Patent Issued for Payment card reconciliation by authorization code (USPTO 11468442): Vpay Inc.

2022 OCT 27 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- According to news reporting originating from Alexandria, Virginia, by NewsRx journalists, a patent by the inventors Allen, Robert M. (Plano, TX, US), Maxwell, Richard A. (Plano, TX, US), filed on June 29, 2020, was published online on October 11, 2022.

The assignee for this patent, patent number 11468442, is Vpay Inc. (Plano, Texas, United States).

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

“1. Field of the Invention

“This invention relates to payment processing. More specifically, it relates to facilitating the reconciliation of virtual card payments to 835 remittance advice files using an authorization code generated in the authorization process of the payment card transaction.

“2. Background of the Art

“The Health Insurance Portability and Accountability Act of 1996 (HIPAA) regulates the use and disclosure of Protected Health Information (PHI) held by “covered entities” (generally, health care clearinghouses, employer sponsored health plans, health insurers, and medical service providers that engage in certain transactions.) The ASC X12N 835 transaction (EDI 835 transaction set) is HIPAA mandated instrument by which electronic healthcare claim payment/advice must be reported.

“The EDI 837 transaction set is the format established to meet HIPAA requirements for the electronic submission of healthcare claim information. The claim information included amounts to the following, for a single care encounter between patient and provider: (1) a description of the patient; (2) the patient’s condition for which treatment was provided; (3) the services provided; and (4) the cost of the treatment. This transaction set is sent by the providers to payers, which include insurance companies, health maintenance organizations (HMOs), preferred provider organizations (PPOs), or government agencies such as Medicare, Medicaid, etc. These transactions may be sent either directly or indirectly via clearinghouses. Health insurers and other payers send their payments and coordination of benefits information back to providers via the EDI 835 transaction set.

“When a healthcare service provider submits an 837 health care claim, the insurance plan uses the 835 to detail the payment to that claim, including what charges were paid, reduced or denied. The 835 is important to healthcare providers, to track what payments were received for services they provided and billed.

“Although the 835 can transmit only remittance advice (EOB) it is often used in conjunction with remittance checks and more particularly, ACH electronic payments. For practice management software, the cycle of 837 files (outgoing payment requests) to 835 files (incoming payment advice) calls for associating the 837 and 835 data together for reconciliation and billing. However, in addition to checks and ACH transfers a new technology for payment was recently developed.

“Applicant developed a process described in U.S. Pat. No. 7,792,686, (succeeded by RE43904 and RE44748) the specification of which is incorporated herein by reference. The ‘686 patent discloses a method to deploy a virtual payment card to pay medical service claims. Since there is a one-to-one relationship between the payment card and the specific claim, reconciling the payment is made substantially more efficient. However, within the healthcare space, practice management software by numerous vendors look for the data in the 835 to line up with the data previously sent in the 837 file format. When accepting a virtual payment card as payment for a claim a new issue arises . . . how to link that payment card transaction with the 837 claim file, the 835 remittance advice and the merchant account statement for the healthcare provider.

“A need exists in the art for a method to convey virtual card payment transaction data in the 835 remittance file.”

In addition to obtaining background information on this patent, NewsRx editors also obtained the inventors’ summary information for this patent: “A payment processor acting on behalf of a third party administrator (TPA) to make payment on an adjudicated claim makes a straight through payment to an acquirer for a health care provider’s merchant account. Via the settlement process of a straight through payment made between payment processor and the acquirer for the health care provider’s merchant account, the payment processor generates an authorization code which is returned to the health care provider on its merchant statement for the payment. An authorization code is a numerical or alphanumerical code sent directly by a credit card issuer or issuing bank that is uniquely ascribed to a sales transaction as verification that the completed sale has been authorized.

“Concurrently, the remittance advice from the third party administrator is linked to the same authorization code as the payment by the payment processor which sends the advice in an 835-formatted transmission to the health care provider. Thus, the remittance advice may be linked (reconciled) with the payment on the merchant statement by the common authorization code.

“In an embodiment of the invention, a payment processor computing system operating on a computing device receives a data file by a secure FTP transfer from a remote administrator computer to pay an adjudicated claim in an authorized amount to the healthcare provider. The data file includes remittance advice for the claim previously submitted by the healthcare provider which is typically filed in an 837 claim transaction set format.

“The payment processor computing system electronically requests a virtual payment card account from a card issuing application in an amount equal to the authorized amount for payment of the claim to the healthcare provider and sends the virtual payment card account data to a payment card acquirer for the healthcare provider of the claim. Data includes the healthcare provider tax identification number, virtual card account number, card expiration date and CVV security code. The payment card acquirer electronically requests authorization from a card network for the virtual payment card data in an amount equal to the authorized amount for the claim. The payment processor computing system directs the generation of an authorization code for the virtual payment card authorization request. In one embodiment of the invention, the authorization code may be randomly generated and then inserted into the 835-format remittance advice file to be sent to the healthcare provider. Another embodiment uses the claim identifier of the 837 claim transaction set or a transaction set code itself as a plug-in value for the authorization code. It is also anticipated that the 837 claim code or transaction code could be a portion or a seed value for the authorization code.

“The 835-format remittance advice file is sent from the payment processor computing system to the healthcare provider, the remittance advice file includes the authorization code, whereby the authorization code links funds received through the virtual payment card transaction to the 835 file wherein the healthcare provider may reconcile the payment received through the virtual payment card transaction with the 835 remittance advice file. In an embodiment of the invention, practice management software operated by the healthcare provider imports an electronic 835-format remittance advice file and also imports merchant account statement data which includes the virtual payment card deposit having the authorization code wherein the practice management software automatically links the 835 file with the merchant account statement deposit thereby highly automating both reconciliation and billing to the patient of any unpaid amounts.”

The claims supplied by the inventors are:

“1. A computer-implemented method of minimizing transmissions of sensitive payment data and automatically reconciling claims with electronic payment transactions for a healthcare provider, the method comprising the steps of: receiving, over a computer network, a data file by a payment processor computing system, wherein the data file is sent from a remote administrator computer, the data file further including: instructions to pay one or more adjudicated claims in an authorized amount to a healthcare provider having a tax identification number; a remittance advice file originating in response to one or more claims previously submitted by the healthcare provider; electronically requesting, by the payment processor computing system, electronic payment, wherein the electronic payment is configured to be charged an amount equal to the authorized amount for payment of the one or more adjudicated claims; electronically sending, by the payment processor computing system, the healthcare provider’s tax identification number and the electronic payment data to a merchant acquirer for the healthcare provider, wherein the merchant acquirer electronically requests authorization for the electronic payment data in an amount equal to the authorized amount to be paid to the healthcare provider for the one or more adjudicated claims; generating an authorization code for the electronic payment authorization request, by the payment processor computing system; setting, by the payment processor computing system, the authorization code to a claim identifier value provided in the one or more claims previously submitted by the healthcare provider, whereby the authorization response includes the claim identifier value as the authorization code; inserting the authorization code into the remittance advice file to digitally create a modified remittance advice file; and electronically sending the modified remittance advice file from the payment processor computing system to the healthcare provider, whereby the authorization code links funds received through an electronic payment transaction to the modified remittance advice file such that the healthcare provider’s practice management software can automatically reconcile the payment received through the electronic payment transaction with the modified remittance advice file.

“2. The method of claim 1, wherein the modified remittance advice file is computer readable and electronically sent to the healthcare provider from the payment processor computing system.

“3. A computer-implemented method of minimizing transmissions of sensitive payment data and automatically reconciling claims with electronic payment transactions for a healthcare provider, the method comprising the steps of: Receiving, over a computer network, a data file by a payment processor computing system, wherein the data file is sent from a remote administrator computer, the data file further including: instructions to pay one or more adjudicated claims in an authorized amount to a healthcare provider having a tax identification number; a remittance advice file originating in response to one or more claims previously submitted by the healthcare provider; electronically requesting, by the payment processor computing system, electronic payment from a payment issuing authority, wherein the electronic payment is configured to be charged an amount equal to the authorized amount for payment of the one or more adjudicated claims; electronically sending, by the payment processor computing system, the healthcare provider’s tax identification number and the electronic payment data to a merchant acquirer for the healthcare provider, wherein the merchant acquirer electronically requests authorization for the electronic payment data in an amount equal to the authorized amount to be paid to the healthcare provider for the one or more adjudicated claims; generating an authorization code for the electronic payment authorization request, by the payment processor computing system; setting, by the payment processor computing system, the authorization code to a claim identifier value provided in the one or more claims previously submitted by the healthcare provider, whereby the authorization response sent by the payment issuing authority includes the claim identifier value as the authorization code; and inserting the authorization code into the remittance advice file to digitally create a modified remittance advice file; and electronically sending the modified remittance advice file from the payment processor computing system to the healthcare provider, whereby the authorization code links funds received through an electronic payment transaction to the modified remittance advice file such that the healthcare provider’s practice management software can automatically reconcile the payment received through the electronic payment transaction with the modified remittance advice file.

“4. The method of claim 3, wherein the modified remittance advice file is computer readable and electronically sent to the healthcare provider from the payment processor computing system.

“5. A computer-implemented method of minimizing transmissions of sensitive payment data and automatically reconciling claims with electronic payment transactions for a healthcare provider, the method comprising the steps of: receiving, over a computer network, a data file by a payment processor computing system, wherein the data file is sent from a remote administrator computer, the data file further including: instructions to pay one or more adjudicated claims in an authorized amount to a healthcare provider having a tax identification number; a remittance advice file originating in response to one or more claims previously submitted by the healthcare provider; electronically requesting, by the payment processor computing system, electronic payment, wherein the electronic payment is configured to be charged an amount equal to the authorized amount for payment of the one or more adjudicated claims; electronically sending, by the payment processor computing system, the electronic payment data to the healthcare provider, whereby the healthcare provider can electronically request authorization for the electronic payment data in an amount equal to the authorized amount to be paid to the healthcare provider for the one or more adjudicated claims; generating an authorization code for the electronic payment authorization request, by the payment processor computing system; setting, by the payment processor computing system, the authorization code to a claim identifier value provided in the one or more claims previously submitted by the healthcare provider, whereby the authorization response includes the claim identifier value as the authorization code; inserting the authorization code into the remittance advice file to digitally create a modified remittance advice file; and electronically sending the modified remittance advice file from the payment processor computing system to the healthcare provider, whereby the authorization code links funds received through an electronic payment transaction to the modified remittance advice file such that the healthcare provider’s practice management software can automatically reconcile the payment received through the electronic payment transaction with the modified remittance advice file.

“6. The method of claim 5, wherein the modified remittance advice file is computer readable and electronically sent to the healthcare provider from the payment processor computing system.”

For more information, see this patent: Allen, Robert M. Payment card reconciliation by authorization code. U.S. Patent Number 11468442, filed June 29, 2020, and published online on October 11, 2022. Patent URL: http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=11468442.PN.&OS=PN/11468442RS=PN/11468442

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