider&#39;s practice management system, participating employer&#39;s healthcare payment system, and other financial software.  
      3. Information Management  
      The claim processing mechanism  231  may generate unique identification codes for the claim  261  and some or all of the messages  281  and/or records generated, transmitted or received thereby, which may tie all such messages and/or records to a single claim  261  and/or batch of claims. The unique identification codes, when generated, may be transmitted or posted with the messages  281 /records.  
      4. Security  
      The database  240  and the mechanisms of the present invention may require various levels of security, including use of user  228  identification numbers or login names, login passwords, (which may be in the form of magnetically coded access cards containing authorization or other technology); information filters, varying among some or all of the users  228 , thereby providing each user  228  access to limited information from the database  240 ; and VPN, firewalls, concentrator, PKI, SSL, and other transaction level security solutions in order to protect the privacy of the transactions and data in the database. It is contemplated that security of systems comprising the present invention will evolve over time, with improvements in the computer security industry and changes in privacy laws.  
      Thus, a claims processing mechanism and related mechanisms for a healthcare claims submission and payment system is provided. One skilled in the art will appreciate that the present invention can be practiced by other than the described embodiments, which are presented for purposes of illustration and not limitation, and the present invention is limited only by the claims that follow.