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Insurance Abstract
A method and system for providing initiation of payment of a member's
cost portion of insurance claims to a provider includes an insurance
company adjudicating claims received from a provider, and directing
a financial institution having an association with the member to
pay for the member's cost portion of the insurance claims on the
member's behalf. The system for initiating payment of member's cost
portion of claims to providers includes a processor communicatively
coupled to a database and an optional financial institution database
and processing component communicatively coupled to the processor.
Insurance Claims
1. A method for initiating payment to a provider for a member portion
of one or more claims, comprising: storing member data including
an association between a member and a financial institution; receiving
one or more insurance claims from a provider for one or more services
rendered to the member; adjudicating the one or more claims to calculate
a member's cost portion for the one or more services; and generating
payment instructions based upon the member data, wherein the payment
instructions notify the financial institution associated with the
member to pay the member's cost portion to the provider.
2. The method of claim 1, wherein receiving the one or more insurance
claims comprises receiving one or more medical insurance claims.
3. The method of claim 1, further comprising entering into an agreement
with the financial institution that the financial institution will
pay to the provider the member portion of the claim upon receiving
the generated payment instructions.
4. The method of claim 3, further comprising receiving an indication
from the financial institution that the member's cost portion is
paid to the provider.
5. The method of claim 4, further comprising receiving an indication
from the financial institution that the member repaid the financial
institution.
6. The method of claim 1, further comprising entering into an agreement
with the provider that a transaction fee is to be charged to the
provider for payments of the member's cost portion made to the provider
by the financial institution.
7. The method of claim 6, further comprising the financial institution
paying the member's cost portion to the provider less the transaction
fee.
8. The method of claim 7, further comprising the financial institution
billing the member for the member portion of the claim responsibility.
9. The method of claim 1, further comprising entering into an agreement
with the member that the member will receive a discount for repayment
to the financial institution of the paid member's cost portion.
10. The method of claim 9, further comprising the financial institution
billing the member for the member's cost portion less the discount.
11. The method of claim 1, further comprising receiving an indication
from the financial institution that the member's cost portion is
paid to the provider.
12. The method of claim 11, further comprising receiving an indication
from the financial institution that the member repaid the financial
institution.
13. The method of claim 11, further comprising receiving an indication
from the financial institution that the member has not repaid the
financial institution for a predetermined period of time.
14. The method of claim 13, further comprising generating a message
to implement a payroll deduction process on the member's payroll
for repayment.
15. The method of claim 1, wherein the association between the
member and the financial institution comprises data related to a
line of credit extended to the member by the financial institution.
16. A system for initiating payment to a service provider, comprising:
a database for storing member data including an association between
a member and a financial institution; and a processor coupled to
the database for receiving one or more insurance claims from a provider
for one or more services rendered to the member, adjudicating the
one or more claims to calculate a member's cost portion for the
one or more services, and generating payment instructions based
upon the member data, wherein the payment instructions notify the
financial institution associated with the member to pay the member's
cost portion to the provider.
17. The system of claim 16, further comprising a financial institution
database and processing component configured for receiving the payment
instructions from the processor and for paying the member's cost
portion to the provider
18. The system of claim 16, wherein the database is accessible
by a provider to confirm the member association with the financial
institution.
19. The system of claim 16, further comprising an electronic card
system, wherein the database is accessible by the electronic card
system, the electronic card system associated with integrated insurance
cards configured to hold member data.
20. The system of claim 16, wherein the one or more insurance claims
comprises one or more medical insurance claims.
Insurance Description
CROSS REFERENCE TO RELATED APPLICATION
[0001] The present invention claims priority to U.S. Provisional
Patent Application No. 60/756,291, filed on Jan. 5, 2006, which
is herein incorporated by reference in its entirety.
FIELD OF THE INVENTION
[0002] The present invention relates to initiation of payment of
a member cost portion of insurance claim expenses to a service provider,
wherein a financial institution associated with the member is directed
to pay the member cost portion, as determined by an insurance company,
to the service provider on behalf of the member.
BACKGROUND
[0003] Healthcare bill payment collection processes may be problematic
for health care providers, e.g., physicians and hospitals, ("providers").
Currently, when a member covered under an insurance policy or plan
receives a service, for example, a healthcare service from a healthcare
provider, the provider files one or more insurance claims with the
member's insurance company. The insurance company then calculates
the portion of the cost that the insurance company pays in accordance
with the terms of the member's insurance policy ("the covered
portion") and calculates the portion of the cost that is the
member's responsibility to pay ("the non-covered portion").
The insurance company pays the provider the covered portion of the
service cost. The provider must then bill the member for the non-covered
portion, which the member may or may not pay.
[0004] Consequently, providers bear the risk of member non-payment.
This risk is increasing as higher deductible health plans tied to
health savings accounts (HSAs) grow in popularity and the member's
portion of healthcare costs continues to increase.
SUMMARY
[0005] To address these issues, a system and method is provided
wherein an insurance company notifies a financial institution of
a member's non-covered portion of service costs due to a provider,
which results in the financial institution paying the member's cost
portion to the provider. This may shift the risk of member non-payment
from the service provider to the financial institution. According
to the system and method, an insurance company adjudicates insurance
claims, pays the covered portion of the service costs to the provider,
and notifies a financial institution associated with the member
to pay the member's cost portion for the services that is due to
the provider. The financial institution bills the member for the
payments made to the provider, for example, on a periodic basis.
[0006] In some implementations, a financial institution extends
a line of credit to a member and enters into an agreement with the
financial institution that the financial institution will pay the
member's cost portion of claims to providers on the member's behalf.
The member also may provide information concerning their association
with the financial institution to the insurance company. When the
member receives a service, such as a health-related service from
a healthcare provider, the provider files insurance claims with
the member's insurance company. The insurance company adjudicates
the claims and calculates the covered portion of the service cost
payable by the insurance company and the non-covered portion of
the service cost payable by the member. Then, based upon the member's
association with the financial institution, the insurance company
generates an instruction or payment request, which is transmitted
to the financial institution. The instruction or payment request
instructs the financial institution to pay the member's non-covered
cost portion to the service provider. When the financial institution
pays the member cost portion of claims on the member's behalf, the
financial institution draws on the member's line of credit. The
member is able to repay the financial institution directly through
checks or money transfers or through payroll deduction. For example,
by collecting funds from payroll deduction, the financial institution
may lower the chance of incurring bad debt due to non-payment by
the member.
[0007] According to one implementation, a method for initiating
payment to a service provider includes: storing member data including
an association between a member and a financial institution; receiving
one or more insurance claims from a provider for one or more services
rendered to the member; adjudicating the one or more claims to calculate
a member's cost portion for the one or more services; and generating
payment instructions based upon the member data, wherein the payment
instructions notifies the financial institution associated with
the member to pay the member's cost portion to the provider.
[0008] Additionally, a system for initiating payment to a service
provider includes a database for storing member data including an
association between a member and a financial institution and a processor
coupled to the database for receiving one or more insurance claims
from a provider for one or more services rendered to the member,
adjudicating the one or more claims to calculate a member's cost
portion for the one or more services, and generating payment instructions
based upon the member data, wherein the payment instructions notify
the financial institution associated with the member to pay the
member's cost portion to the provider. The system optionally may
further include a financial institution database and processing
component configured for receiving the payment instructions from
the processor and for paying the member's cost portion to the provider.
[0009] While the detailed description of the invention is provided
in the context of healthcare services and health insurance, the
system and method of the present invention may be implemented to
enable non-covered costs that are the member's responsibility to
pay under any type of insurance plan, such as home, vehicle, property,
liability or other.
[0010] These and other features and advantages of the present invention
will become apparent to those skilled in the art from the following
detailed description, wherein it is shown and described illustrative
embodiments of the invention, including best modes contemplated
for carrying out the invention. As it will be realized, the invention
is capable of modifications in various obvious aspects, all without
departing from the spirit and scope of the present invention. Accordingly,
the drawings and detailed description are to be regarded as illustrative
in nature and not restrictive.
DESCRIPTION OF THE DRAWINGS
[0011] FIG. 1a provides a flowchart of a method for initiating
payment to a provider for a member portion one or more claims.
[0012] FIG. 1b provides a flowchart of a method for a financial
institution to pay a provider for services rendered to a member.
[0013] FIG. 1c provides a flowchart of another method for payment
of providers on a member's behalf.
[0014] FIG. 2 depicts a network that may implement claim payment
methods.
[0015] FIG. 3 depicts a claim payment system that may process claims
and initiate payment on behalf of the enrollee.
DETAILED DESCRIPTION
[0016] A system and method enable payment and/or initiation of
payment of a member cost portion of claims to providers for services
provided to a member. Payment may be initiated by an insurance company
notifying a financial institution of a member's cost portion of
insurance claims, where the member has entered into an agreement
with the financial institution that member cost portions of claims
will be paid by the financial institution on the member's behalf.
The member may repay the financial institution directly through
checks, funds from health savings vehicles such as HSAs, or through
payroll deduction. The system and method may be implemented in a
network for health insurance, such as a proprietary network, and
may be configured to support claims processes such as claims adjudication,
claim settlement coordination with providers for employer portions
of claims, and initiation of claim payment to providers for a member's
cost portion of claims by a financial institution.
[0017] FIG. 1a provides a flowchart of a method for initiating
payment to a provider for a member cost portion of claims. The method
includes an insurance company storing (1) member data including
an association between a member and a financial institution. Insurance
claims are received (2) for one or more services rendered to the
member, and the insurance claims are adjudicated (3) to calculate
a member's cost portion for the one or more services. Then the insurance
company generates (4) payment instructions based upon the member
data, where the payment instructions notify the financial institution
associated with the member to pay the member's cost portion due
to the provider.
[0018] FIG. 1b provides a flowchart of a method for a financial
institution to pay a provider a member responsibility amount for
services rendered to a member. The method includes a payer, such
as an insurance company, receiving (10) one or more claims from
a provider for services rendered to a member. The payer determines
and transmits (20) the member responsibility amount to a financial
institution designated by the member, and the financial institution
reimburses (30) the provider for the member responsibility, e.g.,
member's cost portion of the claim. Periodically, the financial
institution bills (40) the member for the member responsibility
paid on their behalf, and the member may repay the financial institution
by check, from healthcare accounts, such as a flexible spending
account, and HSA, or HRA, or through payroll deduction, for example.
[0019] FIG. 1c provides a flowchart of another method for a financial
institution paying providers a member's cost portion on a member's
behalf. According to FIG. 1c, a member receives (110) a line of
credit from a financial institution affiliated with a network for
the purpose of paying for medical bills or other medical expenses.
In some implementations the line of credit is equal to the member's
maximum out-of-pocket expense for covered services under the member's
insurance policy. In addition, the member may notify their insurance
company of the line of credit received. The member receives (120)
services at a provider that is a member of the network, and the
provider submits (130) one or more claims to the health insurance
company in the network. The health insurance company is responsible
for adjudicating (140) the claim based on a member's existing contract
and an employer's plan design, calculating and paying the employer
portion of the claim, and calculating the employers portion of the
claim owed to the provider. Subsequently, the insurance company
notifies (150) the financial institution of the member's responsibility,
and the financial institution pays (160) the provider for the member's
portion of the claim on behalf of the member. As a result, the financial
institution direct settles with the provider without member involvement.
Upon payment to the provider, the financial institution draws (170)
on the member's line of credit, bills (180) the member for their
portion of the claim, and may be repaid by the member via, for example,
check, from healthcare accounts, or through payroll deduction.
[0020] Thus, according to exemplary implementations, the network
provides for the coordination of claim settlement because an notifies
a financial institution that one or more member claims need to be
settled, and the financial institution both initiates a credit transaction
with the member and pays the provider on behalf of the member. This
is in contrast to the provider communicating to the member to pay
the member's portion of the claim. Provider payment of the member
portion of claims by the financial institution may facilitate providing
a reliable healthcare services payment system. In addition, providers
may work with the insurance company to determine a member's portion
of the plan rather than dealing directly with the member.
[0021] The above-mentioned methods may be implemented in a system
organized under a network, such as the network 201 depicted in FIG.
2. In FIG. 2, network 201 includes an insurance company 210, a financial
institution 220, a group of providers 230, and member/enrollees
240. As can be seen by the arrows between the entities in the network
201, providers 230 are paid by the insurance company 210, e.g.,
for the employer portion of claims, and by the financial institution
220, e.g., for the member/enrollee 240 cost portion of the claims.
Member/enrollees 240 are then responsible for paying the financial
institution 220. This is in contrast to a member/non-enrollee 250
that is responsible for paying providers 230 directly.
[0022] In certain configurations, members 240 and providers 230
join the network 201 by enrolling or by entering into a contract
with insurance company 210 and/or financial institution 220. Member
enrollment may include meeting requisite eligibility requirements
set by an employer and/or financial institution. For example, the
member may be required to have a minimum credit score before being
extended a line of credit by the financial institution, or may be
required to allow payroll deduction as an option for repaying the
financial institution. The member may be required give authorization
to the financial institution to pay member cost portions of claims
on the member's behalf, and/or that the member will repay the financial
institution for services rendered. In addition, as part of the enrollment
process, the member may be required to notify his/her insurance
company of the line of credit extended by the financial institution.
Providers 230 may join the network by entering into a network contract
that may require the provider to agree to not collect co-pays, deductibles,
or co-insurance directly from the member/enrollee 240 at the time
of service, to not send bills directly to member/enrollees 240 after
the time of service, and/or to agree to send bills directly to the
insurance company. In addition, providers may be required to agree
with the financial institution that the financial institution will
pay to the provider a member's cost portions of claims on behalf
of the member. It will be understood by those of skill in the art
that a network may have various configurations and include various
entities and implement various agreements. For example, numerous
provider groups may be included in the network. In another example,
the network may include other entities (e.g. a holding company)
that serve to cooperate with one or more of the providers, financial
institution and/or the insurance company in order to comply with
various laws, regulations, or policies.
[0023] Bills and/or claims sent to the insurance company by providers
may be processed by a claim payment system, such as the system depicted
in FIG. 3. The system of FIG. 3 includes a processor 310 and a database
320 for storing member information. In addition, the claim payment
system may optionally include a financial institution database and
processing component 330. Claims sent electronically or via mail
to the insurance company may be submitted to the processor 310 where
the claim is adjudicated in order to determine the employer and
member responsibilities. Processor 310 also queries database 320
to determine whether the member is an enrollee in the network. If
the member is an enrollee, then processor 310 may generate payment
instructions notifying a financial institution to pay the member's
cost portion to the provider. For example, the generated instructions
may be routed to financial institution database and processing component
330 so that the financial institution pays the member's cost portion
to the provider. Accordingly, the provider is paid the member's
cost portion by the financial institution, and the financial institution
bills the enrollee for the paid amount. If the member is not an
enrollee, the provider may submit a bill directly to the member
for payment, and accordingly, the automated claims processor 310
is not prompted to send a message to the financial institution regarding
the member non-enrollee responsibility. In certain configurations,
the insurance company in the network maintains the automated claims
processor 310 and enrollee database 320, while the financial institution
maintains the optional database and processing component 330. It
will be understood, however, that the claim payment system may have
various configurations and be incorporated into other software and
database systems. For example, claims that do not automatically
adjudicate at the automated claims processor 310 may be automatically
routed to a manual work queue (not shown) for manual adjudication,
and a claims specialist may manually route the appropriate claim
data related to a member's cost portion to a financial institution
database and processing component 330.
[0024] In view of the above-described claim payment system, claims
may be adjudicated in real-time upon receipt from the provider,
automatically submitted to the financial institution, and paid to
the provider. This may reduce the amount of time a provider waits
between billing the member and receiving payment for services rendered
and simplify the provider's billing process.
[0025] Furthermore, the claim payment system may be configured
so that multiple claims for services rendered to the member may
be adjudicated, the member cost portion paid to the financial institution,
and the member billed for a consolidated amount in one statement
issued periodically from the financial institution. This may be
useful for keeping track of out-of-pocket expenses because a billing
statement generated by an entity in the network and provided to
the member may include a listing of the member cost portions that
correspond to each claim, in addition to a total amount owed by
the member to the financial institution.
[0026] According to certain implementations, claim adjudication
by the insurance company may be based on a single contract applicable
to enrollees and non-enrollees. This provides for an adjudication
system that may be based on a single fee schedule for claim adjudication
so that claims may be adjudicated in the same way for a group of
employees, some enrolled in the network and some that are not. In
addition, the insurance company may pay the employer portions of
member claims regardless of the member's status as an enrollee or
non-enrollee in the network. Accordingly, the front end of a network's
claim adjudication system that involves claim adjudication and provider
payment on behalf of employers may remain relatively unchanged.
However, it will be understood by those of skill in the art, that
a claims adjudication system may be modified according to plan requirements.
For example, the claims adjudication system may send the financial
institution a report of all claims processed for members in the
payment plan daily or weekly.
[0027] In a further implementation, providers may agree to pay
a transaction fee in return for payment of the member's portion
of the claim from the financial institution. The transaction fee
may be a set amount per transaction, e.g., $5 per transaction, a
percentage of the member's portion, e.g. 1-15 percent, or a mixture
of transaction fees and set amounts, for example, where the provider
is charged a fixed fee for claims under a predetermined amount and
a percentage of the fee is charged to the provider for claims over
the predetermined amount. It will be understood by those of skill
in the art, that transaction fees may be formatted in any suitable
fashion, including those described above, and with various other
modifications. For example, a transaction fee of $5 may be charged
to the provider when a member's portion of the claim totals up to
$25, and when the member's portion of the claim exceeds $25, the
transaction fee may be increased to $10. Further, a transaction
fee structure may involve a percentage scale where the transaction
fee percentage increases as the member responsibility increases.
[0028] In a particular example, a claim may be adjudicated for
a member enrolled in the payment plan where the allowed amount is
$2,500, which may be the same whether the member was enrolled in
the payment plan or not. In this example the member's responsibility
is $500 out of the $2,500. The financial institution pays to the
provider $500 less a 12% transaction fee ($60) for a net payment
of $440. Subsequently the provider may adjust their records to reflect
that the remaining balance owed to the provider is $0.
[0029] Payment of the enrollee responsibility portion of the claim
by the financial institution may be sent along with an explanation
of benefits or invoice that details the pertinent information on
the claim including the patient's name, date of service, billed
charges, allowed amount, patient's responsibility, the financial
institution's transaction fee, and the net amount paid to the provider.
Alternatively, payment and an explanation of benefits or invoice
may be sent to the provider separately for privacy purposes. For
example, both the payment and the explanation of benefits may be
assigned a common invoice number or numbers so that the provider
is able to match payment with the explanation of benefits.
[0030] In another implementation, a member enrolled in the payment
plan may receive a discount on their cost portion of the claim responsibility.
For example, the discount may be a percentage of the member's claim
responsibility or may be a fixed amount. In a particular example,
a member may receive a billing statement from the financial institution
covering all visits made to providers in the network. The billing
statement may show the member's responsibility before the discount,
e.g., a $500 of out-of-pocket expenses for the statement period,
and the member's responsibility after the discount, e.g., $475 after
a 5% discount or a discount of $25. Discounting the member's out-of-pocket
expenses may provide an incentive for enrolling in the network's
payment plan, and the incentive may be reinforced by providing a
member's savings on their billing statements. Furthermore, a member's
explanation of benefits may also include information on member savings.
[0031] In some implementations, an enrollee may be required to
allow payroll deduction as an option for repayment of the member
portion of claims. Then, for example, after an enrollee has not
paid the financial institution for a pre-determined period of time,
e.g., a grace period of 30 days, the enrollee's payroll may be deducted
a pro-rated amount until the financial institution collects the
full amount due. However, where the enrollee's payroll is deducted,
the enrollee may choose to pay their bill in full, e.g., by personal
check, or by transferring funds from an HSA or HRA, in which case
the enrollee's payroll would no longer be deducted from.
[0032] Furthermore, the payment system may be configured similar
to a credit card so that once a member's payment for services has
been due for a predetermined of time, interest is charged on the
amount due. In some configurations, the interest rate may range
from 1-25 percent.
[0033] According to various implementations, an enrollee periodically
receives statements from the financial institution, e.g., monthly,
that provides the enrollee with confirmation, where applicable,
that they are receiving a discount, that payroll deduction is in
force, and/or that the amount due is incurring interest. For methods
that implement payroll deduction, the enrollee may not be considered
delinquent after a period of non-payment because after a grace period
payroll deduction is initiated. Therefore, the periodic statements
may show that payroll deduction is in force, but delinquency related
processing may, in some instances, be suppressed so that statement
messages, delinquent amounts added to minimum payments due, outbound
calls and letters are not communicated to the enrollee.
[0034] According to certain configurations, the healthcare network
may implement a cardless system, where the insurance company stores
member enrollment data electronically. For example, at the point
of service, a provider may verify eligibility of a member using
the insurance company's website, confirm with the member that they
are enrolled in the network, and submit claims directly to the insurance
company for services rendered. Accordingly, and consistent with
the implementations described above, the provider does not collect
payment from the member at the point of service or bill the member
directly for services rendered, and instead continues to submit
claims to the insurance company in the same manner other claims
are submitted.
[0035] In further configurations, the network's payment plan may
be combined with an integrated access device provided by the network.
The access device may include a card, code or other means of access
to financial and/or health account information. The access device
may serve as an insurance card and hold a member's identification
information, contain a medical history or provide access to a medical
history, provide access to a line of credit, a health savings account,
a flexible spending account, and may provide purse management functionalities
in which the member may designate where or how funds should be allocated
when paying providers or for other healthcare products or services.
In this configuration, the integrated access device may serve as
both an insurance card and a payment vehicle for the enrollee's
out-of-pocket liability.
[0036] According to certain configurations, claims adjudication
systems, such as those described in U.S. Pat. No. 5,359,509, having
an issue date of Oct. 25, 1994, and entitled "Health Care Payment
Adjudication and Review System", which is incorporated herein
by reference in its entirety, may be implemented along with the
disclosed inventive methods and systems.
[0037] In addition, claims processing systems, such as those described
in U.S. patent application Ser. No. 11/562,131, having an application
date of Nov. 21, 2006, and entitled "Method and System for
Enabling Automatic Insurance Claim Processing", which is incorporated
herein by reference in its entirety, may be implemented along with
the disclosed inventive methods and systems.
[0038] It should be understood that the method and system according
to the present invention may be implemented using various combinations
of software and hardware as would be apparent to those of skill
in the art and as desired by the user. The present invention may
be implemented in conjunction with a general purpose or dedicated
computer system having a processor and memory components.
[0039] From the above description and drawings, it will be understood
by those of ordinary skill in the art that the particular embodiments
shown and described are for purposes of illustration only and are
not intended to limit the scope of the present invention. Those
of ordinary skill in the art will recognize that the present invention
may be embodied in other specific forms without departing from its
spirit or essential characteristics. References to details of particular
embodiments are not intended to limit the scope of the invention.
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