Card Please - Meritain Health

Successful pilot

One company at the forefront of the medical debit card field is UnitedHealth Group, which has 19 million cards in circulation through its Exante Financial Services subsidiary, said John Prince, Exante CEO. After a successful pilot, UnitedHealth unveiled real-time adjudication at physicians' offices earlier this year. Claims can be settled in 10 seconds, which speeds payment to physicians and gives patients a clearer and more direct understanding of both the costs and the funds available in their flexible spending accounts (FSAs), health reimbursement accounts (HRAs), and health savings accounts (HSAs).

UnitedHealth has now set its sights on making real-time adjudication available to physicians through other channels, including third-party claims clearinghouses. Pilot projects will begin soon with select clearinghouse partners and healthcare professionals.

"Our strategy is determining how the card can make the consumer's experience easier," said Prince. "The card is swipable for eligibility requirements, collecting co-pays, triggering access to a patient's ortable health record, and making payments."

Another twist to the medical debit card is linking multiple accounts to a single card and partnering with a financial institution to offer a line of credit should a patient exhaust his discretionary accounts for healthcare spending.

Transforming HSAs

Estimates put the number of people with FSAs using medical debit cards at under 10%, but that should increase as consumer-directed health plans focus more attention on self-funded and employer-funded methods to pay for out-of-pocket expenses, said Janice Rahm, senior vice president of product and service development at Meritain Health, one of the nation's largest independent providers of services for self- funded health plans. Based in Amherst, NY, Meritain serves more than 1,400 self-funded clients and more than 1 million members nationally.

The Health Care Act of 2006 likely will transform use of HSAs by removing limitations on contributions based on one's deductible. An individual now can contribute up to $2,850 annually and a family up to $5,650 each year, regardless of the deductible on any insurance plan.

Meritain's debit card can combine savings in multiple spending accounts in one place so patients can better manage their healthcare dollars. Cards can be linked to a line of credit offered by financial institutions to pay for expenses that exceed spending account funds.

"Line of credit has been talked about for years because of concerns among employers and employees about the gap between what's in a spending account and high-deductible insurance plans," said Rahm.

Another interesting twist to the medical debit card is its use in employer-sponsored wellness programs, Rahm said. An employer can put money in worker HRAs to encourage certain behaviors, such as completing a risk assessment or getting an annual physical. "We've had an overwhelming response to this program," Rahm said. "A $50 incentive is $50 with no tax burden."

The Holy Grail

The still-limited utility of medical debit cards is one of the reasons that only half of Highmark, Inc.'s tax-deferred account users have them, said Kim Bellard, vice president of e-marketing and CRM at Pittsburgh-based Highmark. Significant hurdles remain to gain further entry into physicians' offices, much less labs and hospitals, with so many insurance plans, pricing options, co-pays, network and out-of-network providers, and procedures to deal with.

"There are doctor's office pilots for certain procedures and certain providers, but we're still a few years away from any real-time adjudication," said Bellard. "That's really the Holy Grail, when the medical debit card will be like other consumer experiences."

Interoperability standards remain the biggest challenge to overcome to wring the true benefits of medical debit cards. If the technology works as insurers believe it should, a physician's office will be able to use one card reader to service patients from any insurance plan the practice honors. "Like an ATM, it should just work," said Prince. "We're working with states on interoperability, and I think we'll have interoperability standards by the end of the year."

An executive order issued by President Bush in August promoting quality and efficiency in federal government-administered or sponsored healthcare programs should help speed interoperability, said Stephen Lynch, president of Health Net of California, based in Woodland Hills. The company, a subsidiary of Health Net, Inc., is one of the largest health plans in the state, serving nearly 2.3 million members statewide.

"It doesn't address debit card technology per se, but anybody with contacts with the federal government will have to comply," said Lynch, adding that Health Net will be affected by the order. "I don't think anybody cares about what standard is adopted, but they want to adopt it."

The move toward interoperability could also speed use of debit cards or a similar portable device to allow patients to carry their health records with them, eliminating much of the paperwork a patient has to fill out before seeing a doctor or having a procedure done.

"Debit cards are not exactly cutting-edge technology, but doctors' offices are catching up," Lynch said. "When we get it right, it'll be a slam dunk."

Grayson Walker, grwalker@mindspring.com, is a freelance writer based in Atlanta.

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