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Assignment of benefit, widely known as AOB, is a contractual agreement signed by a policyholder which enables a third party to file a claim, asking them to pay the designated amount directly to your provider for the rendered service. As AOB authorizes a third party to file a claim, make a decision, repair, and collect the payment from the insurer does not require your involvement and takes up to one month to receive the reimbursement.
Purpose of Assignment of Benefit
An assignment of benefits is efficient or customer-friendly to leave that claim to the contractor without the policyholder losing too much sleep.
Understanding Assignment of Benefit
- By signing the assignment of benefits document, a patient authorizes a third party to make payments directly to the treating provider. That benefits the providers tremendously by having insurance reimbursements directly instead of the patient for further appeals, denials, or underpayments from the carrier.
- For instance, if a patient is getting treatment from a non-participating provider or out-of-network provider, in that case, there is no legal contract between the provider and the third party for the negotiated rates for the rendered service. By having signed Assignments of Benefits, the out-of-network provider may submit the document with the claim in the expectation of receiving the payment at the actual billed charges directly to the provider. That is convenient for both the patient as well as for the provider.
- Also, if the out-of-network provider files the claim and the insurance company does not agree or pays less than the actual billed charges, then the provider can appeal the denial or underpayment. Although, it does not guarantee to recover the underpaid reimbursement from the insurer.
Services that use Assignment of Benefits
- Ambulatory services
- Ambulatory surgical center services
- Biological(s) and drugs
- Clinical diagnostic laboratory services
- Home dialysis equipment and supplies
- Medical services for patients that have Medicaid and Medicare plans
- Services of professionals like clinical nurse specialists, certified nurse anesthetics, clinical social workers, clinical psychologists, nurse practitioners, physician assistants, and nurse midwives use AOB.
- Vaccinations such as pneumococcal and influenza virus
Protecting your patients from the Assignment of Benefits fraud
- Before hiring a contractor, get an estimate for the claim cost.
- Check for reviews and references before hiring them.
- Read the contract and get everything in writing, such as time schedules for the work, payment schedules, cost of the work, what will be the work, and check documents that are sent to the insurer to avoid any abuse by inflating claim cost and charging unnecessary.
Impact of Assignment of Benefits on the Insurance Industry
Inflated claims and massive legal actions can dwarf the benefits to the patients by increasing the cost of the insurance premiums and more restrictive terms and conditions. The legal handling cost of the insurers will rise, eventually resulting in deductions leaving the policyholders out of pocket for potentially significant loss.