Patent Application Titled “Healthcare Debit Card Linked To Healthcare-Related And Non-Healthcare-Related Financial Accounts” Published Online (USPTO 20210398076): Alegeus Technologies LLC

2022 JAN 07 (NewsRx) -- By a News Reporter-Staff News Editor at Hospital & Nursing Home Daily -- According to news reporting originating from Washington, D.C., by NewsRx journalists, a patent application by the inventors Dibiasi, John P. (Sedona, AZ, US); Lindsey, Jimmie L. (Milwaukee, WI, US); Norman, Douglas L. (Brookfield, WI, US), filed on May 28, 2021, was made available online on December 23, 2021.

The assignee for this patent application is Alegeus Technologies LLC (Waltham, Massachusetts, United States).

Reporters obtained the following quote from the background information supplied by the inventors: “

“Field of the Invention

“The present invention relates generally to healthcare financial payment systems and methods, and more particularly to a novel system and method in which a healthcare debit card used by a cardholder to pay for medical products and services is linked with a healthcare-related financial account associated with the cardholder as well as with a non-healthcare-related financial account belonging to the cardholder.

“With the widespread use of medical insurance has come the necessity of establishing that a particular individual has medical insurance coverage and arranging for the payment of medical products and services which are provided to the individual. At physicians’ offices, hospitals, and pharmacies, the established policy has become that unless proof of coverage is provided at the time of provision of medical services or purchase of medical products, the consumer must pay, or make arrangements to pay, for the cost of the medical products or services at the time of their delivery. At physicians’ offices at the time of service, consumers having medical insurance are typically required to present a card evidencing proof of the consumer’s medical insurance plan and information regarding the plan including the copay amount required for an office visit, and pay the copay amount.

“At hospitals, consumers having medical insurance typically present the card evidencing proof of the consumer’s medical insurance plan and information regarding the plan prior to delivery of medical services (other than in the case of an emergency). At pharmacies, consumers having medical insurance are required to present the card evidencing proof of the consumer’s medical insurance plan and information regarding the plan including the copay amount required for the prescription(s) being obtained, and pay the copay amount. In each of these situations, the consumer is required to either pay a copay amount prior to the delivery of medical services or a prescription, or, in the case of a hospital, to agree to pay the hospital for the amount which is not covered by the consumer’s medical insurance.

“This system of payment for medical services and products operated as described above until federal laws were passed to allow a participant and eligible dependents to save a considerable amount of money in taxes through a Flexible Spending Arrangement (“FSA”). FSA programs allow participants to deduct a predetermined amount of money from the participant’s before-tax income. This predetermined amount of money is set aside in the participant’s healthcare-related financial account, which is sometimes referred to as a flexible spending account or a flex account. The money then can be used toward paying for expenses incurred for certain eligible products and services specified by the IRS. Because the money is deducted from the employee’s before-tax income through payroll deductions, the amount of tax that is actually paid by the employee is reduced. Further, the employer’s FICA payment is reduced based on the applicable amount of pre-tax contributions made by their employees. As FSA plan is not portable.

“A Health Savings Account (“HSA”) is a tax-advantaged trust or custodial healthcare-related financial account created for the benefit of an individual (not limited to employees) who is covered under a high deductible health plan (“HDHP”). The HSA provider need not require proof of HDHP coverage but may desire to do so for purposes of its recordkeeping and reporting. If an employer sets up an HSA for an employee, however, the employer must verify that the employee is enrolled in an HDHP offered by the employer. Contributions may be made by an employer, the individual, or a family member (subject to the gift tax). Contributions are deductible if made by an individual and are excludable from income and wages if they are made by an employer. Earnings grow tax-free and distributions for qualified medical expenses are tax-free. Nonqualified withdrawals are subject to income and penalty taxes, and excess contributions are subject to a six percent excise tax. Like an IRA, the HSA is owned by the individual and is portable.

“A health reimbursement arrangement (“HRA”) is an arrangement funded solely by an employer. An HRA may be offered to employees or former employees. Amounts in the HRA healthcare-related financial account must be used for qualified medical expenses, and balances may be carried forward. Depending upon the terms of the HRA, coverage may (or may not) continue if the employee terminates service. An HRA is not portable.

“The operation of a healthcare provider in conjunction with such healthcare-related financial accounts (any of an FSA, an HSA, or an HRA) typically involves three entities which each have a predefined function. The first of these entities is a cardholder administrator that enrolls employees or other cardholders serviced by a particular healthcare program. The cardholder administrator, in the process of enrolling employees or cardholders, obtains information from the employees or cardholders and their dependants and provides that information to the second and third entities.

“The second entity is a medical insurance program administrator that administers the claims of cardholders under the medical insurance of the healthcare program. The medical insurance program administrator typically establishes payment schedules and deductibles for medical products and services and informs providers of such medical products and services of the amounts which will they be paid by the medical insurance portion of the healthcare program. The medical insurance program administrator also typically provides healthcare cards to the employees or cardholders, which they can present to providers of medical products and services as proof of enrollment in the medical insurance program.

“The third entity is a healthcare-related financial account administrator, which administers the healthcare-related financial accounts which are owned by the employees or cardholders. The healthcare-related financial account administrator reviews the eligibility of medical products and services which are submitted by employees or cardholders in order to determine whether the medical products and services are eligible for payment from the healthcare-related financial accounts. If the medical products and services are eligible, the healthcare-related financial account administrator then determines whether the cardholders have sufficient funds left in their healthcare-related financial accounts. If the medical product or services in question are eligible, and if there are sufficient funds, the healthcare-related financial account administrator sends payment, typically to the employee or cardholder.

“In all healthcare systems involving medical insurance, whether or not the employees or cardholders have healthcare-related financial accounts, the cardholders generally complete each transaction involving obtaining medical products or services by paying a remaining amount directly to the medical product or service providers. Additionally, in many healthcare systems there is uncertainty about the final cost to the employee or cardholder since the approval and payment systems do not operate in real time. Finally, since there is no central coordination of the various aspects of the healthcare program, each of the entities often operates without any interaction with the other entities.

“It is accordingly the primary objective of the present invention that it provide a system and method for linking a healthcare debit card to both a healthcare-related financial account and a non-healthcare-related financial account in addition to linking the healthcare debit card to a medical insurance program. It is a related objective of the present invention that the healthcare debit card contain sufficient information, either in printed form or in electronic form, or in both forms, to enable medical product and service providers to ascertain that the healthcare debit card provides for payment from the three sources. It is another related objective of the present invention that it be capable of working which any of a plurality of different healthcare-related financial accounts, including FSA, HSA, and HRA healthcare-related financial accounts.

“It is an additional objective of the present invention that it provide coordination between the submissions for payment of medical products and services to a medical insurance provider, the healthcare-related financial account, and the non-healthcare-related financial account to ensure that the submissions to these three entities are made quickly and in the proper sequence. It is a related objective that the system and method of the present invention be capable of operation in real time or in near-real time, thereby enabling complete resolution of payment for the medical products and services at the time of delivery. It is a further objective that the healthcare debit card used in the system and method of the present invention may optionally be used as a conventional credit or debit card for use in purchasing non-medical products and services.

“The system and method of the present invention must also be flexible of design and robust in operation, and once established it should require little or no effort to maintain it other than to keep the employee or cardholder data current. In order to enhance the market appeal of the system of the present invention, it should also be relatively inexpensive to implement and to operate to thereby give it a high perceived value-to-cost ratio to afford it the broadest possible market. Finally, it is also an objective that all of the aforesaid advantages and objectives of the system and method of the present invention be achieved without incurring any substantial relative disadvantage.”

In addition to obtaining background information on this patent application, NewsRx editors also obtained the inventors’ summary information for this patent application: “The disadvantages and limitations of the background art discussed above are overcome by the present invention. With this invention, a healthcare debit card is provided which has the cardholder’s name, a healthcare debit card number, and healthcare plan information typically including deductible amounts printed thereon. The healthcare debit card also has a magnetic stripe used to store data including information about the card, the cardholder, a healthcare plan, and financial account information on the back side of the healthcare debit card. Alternately, the healthcare debit card may instead be a standard size card which contains an electronic chip which may be used to store the same type of information. Such cards, commonly referred to as “smartcards,” have a built-in microprocessor and memory used for identification and/or financial transactions.

“The system of the present invention is used to link the healthcare debit card to a medical insurance provider and to a healthcare-related financial account, as well as to a non-healthcare-related financial account. The healthcare-related financial account may be a Flexible Spending Arrangement (FSA), a Health Savings Account (HSA), or a Health Reimbursement Arrangement (HRA). The non-healthcare-related financial account may be a bank checking or savings account or a credit card, or any other type of non-healthcare-related financial account.

“The system of the present invention links together a number of entities which each have a predefined function in the operation of the system. The first entity is a cardholder administrator that enrolls employees or other cardholders serviced by a particular healthcare program. The function of the cardholder administrator is to provide information regarding cardholders to the system, typically by entering that information into a computer terminal. The second entity is a medical insurance program administrator that administers the claims of cardholders under the medical insurance of the healthcare program. These two entities have existed historically, and the medical insurance program administrator has informed providers of medical products and services of the amounts which will be paid by the medical insurance of the healthcare program.

“A third entity is a healthcare-related financial account administrator, which administers healthcare-related financial accounts which are owned by cardholders. The healthcare-related financial account can be any one of a Flexible Spending Arrangement (FSA), a Health Savings Account (HSA), or a Health Reimbursement Arrangement (HRA). This entity has also existed historically, and the healthcare-related financial account administrator has reviewed the eligibility of medical products and services which are submitted by cardholders in order to determine whether the medical products and services are eligible for payment from the healthcare-related financial accounts. If they are eligible, the healthcare-related financial account administrator then pays for them if the cardholders have sufficient funds left in their healthcare-related financial accounts.

“The system and method of the present invention adds two additional entities, and also provides a mechanism for medical product and service providers to obtain essentially instant payment for all medical products and services. The first additional entity may be a financial institution in which a cardholder has a financial account, which may for example be any of a conventional checking or savings account or a credit card. The second additional entity is a system administrator, which serves to coordinate the operations performed under the system and method of the present invention between all of the other entities.

“In addition, each of the medical product and service providers is provided with a system interface to allow them to electronically communicate with the other entities in the system. This may be coordinated through the system administrator, or the interfaces of each of the entities may be configured to communicate with each other to the extent necessary and/or desirable. In the preferred embodiment, each of the medical product or service providers utilizes a facility terminal having a card reader to read the data stored on the healthcare debit card so that it may be transmitted to the various entities in the system that need the data. In the embodiment discussed herein, the communication between the various entities and providers may be provided by the Internet. Alternately, some or all of the network links between the various entities could be private networks as well.

“In operation, a cardholder presents the healthcare debit card to a medical product or service provider. The healthcare debit card is scanned and information relating to the medical product or service together with the data from the healthcare debit card is provided to the system of the present invention. The medical insurance program administrator reviews the information relating to the medical product or service and the data from the healthcare debit card and determines whether the medical product or service is covered and what the deductible amount is. Information relating to coverage and the remaining amount which is due for the medical product or service is then provided by the medical insurance program administrator to the system of the present invention.

“Next, the healthcare-related financial account administrator reviews the information relating to the medical product or service, the data from the healthcare debit card, and the remaining amount which is due for the medical product or service and determines whether the medical product or service is covered and whether the cardholder has sufficient funds in the healthcare-related financial account. Information relating to eligibility, payment of the remaining amount which is due for the medical product or service, and any resulting remaining amount due for the medical product or service is provided by the healthcare-related financial account administrator to the system of the present invention.

“If there is any remaining unpaid amount, the non-healthcare-related financial account administrator (which may be a DDA deposit bank or a credit card administrator) determines whether the cardholder has sufficient funds in the DDA deposit account or on the credit card. If there are sufficient funds in the non-healthcare-related financial account, the remaining amount due for the medical product or service is taken from the non-healthcare-related financial account, and the medical product or service provider is notified that the medical product or service is paid for. If there are not sufficient funds in the non-healthcare-related financial account, the medical product or service provider is notified that it must collect the remaining amount due for the medical product or service from the cardholder.

“In operation, the system can operate rapidly to provide a transaction which is essentially accomplished in real time even though there are a plurality of entities involved in each transaction. The perception to both the cardholder and the medical product or service provider is that there is a single transaction which results either in the entire cost of the medical product or service being paid or in the requirement that the cardholder must pay some or all of the cost of the medical product or service at that time. Optionally, the healthcare debit card may also function as a conventional charge card (credit or debit) as well for use in transactions other than for the purchase of medical products or services. In this case, the healthcare debit card can also be the non-healthcare-related financial account if desired.

“In the preferred embodiment, the system administrator is the interface between the other entities in the system of the present invention. Thus, the flow of information passes through the system administrator, thereby enabling the system administrator to ascertain the status of each transaction. Optionally, the system administrator’s role can be reduced, but those skilled in the art will recognize that one of the entities in the system serves to route the various operations to ensure that they are all carried out in the proper order.

“It may therefore be seen that the present invention teaches a system and method for linking a healthcare debit card to both a healthcare-related financial account and a non-healthcare-related financial account in addition to linking the healthcare debit card to a medical insurance program. The healthcare debit card used in the system and method of the present invention contains sufficient information, either in printed form or in electronic form or in both forms, to enable medical product and service providers to ascertain that the healthcare debit card provides for payment from the three sources. The system and method of the present invention is capable of working which any of a plurality of different healthcare-related financial accounts, including FSA, HSA, and HRA healthcare-related financial accounts.

“The system and method of the present invention provide coordination between the submissions for payment of medical products and services to a medical insurance provider, the healthcare-related financial account, and the non-healthcare-related financial account to ensure that the submissions to these three entities are made quickly and in the proper sequence. The system and method of the present invention are capable of operation in real time or in near-real time, thereby enabling complete resolution of payment for the medical products and services at the time of delivery. The healthcare debit card used in the system and method of the present invention can optionally be used as a conventional credit or debit card for use in purchasing non-medical products and services.”

There is additional summary information. Please visit full patent to read further.”

The claims supplied by the inventors are:

“1. A system for making payments for medical products and services, said system comprising: a healthcare card associated with a cardholder and a medical insurance plan, said healthcare debit card also being associated with first and second financial accounts of the cardholder, said first financial account being a healthcare-related financial account and said second financial account being a non-healthcare-related financial account; a data input station associated with a medical product and/or service provider, said data input station being operable to acquire first data and second data, said first data comprising information associated with said healthcare card and said second data comprising information related to a medical product and/or service provided or to be provided to the cardholder or a dependant of the cardholder covered by said medical insurance plan; a medical insurance processor that receives said first and second data, and in response determines whether said medical insurance plan offers coverage for said medical product and/or service and pays or arranges for the payment of any amount due from said medical insurance plan for said medical product and/or service, a determination as to whether a balance is due for said medical product and/or service being made following the determination by said medical insurance plan; a first financial processor that, if a non-zero balance is due for said medical product and/or service following consideration by said medical insurance processor, ascertains whether said first financial account allows payment for said medical product and/or service and has sufficient funds available and, if so, pays or arranges for the payment of all or part of the balance due for said medical product and/or service from said first financial account; and a second financial processor that, if a non-zero balance is due for said medical product and/or service following consideration by said first financial processor, ascertains whether said second financial account has sufficient funds available and, if so, pays or arranges for the payment of all or part of the balance due for said medical product and/or service from said second financial account.”

For more information, see this patent application: Dibiasi, John P.; Lindsey, Jimmie L.; Norman, Douglas L. Healthcare Debit Card Linked To Healthcare-Related And Non-Healthcare-Related Financial Accounts. Filed May 28, 2021 and posted December 23, 2021. Patent URL: https://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.html&r=1&f=G&l=50&s1=%2220210398076%22.PGNR.&OS=DN/20210398076&RS=DN/20210398076

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