assignment in health insurance

What is an assignment of benefits?

Jim Probasco is an expert in the areas of personal income, saving and investing, banking, home buying, insurance, and more. A Dayton, Ohio-based writer, Jim has written for radio and television, and authored books for parents in arts education opportunities for their children.

The last time you sought medical care, you likely made an appointment with your provider, got the treatment you needed, paid your copay or deductible, and that was it. No paperwork, no waiting to be reimbursed; your doctor received payment from your insurance company and you both went on with your lives.

This is how most people receive health care in the U.S. This system, known as assignment of benefits or AOB, is now being used with other types of insurance, including auto and homeowners coverage .

What is an assignment of benefits?

An AOB is a legal agreement that allows your insurance company to directly pay a third party for services performed on your behalf. In the case of health care, it could be your doctor or another medical professional providing care. With a homeowners, renters, or auto insurance claim, the third party could be a contractor, auto repair shop, or other facility.

Assignment of benefits is legal, thanks to a concept known as freedom of contract, which says two parties may make a private agreement, including the forfeiture of certain rights, and the government may not interfere. There are exceptions, making freedom of contract something less than an absolute right. For example, the contract may not violate the law or contain unfair terms.

Not all doctors or contractors utilize AOBs. Therefore, it’s a good idea to make sure the doctor or service provider and you are on the same page when it comes to AOBs before treatment or work begins.

How an AOB works

The function of an AOB agreement varies depending on the type of insurance policy involved, the healthcare provider, contractor, or service provider, and increasingly, state law. Although an AOB is normal in health insurance, other applications of assignment of benefits have now included the auto and homeowners insurance industry.

Because AOBs are common in health care, you probably don’t think twice about signing a piece of paper that says “assignment of benefits” across the top. But once you sign it, you’re likely turning over your right to deal with your insurance company regarding service from that provider. Why would you do this?

According to Dr. David Berg of Redirect Health , the reason is simple: “Without an AOB in place, the patient themselves would be responsible for paying the cost of their service and would then file a claim with their insurance company for reimbursement.”

With homeowners or auto insurance, the same rules apply. Once you sign the AOB, you are effectively out of the picture. The contractor who reroofs your house or the mechanic who rebuilds your engine works with your insurance company by filing a claim on your behalf and receiving their money without your help or involvement.

“Each state has its own rules, regulations, and permissions regarding AOBs,” says Gregg Barrett, founder and CEO of WaterStreet , a cloud-based P&C insurance administration platform. “Some states require a strict written breakdown of work to be done, while others allow assignment of only parts of claims.”

Within the guidelines of the specific insurance rules for AOBs in your state, the general steps include:

You and your contractor draw up an AOB clause as part of the contract.
The contract stipulates the exact work that will be completed and all necessary details.
The contractor sends the completed AOB to the insurance company where an adjuster reviews, asks questions, and resolves any discrepancies.
The contractor’s name (or that of an agreed-upon party) is listed to go on the settlement check.

After work is complete and signed off, the insurer will issue the check and the claim will be considered settled.

The 10 best insurance companies for small businesses What is bond insurance, and how can it protect your business?

Example of an assignment of benefits

If you’re dealing with insurance, how would an AOB factor in? Let’s take an example. “Say you have a water leak in the house,” says Angel Conlin, chief insurance officer at Kin Insurance . “You call a home restoration company to stop the water flow, clean up the mess, and restore your home to its former glory. The restoration company may ask for an assignment of benefits so it can deal directly with the insurance company without your input.”

In this case, by eliminating the homeowner, whose interests are already represented by an experienced insurance adjustor, the AOB reduces redundancy, saves time and money, and allows the restoration process to proceed with much greater efficiency.

When would you need to use an assignment of benefits?

An AOB can simplify complicated and costly insurance transactions and allow you to turn these transactions over to trusted experts, thereby avoiding time-consuming negotiations.

An AOB also frees you from paying the entire bill upfront and seeking reimbursement from your insurance company after work has been completed or services rendered. Since you are not required to sign an assignment of benefits, failure to sign will result in you paying the entire medical bill and filing for reimbursement. The three most common uses of AOBs are with health insurance, car insurance, and homeowners insurance.

Assignment of benefits for health insurance

As discussed, AOBs in health insurance are commonplace. If you have health insurance, you’ve probably signed AOBs for years. Each provider (doctor) or practice requires a separate AOB. From your point of view, the big advantages of an AOB are that you receive medical care, your doctor and insurance company work out the details and, in the event of a disagreement, those two entities deal with each other.

Assignment of benefits for car owners

If your car is damaged in an accident and needs extensive repair, the benefits of an AOB can quickly add up. Not only will you have your automobile repaired with minimal upfront costs to you, inconvenience will be almost nonexistent. You drop your car off (or have it towed), wait to be called, told the repair is finished, and pick it up. Similar to a health care AOB, disagreements are worked out between the provider and insurer. You are usually not involved.

Assignment of benefits for homeowners

When your home or belongings are damaged or destroyed, your primary concern is to “return to normal.” You want to do this with the least amount of hassle. An AOB allows you to transfer your rights to a third party, usually a contractor, freeing you to deal with the crisis at hand.

When you sign an AOB, your contractor can begin immediately working on damage repair, shoring up against additional deterioration, and coordinating with various subcontractors without waiting for clearance or communication with you.

The fraud factor

No legal agreement, including an AOB, is free from the possibility of abuse or fraud. Built-in safeguards are essential to ensure the benefits you assign to a third party are as protected as possible.

In terms of what can and does go wrong, the answer is: plenty. According to the National Association of Mutual Insurance Companies (NAMICs), examples of AOB fraud include inflated invoices or charges for work that hasn’t been done. Another common tactic is to sue the insurance company, without the policyholder’s knowledge or consent, something that can ultimately result in the policyholder being stuck with the bill and higher insurance premiums due to losses experienced by the insurer.

State legislatures have tried to protect consumers from AOB fraud and some progress has been made. Florida, for example, passed legislation in 2019 that gives consumers the right to rescind a fraudulent contract and requires that AOB contracts include an itemized description of the work to be done. Other states, including North Dakota, Kansas, and Iowa have all signed NAMIC-backed legislation into law to protect consumers from AOB fraud.

The National Association of Insurance Commissioners (NAIC), offers advice for consumers to help avoid AOB fraud and abuse:

File a claim with your insurer before you hire a contractor. This ensures you know what repairs need to be made.
Don’t pay in full upfront. Legitimate contractors do not require it.
Get three estimates before selecting a contractor.
Get a full written contract and read it carefully before signing.
Don’t be pressured into signing an AOB. You are not required to sign an AOB.

Pros and cons of an assignment of benefits

The advantages and disadvantages of an AOB agreement depend largely on the amount and type of protection your state’s insurance laws provide.

An AOB frees you from paying for services and waiting for reimbursement from your insurer
Some people appreciate not needing to negotiate with their insurer
You are not required to sign an AOB.
Signing an AOB could make you the victim of a scam without knowing it until your insurer refuses to pay
An AOB doesn’t free you from the ultimate responsibility to pay for services rendered, which could drag you into expensive litigation if things go south
Any AOB you do sign is legally binding

The takeaway

An AOB, as the health insurance example shows, can simplify complicated and costly insurance transactions and help consumers avoid time-consuming negotiations. And it can save upfront costs while letting experts work out the details.

It can also introduce a nightmare scenario laced with fraud requiring years of costly litigation. Universal state-level legislation with safeguards is required to avoid the latter. Until that is in place, your best bet is to work closely with your insurer when signing an AOB. Look for suspicious or inflated charges when negotiating with contractors, providers, and other servicers.

Our ranking of the best jewelry insurance can help you insure your personal treasures.
Entrepreneurs need to check out this list of the best small business insurance companies .
Check out the best personal loans to help fund your next big purchase.
Small business owners should check out this ranking of the best business checking accounts .

Follow Fortune Recommends on Facebook and Twitter .

About the contributors

EDITORIAL DISCLOSURE : The advice, opinions, or rankings contained in this article are solely those of the Fortune Recommends ™ editorial team. This content has not been reviewed or endorsed by any of our affiliate partners or other third parties.

Construction Accidents

Practice Areas

Retirement Planning

Assignment of Benefits: What You Need to Know

August 17, 2022
Steven Schwartzapfel

Insurance can be useful, but dealing with the back-and-forth between insurance companies and contractors, medical specialists, and others can be a time-consuming and ultimately unpleasant experience. You want your medical bills to be paid without having to act as a middleman between your healthcare provider and your insurer.

However, there’s a way you can streamline this process. With an assignment of benefits, you can designate your healthcare provider or any other insurance payout recipient as the go-to party for insurance claims. While this can be convenient, there are certain risks to keep in mind as well.

Below, we’ll explore what an assignment of insurance benefits is (as well as other forms of remediation), how it works, and when you should employ it. For more information, or to learn whether you may have a claim against an insurer, contact Schwartzapfel Lawyers now at 1-516-342-2200 .

What Is an Assignment of Benefits?

An assignment of benefits (AOB) is a legal process through which an insured individual or party signs paperwork that designates another party like a contractor, company, or healthcare provider as their insurance claimant .

Suppose you’re injured in a car accident and need to file a claim with your health insurance company for medical bills and related costs. However, you also need plenty of time to recover. The thought of constantly negotiating between your insurance company, your healthcare provider, and anyone else seems draining and unwelcome.

With an assignment of benefits, you can designate your healthcare provider as your insurance claimant. Then, your healthcare provider can request insurance payouts from your healthcare insurance provider directly.

Through this system, the health insurance provider directly pays your physician or hospital rather than paying you. This means you don’t have to pay your healthcare provider. It’s a streamlined, straightforward way to make sure insurance money gets where it needs to go. It also saves you time and prevents you from having to think about insurance payments unless absolutely necessary.

What Does an Assignment of Benefits Mean?

An AOB means that you designate another party as your insurance claimant. In the above example, that’s your healthcare provider, which could be a physician, hospital, or other organization.

With the assignment of insurance coverage, that healthcare provider can then make a claim for insurance payments directly to your insurance company. The insurance company then pays your healthcare provider directly, and you’re removed as the middleman.

As a bonus, this system sometimes cuts down on your overall costs by eliminating certain service fees. Since there’s only one transaction — the transaction between your healthcare provider and your health insurer — there’s only one set of service fees to contend with. You don’t have to deal with two sets of service fees from first receiving money from your insurance provider, then sending that money to your healthcare provider.

Ultimately, the point of an assignment of benefits is to make things easier for you, your insurer, and anyone else involved in the process.

What Types of Insurance Qualify for an Assignment of Benefits?

Most types of commonly held insurance can work with an assignment of benefits. These insurance types include car insurance, healthcare insurance, homeowners insurance, property insurance, and more.

Note that not all insurance companies allow you to use an assignment of benefits. For an assignment of benefits to work, the potential insurance claimant and the insurance company in question must each sign the paperwork and agree to the arrangement. This prevents fraud (to some extent) and ensures that every party goes into the arrangement with clear expectations.

If your insurance company does not accept assignments of benefits, you’ll have to take care of insurance payments the traditional way. There are many reasons why an insurance company may not accept an assignment of benefits.

To speak with a Schwartzapfel Lawyers expert about this directly, call 1-516-342-2200 for a free consultation today. It will be our privilege to assist you with all your legal questions, needs, and recovery efforts.

Who Uses Assignments of Benefits?

Many providers, services, and contractors use assignments of benefits. It’s often in their interests to accept an assignment of benefits since they can get paid for their work more quickly and make critical decisions without having to consult the insurance policyholder first.

Imagine a circumstance in which a homeowner wants a contractor to add a new room to their property. The contractor knows that the scale of the project could increase or shrink depending on the specifics of the job, the weather, and other factors.

If the homeowner uses an assignment of benefits to give the contractor rights to make insurance claims for the project, that contractor can then:

Bill the insurer directly for their work. This is beneficial since it ensures that the contractor’s employees get paid promptly and they can purchase the supplies they need.
Make important decisions to ensure that the project completes on time. For example, a contract can authorize another insurance claim for extra supplies without consulting with the homeowner beforehand, saving time and potentially money in the process.

Practically any company or organization that receives payments from insurance companies may choose to take advantage of an assignment of benefits with you. Example companies and providers include:

Ambulance services
Drug and biological companies
Lab diagnostic services
Hospitals and medical centers like clinics
Certified medical professionals such as nurse anesthetists, nurse midwives, clinical psychologists, and others
Ambulatory surgical center services
Permanent repair and improvement contractors like carpenters, plumbers, roofers, restoration companies, and others
Auto repair shops and mechanic organizations

Advantages of Using an Assignment of Benefits

An assignment of benefits can be an advantageous contract to employ, especially if you believe that you’ll need to pay a contractor, healthcare provider, and/or other organization via insurance payouts regularly for the near future.

These benefits include but are not limited to:

Save time for yourself. Again, imagine a circumstance in which you are hospitalized and have to pay your healthcare provider through your health insurance payouts. If you use an assignment of benefits, you don’t have to make the payments personally or oversee the insurance payouts. Instead, you can focus on resting and recovering.
Possibly save yourself money in the long run. As noted above, an assignment of benefits can help you circumvent some service fees by limiting the number of transactions or money transfers required to ensure everyone is paid on time.
Increased peace of mind. Many people don’t like having to constantly think about insurance payouts, contacting their insurance company, or negotiating between insurers and contractors/providers. With an assignment of benefits, you can let your insurance company and a contractor or provider work things out between them, though this can lead to applications later down the road.

Because of these benefits, many recovering individuals, car accident victims, homeowners, and others utilize AOB agreements from time to time.

Risks of Using an Assignment of Benefits

Worth mentioning, too, is that an assignment of benefits does carry certain risks you should be aware of before presenting this contract to your insurance company or a contractor or provider. Remember, an assignment of benefits is a legally binding contract unless it is otherwise dissolved (which is technically possible).

The risks of using an assignment of benefits include:

You give billing control to your healthcare provider, contractor, or another party. This allows them to bill your insurance company for charges that you might not find necessary. For example, a home improvement contractor might bill a homeowner’s insurance company for an unnecessary material or improvement. The homeowner only finds out after the fact and after all the money has been paid, resulting in a higher premium for their insurance policy or more fees than they expected.
You allow a contractor or service provider to sue your insurance company if the insurer does not want to pay for a certain service or bill. This can happen if the insurance company and contractor or service provider disagree on one or another billable item. Then, you may be dragged into litigation or arbitration you did not agree to in the first place.
You may lose track of what your insurance company pays for various services . As such, you could be surprised if your health insurance or other insurance premiums and deductibles increase suddenly.

Given these disadvantages, it’s still wise to keep track of insurance payments even if you choose to use an assignment of benefits. For example, you might request that your insurance company keep you up to date on all billable items a contractor or service provider charges for the duration of your treatment or project.

For more on this and related topic, call Schwartzapfel Lawyers now at 1-516-342-2200 .

How To Make Sure an Assignment of Benefits Is Safe

Even though AOBs do carry potential disadvantages, there are ways to make sure that your chosen contract is safe and legally airtight. First, it’s generally a wise idea to contact knowledgeable legal representatives so they can look over your paperwork and ensure that any given assignment of benefits doesn’t contain any loopholes that could be exploited by a service provider or contractor.

The right lawyer can also make sure that an assignment of benefits is legally binding for your insurance provider. To make sure an assignment of benefits is safe, you should perform the following steps:

Always check for reviews and references before hiring a contractor or service provider, especially if you plan to use an AOB ahead of time. For example, you should stay away if a contractor has a reputation for abusing insurance claims.
Always get several estimates for work, repairs, or bills. Then, you can compare the estimated bills and see whether one contractor or service provider is likely to be honest about their charges.
Get all estimates, payment schedules, and project schedules in writing so you can refer back to them later on.
Don’t let a service provider or contractor pressure you into hiring them for any reason . If they seem overly excited about getting started, they could be trying to rush things along or get you to sign an AOB so that they can start issuing charges to your insurance company.
Read your assignment of benefits contract fully. Make sure that there aren’t any legal loopholes that a contractor or service provider can take advantage of. An experienced lawyer can help you draft and sign a beneficial AOB contract.

Can You Sue a Party for Abusing an Assignment of Benefits?

Sometimes. If you believe your assignment of benefits is being abused by a contractor or service provider, you may be able to sue them for breaching your contract or even AOB fraud. However, successfully suing for insurance fraud of any kind is often difficult.

Also, you should remember that a contractor or service provider can sue your insurance company if the insurance carrier decides not to pay them. For example, if your insurer decides that a service provider is engaging in billing scams and no longer wishes to make payouts, this could put you in legal hot water.

If you’re not sure whether you have grounds for a lawsuit, contact Schwartzapfel Lawyers today at 1-516-342-2200 . At no charge, we’ll examine the details of your case and provide you with a consultation. Don’t wait. Call now!

Assignment of Benefits FAQs

Which states allow assignments of benefits.

Every state allows you to offer an assignment of benefits to a contractor and/or insurance company. That means, whether you live in New York, Florida, Arizona, California, or some other state, you can rest assured that AOBs are viable tools to streamline the insurance payout process.

Can You Revoke an Assignment of Benefits?

Yes. There may come a time when you need to revoke an assignment of benefits. This may be because you no longer want the provider or contractor to have control over your insurance claims, or because you want to switch providers/contractors.

To revoke an assignment of benefits agreement, you must notify the assignee (i.e., the new insurance claimant). A legally solid assignment of benefits contract should also include terms and rules for this decision. Once more, it’s usually a wise idea to have an experienced lawyer look over an assignment of benefits contract to make sure you don’t miss these by accident.

Contact Schwartzapfel Lawyers Today

An assignment of benefits is an invaluable tool when you need to streamline the insurance claims process. For example, you can designate your healthcare provider as your primary claimant with an assignment of benefits, allowing them to charge your insurance company directly for healthcare costs.

However, there are also risks associated with an assignment of benefits. If you believe a contractor or healthcare provider is charging your insurance company unfairly, you may need legal representatives. Schwartzapfel Lawyers can help.

As knowledgeable New York attorneys who are well-versed in New York insurance law, we’re ready to assist with any and all litigation needs. For a free case evaluation and consultation, contact Schwartzapfel Lawyers today at 1-516-342-2200 !

Schwartzapfel Lawyers, P.C. | Fighting For You™™

What Is an Insurance Claim? | Experian

What is assignment of benefits, and how does it impact insurers? | Insurance Business Mag

Florida Insurance Ruling Sets Precedent for Assignment of Benefits | Law.com

Can you plead the fifth in a civil case.

Most of us associate the Fifth Amendment with police interrogations and criminal courtrooms on TV. But what if you find

Do Civil Cases Have A Jury?

If you or a loved one has been injured and are seeking financial compensation, you might be wondering what to

De Jure vs. De Facto: The Differences Explained

Two important concepts often get tangled in the legal system: de jure vs. de facto. These Latin terms may sound

We'll Fight For You

Schwartzapfel® lawyers has a 99% client satisfaction rate, quick links.

News & Events
Verdicts & Settlements
Video Gallery
Wrongful Death
Vehicle Accidents
Slip & Fall
Medical Malpractice
Workers' Compensation
Personal Injuries
Product Liability
Garden City

Speak with a Licensed Insurance Agent

(888) 335-8996

Medicare Assignment

Home / Medicare 101 / Medicare Costs / Medicare Assignment

Summary: If a provider accepts Medicare assignment, they accept the Medicare-approved amount for a covered service. Though most providers accept assignment, not all do. In this article, we’ll explain the differences between participating, non-participating, and opt-out providers. You’ll also learn how to find physicians in your area who accept Medicare assignment. Estimated Read Time: 5 min

What is Medicare Assignment

Medicare assignment is an agreement by your doctor or other healthcare providers to accept the Medicare-approved amount as the full cost for a covered service. Providers who “accept assignment” bill Medicare directly for Part B-covered services and cannot charge you more than the applicable deductible and coinsurance.

Most healthcare providers who opt-in to Medicare accept assignment. In fact, CMS reported in its Medicare Participation for Calendar Year 2024 announcement that 98 percent of Medicare providers accepted assignment in 2023.

Providers who accept Medicare are divided into two groups: Participating providers and non-participating providers. Providers can decide annually whether they want to participate in Medicare assignment, or if they want to be non-participating.

Providers who do not accept Medicare Assignment can charge up to 15% above the Medicare-approved cost for a service. If this is the case, you will be responsible for the entire amount (up to 15%) above what Medicare covers.

Below, we’ll take a closer look at participating, non-participating, and opt-out physicians.

Medicare Participating Providers: Providers Who Accept Medicare Assignment

Healthcare providers who accept Medicare assignment are known as “participating providers”. To participate in Medicare assignment, a provider must enter an agreement with Medicare called the Participating Physician or Supplier Agreement. When a provider signs this agreement, they agree to accept the Medicare-approved charge as the full charge of the service. They cannot charge the beneficiary more than the applicable deductible and coinsurance for covered services.

Each year, providers can decide whether they want to be a participating or non-participating provider. Participating in Medicare assignment is not only beneficial to patients, but to providers as well. Participating providers get paid by Medicare directly, and when a participating provider bills Medicare, Medicare will automatically forward the claim information to Medicare Supplement insurers. This makes the billing process much easier on the provider’s end.

Medicare Non-Participating Providers: Providers Who Don’t Accept Assignment

Healthcare providers who are “non-participating” providers do not agree to accept assignment and can charge up to 15% over the Medicare-approved amount for a service. Non-participating Medicare providers still accept Medicare patients. However they have not agreed to accept the Medicare-approved cost as the full cost for their service.

Doctors who do not sign an assignment agreement with Medicare can still choose to accept assignment on a case-by-case basis. When non-participating providers do add on excess charges , they cannot charge more than 15% over the Medicare-approved amount. It’s worth noting that providers do not have to charge the maximum 15%; they may only charge 5% or 10% over the Medicare-approved amount.

When you receive a Medicare-covered service at a non-participating provider, you may need to pay the full amount at the time of your service; a claim will need to be submitted to Medicare for you to be reimbursed. Prior to receiving care, your provider should give you an Advanced Beneficiary Notice (ABN) to read and sign. This notice will detail the services you are receiving and their costs.

Non-participating providers should include a CMS-approved unassigned claim statement in the additional information section of your Advanced Beneficiary Notice. This statement will read:

“This supplier doesn’t accept payment from Medicare for the item(s) listed in the table above. If I checked Option 1 above, I am responsible for paying the supplier’s charge for the item(s) directly to the supplier. If Medicare does pay, Medicare will pay me the Medicare-approved amount for the item(s), and this payment to me may be less than the supplier’s charge.”

This statement basically summarizes how excess charges work: Medicare will pay the Medicare-approved amount, but you may end up paying more than that.

Your provider should submit a claim to Medicare for any covered services, however, if they refuse to submit a claim, you can do so yourself by using CMS form 1490S .

Opt-Out Providers: What You Need to Know

Opt-out providers are different than non-participating providers because they completely opt out of Medicare. What does this mean for you? If you receive supplies or services from a provider who opted out of Medicare, Medicare will not pay for any of it (except for emergencies).

Physicians who opt-out of Medicare are even harder to find than non-participating providers. According to a report by KFF.org, only 1.1% of physicians opted out of Medicare in 2023. Of those who opted out, most are physicians in specialty fields such as psychiatry, plastic and reconstructive surgery, and neurology.

How to Find A Doctor Who Accepts Medicare Assignment

Finding a doctor who accepts Medicare patients and accepts Medicare assignment is generally easier than finding a provider who doesn’t accept assignment. As we mentioned above, of all the providers who accept Medicare patients, 98 percent accept assignment.

The easiest way to find a doctor or healthcare provider who accepts Medicare assignment is by visiting Medicare.gov and using their Compare Care Near You tool . When you search for providers in your area, the Care Compare tool will let you know whether a provider is a participating or non-participating provider.

If a provider is part of a group practice that involves multiple providers, then all providers in that group must have the same participation status. As an example, we have three doctors, Dr. Smith, Dr. Jones, and Dr. Shoemaker, who are all part of a group practice called “Health Care LLC”. The group decides to accept Medicare assignment and become a participating provider. Dr. Smith decides he does not want to accept assignment, however, because he is part of the “Health Care LLC” group, he must remain a participating provider.

Using Medicare’s Care Compare tool, you can select a group practice and see their participation status. You can then view all providers who are part of that group. This makes finding doctors who accept assignment even easier.

To ensure you don’t end up paying more out-of-pocket costs than you anticipated, it’s always a good idea to check with your provider if they are a participating Medicare provider. If you have questions regarding Medicare assignment or are having trouble determining whether a provider is a participating provider, you can contact Medicare directly at 1-800-633-4227. If you have questions about excess charges or other Medicare costs and would like to speak with a licensed insurance agent, you can contact us at the number above.

Announcement About Medicare Participation for Calendar Year 2024, Centers for Medicare & Medicaid Services. Accessed January 2024

https://www.cms.gov/files/document/medicare-participation-announcement.pdf

Annual Medicare Participation Announcement, CMS.gov. Accessed January 2024

https://www.cms.gov/medicare-participation

Does Your Provider Accept Medicare as Full Payment? Medicare.gov. Accessed January 2024

https://www.medicare.gov/basics/costs/medicare-costs/provider-accept-Medicare

Kayla Hopkins

Ashlee Zareczny

Medicare Eligibility Requirements
Medicare Enrollment Documents
Apply for Medicare While Working
Guaranteed Issue Rights
Medicare by State
Web Stories
Online Guides
Calculators & Tools

Owned by: Elite Insurance Partners LLC. This website is not connected with the federal government or the federal Medicare program. The purpose of this website is the solicitation of insurance. We do not offer every plan available in your area. Currently we represent 26 organizations which offer 3,740 products in your area. Please contact Medicare.gov or 1-800-MEDICARE or your local State Health Insurance Program to get information on all of your options.

Let us help you find the right Medicare plans today!

Simply enter your zip code below

Practice Areas
Terminology
Entrepreneurship
Medical Billing
Healthcare Conferences

What is Assignment of Benefits in Medical Billing?

doctor sitting at his desk on his laptop

An assignment of benefits is the act of signing documentation authorizing a health insurance company to pay a physician directly. In other words, the insurance company can pay claims without the direct involvement of the patient in the process. There are other situations where AOBs can be helpful, but we’ll focus on their use in relation to medical benefits.

If there isn’t an assignment of benefits agreement in place, the patient would be responsible for paying the other party directly from their own pocket, then filing a claim with their insurance provider to receive reimbursement. This could be time-consuming and costly, especially if the patient has no idea how to file a claim.

The document is typically signed by patients when they undergo medical procedures. The purpose of this form is to assign the responsibility of payment for any future medical bills that may arise after the procedure. It’s important to note that not all procedures require an AOB.

An assignment of benefits agreement might be utilized to pay a medical practitioner the patient didn’t choose, like an anesthesiologist. The patient may have picked a surgeon, but an anesthesiologist assigned on the day of the procedure might issue a separate bill. They’re, in essence, signing that anyone involved in their treatment can receive direct payment from the insurance carrier. It doesn’t have to go through the patient.

This document can also eliminate service fees surrounding processing. As a result, the patient can focus on medical treatment and recovery without being bogged down with the complexities of paying medical bills. The overall intent of an assignment of benefits agreement is to make the process more manageable for the patient, as they don’t need to haggle directly with their insurer.

List of Providers and Services

When the patient signs an AOB agreement, they give a third party right to obtain payment for services the provider performed, and medical billing services are a prime example of where they may sign an AOB agreement.

Ambulance services
Medical insurance claims
Drugs and pharmaceuticals
Diagnostic and clinical lab services
Emergency surgical center services
Dialysis supplies and equipment used in the home
Physician services for Medicare and Medicaid patients

Services of professionals other than a primary care physician, which includes:

Physician assistants
Clinical nurse specialists
Clinical social workers
Clinical psychologists
Certified registered nurse anesthetists

doctor at desk filling out forms on clipboard

Information Commonly Requested on Assignment of Benefits Form:

Signature of patient or person legally responsible
Signature of parent or legal guardian

How AOBs Affect the Medical Practitioner

A medical provider or their administrative staff may feel overwhelmed by the sheer number of forms patients must fill out prior to treatment. Demanding more paperwork from patients may be seen as an added burden on the managerial staff, as well as the patient. However, getting a signed AOB is vital in preserving the interests of everyone involved.

In addition to receiving direct payment from the insurance company without needing to go through the patient, a signed assignment of benefits form will help medical providers appeal denied and underpaid claims. They can ask that payments be made directly to them rather than through the patient. This makes the process more manageable for both the doctors and the patient.

Things to Bear in Mind

The patient gives their rights and benefits to third parties under their current health plan. Depending on the wording in the AOB, their insurer may not be allowed to contact them directly about their claims. In addition, the patient may be unable to negotiate settlements or approve payments on their behalf and enable third parties to endorse checks on behalf of the patient. Finally, when the patient signs an AOB, the insurer may sue the third parties involved in the dispute.

Looking for a qualified medical billing service?

By taking just 1 minute to provide some basic information about your practice, you can get up to 5 pre-screened companies competing for your business.

What Is Cosmetic Dermatology? Your Guide to Treatments, Costs, and More

What is a clia number in medical billing, healthcare revenue cycle management explained, leave a reply.

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

What Is the Assignment of Insurance Benefits?

An assignment of insurance benefits shares the ownership interest of an insurance policy with another party.

Hemera Technologies/AbleStock.com/Getty Images

1. What Is a Life Insurance Assignment?
2. Absolute Assignment of Life Insurance Policies
3. What Is the Collateral Assignment of a Life Insurance Policy?

Assigning insurance benefits is a legal procedure that gives another party permission to receive payments or benefits directly from your insurance company rather than you receiving the benefits yourself. Depending on the arrangement, you may be able to terminate the assignment at will, or be required to keep the arrangement in place until you meet certain conditions.

Health Insurance

When you require medical care, it's important to have health insurance in place to protect your financial well-being. If your health care provider does not have a direct contract with your insurance company, it may require you to fill out an assignment of benefits form allowing it to bill the insurance company directly for your medical treatments. You remain responsible for any deductibles and co-pays, however, and are ultimately responsible for any medical bills.

Income Loan

Whole life insurance policies with accumulating cash values can act as supplementary retirement income planning investments. When you wish to access the cash value in your policy, you can assign your policy to a bank in exchange for a loan. Typically the bank lends you up to a specified percentage of the policy's cash value, and it becomes the primary beneficiary of the death benefit up to and including the outstanding balance of the loan at your death. The advantage of such an arrangement is that the bank loan is not treated as taxable income, unlike a policy withdrawal, and you repay the bank loan with the tax-free death benefit.

Collateral Loan

If you are self-employed and wish to secure a loan for your business, you may be required by your lenders to purchase life insurance as an additional guarantee. Once the insurance is purchased you complete a assignment of benefits, sharing ownership control with the bank. You must pay the insurance premiums and cannot make any decisions affecting the policy without the written consent of the lender. If and when you pay off your business loan, the assignment is terminated and you regain full control of the policy.

Charitable Contribution

Life insurance can be purchased as a means to finance a charitable gift at death. There are several ways to set this up, one of which involves assigning the benefits to the charity immediately after purchase. The assignment is typically irrevocable, as this requires the charity's consent to make any changes to the policy. The advantage of such an assignment is that your premiums are tax-deductible as a charitable contribution. Upon your death, the charity receives the death benefit directly, without the money passing through your estate.

Massachusetts Avenue Surgery Center: Assignment of Insurance Benefits
Feeley and Driscoll, P.C.: Life insurance leads way to charitable contribution

Philippe Lanctot started writing for business trade publications in 1990. He has contributed copy for the "Canadian Insurance Journal" and has been the co-author of text for life insurance company marketing guides. He holds a Bachelor of Science in mathematics from the University of Montreal with a minor in English.

What is a life insurance assignment, absolute assignment of life insurance policies, what is the collateral assignment of a life insurance policy, how do i set up a trust fund with a life insurance policy, how much can i borrow against cash value, is whole-term life insurance with a retirement plan a good idea, how to finance a funeral, can you write off life insurance payments, can life insurance proceeds paid to a beneficiary be forced to pay the deceased's debts, taxation of death benefits paid on a life insurance policy, is life insurance taxed at payout, does life insurance count towards the two million for federal estate tax.

Zacks Research is Reported On:

Zacks Investment Research

is an A+ Rated BBB

Accredited Business.

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1986 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1986-2011 and were examined and attested by Baker Tilly, an independent accounting firm.

Visit performance for information about the performance numbers displayed above.

NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.

What is an Assignment of Benefits?

Small and Medium Business Solutions

This is how most people receive health care in the U.S. This system, known as assignment of benefits or AOB, is now being used with other types of insurance, including auto and homeowners coverage .

What is an assignment of benefits?

How an AOB works

According to Dr. David Berg of Redirect Health, the reason is simple: “Without an AOB in place, the patient themselves would be responsible for paying the cost of their service and would then file a claim with their insurance company for reimbursement.”

Within the guidelines of the specific insurance rules for AOBs in your state, the general steps include:

You and your contractor draw up an AOB clause as part of the contract.
The contract stipulates the exact work that will be completed and all necessary details.
The contractor sends the completed AOB to the insurance company where an adjuster reviews, asks questions, and resolves any discrepancies.
The contractor’s name (or that of an agreed-upon party) is listed to go on the settlement check.

After work is complete and signed off, the insurer will issue the check and the claim will be considered settled.

Example of an assignment of benefits

When would you need to use an assignment of benefits?

An AOB can simplify complicated and costly insurance transactions and allow you to turn these transactions over to trusted experts, thereby avoiding time-consuming negotiations.

Assignment of benefits for health insurance

Assignment of benefits for car owners

Assignment of benefits for homeowners

The fraud factor

The National Association of Insurance Commissioners (NAIC), offers advice for consumers to help avoid AOB fraud and abuse:

File a claim with your insurer before you hire a contractor. This ensures you know what repairs need to be made.
Don’t pay in full upfront. Legitimate contractors do not require it.
Get three estimates before selecting a contractor.
Get a full written contract and read it carefully before signing.
Don’t be pressured into signing an AOB. You are not required to sign an AOB.

Pros and cons of an assignment of benefits

The advantages and disadvantages of an AOB agreement depend largely on the amount and type of protection your state’s insurance laws provide.

Pros of assignment of benefits

With proper safeguards in place to reduce opportunities for fraud, AOBs have the ability to streamline and simplify the insurance claims process.

An AOB frees you from paying for services and waiting for reimbursement from your insurer.
Some people appreciate not needing to negotiate with their insurer.
You are not required to sign an AOB.

Cons of assignment of benefits

As with most contracts, AOBs are a double-edged sword. Be aware of potential traps and ask questions if you are unsure.

Signing an AOB could make you the victim of a scam without knowing it until your insurer refuses to pay.
An AOB doesn’t free you from the ultimate responsibility to pay for services rendered, which could drag you into expensive litigation if things go south.
Any AOB you do sign is legally binding.

The takeaway

By: Jim Probasco

From: Fortune Recommends

Assignment of benefits

Assignment of benefits is a legal agreement where a patient authorizes their healthcare provider to receive direct payment from the insurance company for services rendered.

Boost patient experience and your bottom line by automating patient cost estimates, payer underpayment detection, and contract optimization in one place.

What is Assignment of Benefits?

Assignment of benefits (AOB) is a crucial concept in the healthcare revenue cycle management (RCM) process. It refers to the legal transfer of the patient's rights to receive insurance benefits directly to the healthcare provider. In simpler terms, it allows healthcare providers to receive payment directly from the insurance company, rather than the patient being responsible for paying the provider and then seeking reimbursement from their insurance company.

Understanding Assignment of Benefits

When a patient seeks medical services, they typically have health insurance coverage that helps them pay for the cost of their healthcare. In most cases, the patient is responsible for paying a portion of the bill, known as the copayment or deductible, while the insurance company covers the remaining amount. However, in situations where the patient has assigned their benefits to the healthcare provider, the provider can directly bill the insurance company for the services rendered.

The assignment of benefits is a legal agreement between the patient and the healthcare provider. By signing this agreement, the patient authorizes the healthcare provider to receive payment directly from the insurance company on their behalf. This ensures that the provider receives timely payment for the services provided, reducing the financial burden on the patient.

Difference between Assignment of Benefits and Power of Attorney

While the assignment of benefits may seem similar to a power of attorney (POA) in some respects, they are distinct legal concepts. A power of attorney grants someone the authority to make decisions and act on behalf of another person, including financial matters. On the other hand, an assignment of benefits only transfers the right to receive insurance benefits directly to the healthcare provider.

In healthcare, a power of attorney is typically used in situations where a patient is unable to make decisions about their medical care. It allows a designated individual, known as the healthcare proxy, to make decisions on behalf of the patient. In contrast, an assignment of benefits is used to streamline the payment process between the healthcare provider and the insurance company.

Examples of Assignment of Benefits

To better understand how assignment of benefits works, let's consider a few examples:

Sarah visits her primary care physician for a routine check-up. She has health insurance coverage through her employer. Before the appointment, Sarah signs an assignment of benefits form, authorizing her physician to receive payment directly from her insurance company. After the visit, the physician submits the claim to the insurance company, and they reimburse the physician directly for the covered services.

John undergoes a surgical procedure at a hospital. He has health insurance coverage through a private insurer. Prior to the surgery, John signs an assignment of benefits form, allowing the hospital to receive payment directly from his insurance company. The hospital submits the claim to the insurance company, and they reimburse the hospital for the covered services. John is responsible for paying any copayments or deductibles directly to the hospital.

Mary visits a specialist for a specific medical condition. She has health insurance coverage through a government program. Mary signs an assignment of benefits form, granting the specialist the right to receive payment directly from the government program. The specialist submits the claim to the program, and they reimburse the specialist for the covered services. Mary is responsible for any applicable copayments or deductibles.

In each of these examples, the assignment of benefits allows the healthcare provider to receive payment directly from the insurance company, simplifying the billing and reimbursement process for both the provider and the patient.

Assignment of benefits is a fundamental concept in healthcare revenue cycle management. It enables healthcare providers to receive payment directly from the insurance company, reducing the financial burden on patients and streamlining the billing process. By understanding the assignment of benefits, patients can make informed decisions about their healthcare and ensure that their providers receive timely payment for the services rendered.

Get paid in full by bringing clarity to your revenue cycle

Related terms, total performance score (tps).

Total performance score (TPS) is a metric that quantifies the overall performance of a healthcare revenue cycle management system, providing a comprehensive assessment of its efficiency and effectiveness.

False Claims Act

False Claims Act is a federal law that imposes liability on individuals or entities who knowingly submit false or fraudulent claims for payment to the government.

Subscribe to the

Healthcare Clarified newsletter

Get the latest insights on RCM and healthcare policy in your inbox

Search Search Please fill out this field.
Building Your Business
Business Insurance

Can You Assign Your Insurance Benefits to Someone Else?

Monashee Frantz / Getty Images

Most business insurance policies contain a so-called anti-assignment clause. This clause prohibits policyholders from transferring any of their rights under the policy to someone else. This means that the insured business cannot cede its right to collect claim payments to another party. However, laws in most states permit policyholders to transfer their rights to another party under certain circumstances.

Anti-Assignment Clause

In the standard ISO policies , the anti-assignment clause is located in a separate form called the Common Policy Conditions. These conditions apply to all coverages that are included in the policy. For instance, if a policy includes business auto , general liability , and commercial property coverages, the anti-assignment clause applies to all three coverages.

The clause is entitled Transfer of Your Rights and Duties Under This Policy. It includes the following provision:

Your rights and duties under this policy may not be transferred without our written consent except in the case of death of an individual named insured.

The anti-assignment clause prohibits the named insured from transferring any of its rights or obligations under the policy to someone else without the insurer's permission. The only exception is if the named insured is an individual (sole proprietor) and he or she dies. An assignment is permitted in this case because a sole proprietorship and the individual owner are one and the same. If the individual dies, the business cannot survive unless it is sold to someone else.

An anti-assignment clause is intended to prevent the insurer from unwittingly assuming risks it never intended to take on. Commercial insurers review business insurance applicants carefully. Before they issue policies, underwriters consider the knowledge and experience of a company's owners and managerial staff. If a business is sold to someone else, the new owners may not be as skilled or attentive as the previous ones. From the insurer's perspective, the new owners are an unknown risk.

Post-Loss Assignments Permitted

The anti-assignment clause doesn't distinguish between assignments made before a loss and those made afterward. Even so, courts in most states have allowed policyholders to assign their rights to another party after a loss has occurred. Pre-loss assignments are still prohibited. Here is an example of a post-loss assignment of insurance benefits.

Victor operates a restaurant called Vital Vittles out of a building he owns. Late one January night two water pipes in the building freeze. The pipes subsequently burst, causing considerable water damage to Victor's building. Victor is forced to close his restaurant until the repairs are completed.

Victor hires a water damage contractor called Rapid Restoration to repair the damage to his building. He tells the contractor that he needs the repairs done quickly as he is anxious to reopen his restaurant. The contractor says that the repairs can be expedited if Victor signs over his rights under the policy to Rapid Restoration. The contractor will then proceed with the repairs and negotiate a claim settlement with Vital Vittles' commercial property insurer. Victor agrees to the assignment and the contractor begins the repair work.

While Vital Vittles' commercial property policy contains an anti-assignment clause, Victor has assigned his rights to Rapid Restoration after a loss has occurred. Thus, in most states, Victor's insurer cannot reject the assignment (assuming post-loss assignments are permitted in Victor's state).

Problems With Assignments of Benefits

In recent years, assignment of benefits (AOB) agreements have been problematic in some states, particularly Florida. Unscrupulous contractors have preyed on unsuspecting homeowners and business owners who have suffered water damage . Some contractors work alone while others operate in cahoots with crooked lawyers. In either event, the contractor convinces the policyholder to assign his or her rights under the policy over to the contractor. The contractor then exaggerates the cost of the repairs and collects the inflated amount from the insurer. The policyholder is left with a large claim on his or her loss history. When the policy expires, the insurer may refuse to renew it.

In the previous example, Victor has assigned his rights under the policy to Rapid Restoration. Suppose that Rapid Restoration completes only half of the repair work on Victor's building. The actual cost is $15,000 but the contractor submits a bill to the insurer for $30,000. Alternatively, the contractor never submits a bill but sues the insurer for $30,000. In either case, the insurer may refuse to pay on the basis that the contractor has committed insurance fraud. Victor cannot intervene because he has signed his rights over to the contractor. If the contractor is unsuccessful in its lawsuit against the insurer, it may demand payment from Victor's company.

Avoiding Problems With AOBs

As a business owner, you can avoid problems associated with AOBs and unscrupulous contractors by taking the following steps:

Report any loss or accident directly to your insurer (or your agent or broker ). Notify your insurer immediately. Don't allow a contractor to do the notification on your behalf.
Take photos of the damage.
Don't allow any contractor to begin work until an insurance adjuster has documented the damage
Vet contractors thoroughly before hiring them. Make sure they are properly licensed. If your area has suffered a natural disaster, watch out for construction scams.
Don't sign an AOB unless you have reviewed it carefully. If you don't understand it, ask your agent, insurer, or attorney for assistance.
If your contractor won't do any work until you've signed an AOB, find another contractor.

AOBs in Health Insurance

Assignment of benefit agreements are common in health insurance. Patients are often asked to agree to such clauses before they receive treatment from a physician, hospital, or another healthcare provider. The assignment of benefits clause transfers a patient's right to collect benefits under his or her health policy to the provider. By signing the document, the patent agrees that payments will be made directly to the provider for the services rendered. The clause states that the patient is ultimately responsible for the charges if the insurer fails to pay.

Once the treatment has been performed, the provider submits the AOB along with a claim to the patient's health insurer. The insurer pays the provider for services rendered to the patient.

Assignment Of Benefits

What does assignment of benefits mean.

Assignment of benefits (AOB) is the official way an insured person asks their insurance company to pay a professional or facility for services rendered.

Insuranceopedia Explains Assignment Of Benefits

Assignment of benefits is a document that directs payment to a third party at the insured’s request. It becomes legitimate once both the insured party and their insurer have signed the AOB form. AOB is used in a number of insurance contexts, such as paying physicians or clinics through health insurance or paying contractors for repairs through a homeowner’s insurance policy.

Usually, AOBs are issued when the third party pursues it in the hopes that payment from the insurance company will be more certain and delivered more quickly than it would be from the insured.

Related Definitions

Rental value insurance, change of occupation provision, force-placed insurance, guaranteed asset protection insurance, insurance to value, loss report, no benefit to bailee provision, guaranteed renewable contract, related terms, certificate of coverage, third party, medical payments insurance, related articles, how to lower your health insurance rates, 10 tips for choosing the right health insurance policy, 10 things you need to know about health insurance in the united states, the ultimate guide to auto insurance, the future of insurtech: how technology is transforming the insurance industry, inside the details of auto transport insurance: an expert interview, trending articles.

Does your provider accept Medicare as full payment?

You can get the lowest cost if your doctor or other health care provider accepts the Medicare-approved amount as full payment for a covered service. This is called “accepting assignment.” If a provider accepts assignment, it’s for all Medicare-covered Part A and Part B services.

Using a provider that accepts assignment

Most doctors, providers, and suppliers accept assignment, but always check to make sure that yours do.

If your doctor, provider, or supplier accepts assignment:

Your out-of-pocket costs may be less.
They agree to charge you only the Medicare deductible and coinsurance amount, and usually wait for Medicare to pay its share before asking you to pay your share.
They have to submit your claim directly to Medicare and can't charge you for submitting the claim.

How does assignment impact my drug coverage?

Using a provider that doesn't accept Medicare as full payment

Some providers who don’t accept assignment still choose to accept the Medicare-approved amount for services on a case-by-case basis. These providers are called "non-participating."

If your doctor, provider, or supplier doesn't accept assignment:

You might have to pay the full amount at the time of service.
They should submit a claim to Medicare for any Medicare-covered services they give you, and they can’t charge you for submitting a claim. If they refuse to submit a Medicare claim, you can submit your own claim to Medicare. Get the Medicare claim form .
They can charge up to 15% over the Medicare-approved amount for a service, but no more than that. This is called "the limiting charge."

Does the limiting charge apply to all Medicare-covered services?

Using a provider that "opts-out" of Medicare

Doctors and other providers who don’t want to work with the Medicare program may "opt out" of Medicare.
Medicare won’t pay for items or services you get from provider that opts out, except in emergencies.
Providers opt out for a minimum of 2 years. Every 2 years, the provider can choose to keep their opt-out status, accept Medicare-approved amounts on a case-by-case basis ("non-participating"), or accept assignment.

Find providers that opted out of Medicare.

Private contracts with doctors or providers who opt out

If you choose to get services from an opt-out doctor or provider you may need to pay upfront, or set up a payment plan with the provider through a private contract.
Medicare won’t pay for any service you get from this doctor, even if it’s a Medicare-covered service.

What are the rules for private contracts?

You may want to contact your State Health Insurance Assistance Program (SHIP) for help before signing a private contract with any doctor or other health care provider.

What do you want to do next?

Next step: Get help with costs
Take action: Find a provider
Get details: How to get Medicare services

Search NAIC

Recommended.

Back to Newsroom

Consumer Insight

Sept. 13, 2023

Assignment of Benefits: Consumer Beware

You've just survived a severe storm, or a tornado and you've experienced some extensive damage to your home that requires repairs, including the roof. Your contractor is now asking for your permission to speak with your insurance company using an Assignment of Benefits. Before you sign, read the fine print. Otherwise, you may inadvertently sign over your benefits and any extra money you’re owed as part of your claim settlement.

The National Association of Insurance Commissioners (NAIC) offers information to help you better understand insurance, your risk and what to do in the event you need repairs after significant storm damage.

Be cautious about signing an Assignment of Benefits. An Assignment of Benefits, or an AOB, is an agreement signed by a policyholder that allows a third party—such as a water extraction company, a roofer or a plumber—to act on behalf of the insured and seek direct payment from the insurance company. An AOB can be a useful tool for getting repairs done, as it allows the repair company to deal directly with your insurance company when negotiating repairs and issuing payment directly to the repair company. However, an AOB is a legal contract, so you need to understand what rights you are signing away and you need to be sure the repair company is trustworthy.

With an Assignment of Benefits, the third party, like a roofing company or plumber, files your claim, makes the repair decision and collects insurance payments without your involvement.
Once you have signed an AOB, the insurer only communicates with the third party and the other party can sue your insurer and you can lose your right to mediation.
It's possible the third party may demand a higher claim payment than the insurer offers and then sue the insurer when it denies your claim.
You are not required to sign an AOB to have repairs completed. You can file a claim directly with your insurance company, which allows you to maintain control of the rights and benefits provided by your policy in resolving the claim.

Be on alert for fraud. Home repair fraud is common after a natural disaster. Contractors often come into disaster-struck regions looking to make quick money by taking advantage of victims.

It is a good idea to do business with local or trusted companies. Ask friends and family for references.
Your insurer may also have recommendations or a list of preferred contractors.
Always get more than one bid on work projects. Your adjuster may want to review estimates before you make repairs.

Immediately after the disaster, have an accurate account of the damage for your insurance company when you file a claim.

Before removing any debris or belongings, document all losses.
Take photos or video and make a list of the damages and lost items.
Save damaged items if possible so your insurer can inspect them, some insurance companies may have this as a requirement in their policy.

Most insurance companies have a time requirement for reporting a claim, so contact your agent or company as soon as possible. Your state insurance department can help you find contact information for your insurance company, if you cannot find it.

Insurance company officials can help you determine what damages are covered, start your claim and even issue a check to start the recovery process.
When reporting losses, you will need insurance information, current contact information and a home inventory or list of damaged and lost property . If you do not have a list, the adjuster will give you some time to make one. Ask the adjuster how much time you have to submit this inventory list. The NAIC Post Disaster Claims Guide has details on what you can do if you do not have a home inventory list.

After you report damage to your insurance company, they will send a claims adjuster to assess the damage at no cost to you . An adjuster from your insurance company will walk through and around your home to inspect damaged items and temporary repairs you may have made.

A public adjuster is different from an adjuster from your insurance company and has no ties to the insurance company.
They estimate the damage to your home and property, review your insurance coverage, and negotiate a settlement of the insurance claim for you.
Many states require public adjusters to be licensed. Some states prohibit public adjusters from negotiating insurance claims for you. In those states, only a licensed attorney can represent you.
You have to pay a public adjuster.
The NAIC Post Disaster Claims Guide has information on the different types of adjusters.

Once the adjuster has completed an assessment, they will provide documentation of the loss to your insurer to determine your claims settlement. When it comes to getting paid, you may receive more than one check. If the damage is severe or you are displaced from your home, the first check may be an emergency advance. Other payments may be for the contents of your home, other personal property, and structural damages. Please note that if there is a mortgage on your home, the payment for structural damage may be payable to you and your mortgage lender. Lenders may put that money into an escrow account and pay for repairs as the work is completed.

More information. States have rules governing how insurance companies handle claims. If you think that your insurer is not responding in a timely manner or completing a reasonable investigation of your claim, contact your state insurance department .

About the National Association of Insurance Commissioners

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.

Home » Coverage Exclusions » Assignment of Benefits

Assignment of Benefits for Homeowners

How It Works
Using Your AOB
Pros & Cons
Safe & Secure
Watch Out for Abuse
Frequently Asked Questions

An assignment of benefits (AOB) is a contractual agreement that enables a third party to access insurance benefits on behalf of the policyholder.[1] When the policyholder signs an AOB agreement, it grants the third party the authority to initiate an insurance claim and receive reimbursement directly from the insurance company.

Assignment of benefits for homeowners means that any contractors , plumbers, or other professionals who perform work to repair your home or property after a claim can work with your insurance provider directly to get compensated. You step aside as the middleman, and they work together.

While AOB can work with most types of insurance, not every insurance company will allow it. The party performing the work (the insurance claimant) and your insurance company must both agree to the process.

As the policyholder, you must willingly sign an AOB agreement, giving explicit consent for a third party to access their insurance benefits.
AOBs may make things easier for both you as the policyholder and for the service provider.
The service provider takes care of filing the claim, helps the homeowner decide on repairs, and gets paid by the insurance company, relieving you (the policyholder) of having to manage these details.

How Do Assignment of Benefits Work?

AOB is a straightforward process that simplifies insurance billing for both service providers and policyholders. Here is how an AOB works.

Coverage Verified

Before hiring a service provider, the policyholder must make sure that the service is covered by their policy by checking in with the insurance provider. Homeowners insurance pays for the cost of damages or loss due to a covered event, as outlined in the policy.

Mutual Agreement

The policyholder and the service provider agree to utilize an AOB form.[2] This agreement authorizes the service provider to handle direct billing to the insurance company for the services provided.

Billing Submission

With the AOB form in place, the service provider submits all relevant documentation, including invoices and service records, to the insurance company for payment. In many cases, this includes the initial claim with documentation of the damage and an explanation/proof of how it happened.

Claim Evaluation

The insurance company thoroughly reviews the submitted documents to verify that the damage itself and the provided services are indeed covered under the policy terms and that the contractor provided those same services.

Direct Payment

If the services are eligible and covered by the insurance policy, the insurance company promptly issues payment directly to the service provider. This payment aligns with the agreed-upon costs as outlined in the insurance policy.

Policyholder’s Responsibility

Generally, the policyholder is only responsible for any deductibles, copays, or out-of-pocket expenses specified in their insurance policy.[3] They are relieved of the responsibility of managing the billing process or handling reimbursement paperwork.

Service Rendered

The policyholder receives necessary services covered by their insurance policy, such as medical treatment or repairs.

Example of an Assignment of Benefits

A hurricane hit Rachel’s town, severely damaging the shed where she keeps her tools and lawn equipment. The shed is covered under her home insurance policy, and she files a claim with the insurance provider quickly with photographs and documents that show the damage and provide proof of the value and potential cost to rebuild. The insurance provider approves the replacement of the shed.

To streamline the process of paying the contractor, Rachel signs an AOB allowing the contractor to bill the insurance provider rather than billing her. This means that if there are any disputes about the costs of materials, timeliness of payment, or any other issues, those will happen between the insurance company and the contractor, and Rachel will not be required to step in.

Additionally, rather than having to pay the contractor out of pocket and wait for a reimbursement check from the provider, the contractor will be paid directly by the insurance company, so Rachel doesn’t have to pay the cost of the shed replacement.

When Would You Use Your Assignment of Benefits?

AOBs can be useful in various situations:

Assign benefits to contractors for property damage repairs, simplifying the insurance claim process. It can often expedite the process and help claimants to get paid faster.
AOBs can help in emergencies, ensuring timely payment without paperwork hassles. This can be particularly helpful during already high-stress times.
Consider AOBs for complex claims with multiple providers or extensive paperwork. You’ll have less to manage if the parties work together directly.
You can use an AOB for a range of professionals relating to a homeowners insurance claim, such as plumbers, roofers, window repair specialists, landscapers, carpenters, and restoration specialists.

Pros & Cons of Using Assignment of Benefits



It simplifies the claims process, reducing paperwork for policyholders.	Policyholders may have limited control over claims and disputes.
Service providers can bill insurance companies directly, ensuring timely payment.	With AOBs, the insurance company may not agree to cover the full cost, and the contractor may sue the insurance company. You may be dragged into litigation later. The company may also deny the claim altogether.
It allows policyholders to access needed services, even when funds are limited.	Your lack of visibility into final bills may mean you’re surprised when your insurance premiums are raised.
	There is a possibility that the assignee can pocket any additional funds you may be due as part of the settlement.

Making Sure Your AOB Is Safe & Secure

To ensure the safety of an AOB:

Check the reputation of the service provider and seek multiple quotes for services.[4]
Carefully examine the AOB terms, ensuring clarity and alignment with your insurance policy.
Beware of high-pressure tactics and take your time to decide.
Confirm the provider’s licensing and insurance.
Get multiple estimates in writing for the needed work.
Consult an attorney or insurance advisor if you have concerns.
Keep records of communication and contracts.
Inform your insurer about the AOB and their requirements.
After services, check the results against AOB terms and your satisfaction.
Make sure the AOB has appropriate cancellation provisions in place so that you can rescind the agreement in writing in certain circumstances.

Assignment of Benefits Being Abused: What Are My Options?

While an AOB can offer convenience, the process may be susceptible to misuse by those who would take advantage of the insurance company and overcharge for services or claim to have provided services that they did not actually perform. Lisa Koosis, a former claims specialist, warns, “Be watchful for AOB scams, particularly after natural disasters such as earthquakes or hurricanes. Red flags include contractors who offer something for nothing, make exaggerated claims of damage or present broadly worded contracts.”

If you suspect AOB abuse or fraud, consider these options.

Contact Your Insurer

If you suspect AOB abuse, promptly reach out to your insurance company. Express your concerns and provide any evidence you have to support them. Insurers have units dedicated to investigating potential fraud or AOB misuse.

Report Fraud

If you suspect fraudulent activities, report the issue to your state’s insurance fraud bureau or department, which investigates such cases and takes legal action when appropriate. However, fraud is generally difficult to prove.

Seek Legal Counsel

Get advice from an attorney who is experienced in insurance claims to navigate your specific situation. Be aware that pursuing legal action can be costly and lengthy, so it generally won’t be your first course of action. But if the process gets complicated, it’s helpful to have a legal professional on your side. Lisa Koosis, a former claims specialist, says, “If you need legal assistance but can’t afford it, try calling your local law school. Many of them offer free clinics where you can get a consultation and, sometimes, pro bono representation.”

Know About Potential Litigation

If the contractor or service provider isn’t paid by your insurance company, they might pursue legal action against your provider, leading to a dispute that may require your action or response.

Frequently Asked Questions About Assignment of Benefits (AOB) for Homeowners

We have compiled some of the most frequently asked questions about AOBs and how to use them most effectively, so you can make the most informed decisions about your situation.

An assignment of benefits, also referred to as an AOB, in homeowners insurance is when you allow a contractor or service provider to take over your insurance claim process. They deal directly with the insurance company for tasks like repairs or damage assessments and get paid directly. This can simplify and expedite the process because the service provider is dealing directly with your insurance company without you serving as the intermediary.

All parties must agree to the process. As the policyholder, you’ll sign off on the process, and both the services provider and your insurance company must also agree to the process.

Using an AOB can be beneficial if it is used wisely and for the purposes of working with reputable service providers. It streamlines claims, but it also comes with potential risks like fraud. Proceed with caution and agree to an AOB only if you feel confident that you are working with trusted parties. Also, be aware that not all insurance companies allow AOBs. Some states prohibit AOBs for certain types of work. Consult your insurance provider to ensure they do before proceeding.

In recent years, AOBs have been the target of fraud. Some service providers have inflated their invoices, billing for work that wasn’t performed. In some cases, claimants sue the insurance company, resulting in higher premiums for the policyholder down the road.

An AOB simplifies the insurance claims process for policyholders, letting service providers handle the work of getting paid for their services. This reduces responsibility and stress for policyholders and can often serve the best interests of all parties.

An AOB on a claim form is a line item where you authorize a service provider to receive insurance benefits for a specific claim. It lets that provider directly bill and get paid by the insurance company, simplifying the process for you. Make sure to understand the terms before signing it.[2] In some cases, it could mean you are responsible for any fees billed by your service provider if your insurance company doesn’t pay the full amount.

The Do’s & Don’ts of Submitting a Homeowners Insurance Claim
How Long Will My Homeowners Insurance Claim Take?
How to File a Homeowners Insurance Claim
How to Document Property Damage for Your Claim
How to Speed Up Your Homeowners Insurance Claim
Insurance Claims & Appeals

Post Disaster Claims Guide . National Association of Insurance Commissioners.

Assignment of Benefits . Department of Health and Human Services – North Dakota.

Understanding Dental Assignment of Benefits . West Virginia Offices of the Insurance Commissioner.

Assignment of Benefits: Consumer Beware . (April 2020). National Association of Insurance Commissioners.

Caring ‣ Urgent ‣ Aggressive

Call For A Free Legal Consultation: (201) 261-1700
Physician Reimbursement
PIP / No-Fault Arbitration
Workers’ Compensation Recovery
Hospital Reimbursement
ERISA Litigation Claim Attorneys
Healthcare Arbitration
Bicycle Accident
Brain Injury
Bus Accident
Car Accident
Construction Accident
Hit and Run
Motorcycle Accident
Negligent Supervision
Nursing Home Negligence
Pedestrian Accident
Slip and Fall
Truck Accident
Train Accident
Wrongful Death
Workers Compensation
Business Disputes
Business Justice Attorneys
Employment Counseling and Litigation
Shareholder/Partner Issues
Shareholder Derivative Actions
Business Dissolutions
Business Transactions
Buying/Selling a Business
Corporate Entity Formation
Director and Officers Duties
Executive Compensation
Negotiating Vendor Agreements
Regulatory and Statutory Compliance
Age Discrimination
Disability Discrimination
Gender Identity Discrimination
Race Discrimination
Religious Discrimination
Sex Discrimination
Appellate Law
Child Custody
Child Custody College Expenses
Child Support
Divorce for Business Owners
Divorce Mediation
Domestic Violence
Prenuptial Agreements
Property Distribution
Understanding The Divorce Process
Auto Insurance/Property Damage
All-risks Property Insurance
Commercial General Liability (CGL) Insurance
Disability Insurance
Health Insurance
Insurance Agent/Broker Negligence
Life Insurance
Long-term Care Insurance
Marine/Boat Insurance
Wind & Flood Property Insurance
Commercial Purchase
Commercial Sales
Commercial Lease Agreement
First-Time Home Buyer
Lease Agreements
Real Estate Closing
Refinancing
Residential Purchases
Residential Sales
Title Review
Estate Planning
Estate Planning for Business Owners
Healthcare Directives
Powers of Attorney
Trust Drafting
Will Contest
Will Drafting
Sean Callagy Esq
The Callagy Law Team
Testimonials
Join Our Team
Message of Empathy
Business Law
Commercial Litigation
News & Events
Medical Revenue Recovery
Personal Injury
Free Legal Guides
Paramus, NJ Office
New York, NY Office
Phoenix, AZ Office
East Hanover, NJ Office

Call For A Free Legal Consultation

(201) 261 - 1700

Insurance claims, why do nj medical providers need the patient to sign an assignment of benefits, callagy law: medical provider attorneys.

Our firm represents medical providers in a variety of contexts – Workers’ Compensation, Personal Injury Protection (PIP), and Commercial Insurance (Major Medical) – and obtaining an Assignment of Benefits is crucial in litigating these matters. An Assignment of Benefits is essential for a medical provider – whether the physician, facility, or ancillary service provider – to have a right to payment from the Insurance Carrier or Third-Party Administrator (TPA).

A medical provider or the administrative staff for the medical provider may feel overwhelmed by the number of forms that patients have to fill out prior to treatment. For instance, there are HIPPA release forms, as required by the Health Insurance Portability and Accountability Act, which authorizes the use or disclosure of protected health information, and intake forms requesting medical history, insurance coverage information, and general patient information. Requiring more paperwork from the patients may be viewed as an additional burden placed on the administrative staff, as well as a burden on the patient receiving the treatment. However, these documents, in addition to obtaining a signed Assignment of Benefits, are a vital in protecting the interests of the treating medical provider and the patient.

How Does An Assignment of Benefits Affect a Medical Provider ?

By signing an Assignment of Benefits (AOB), a patient is authorizing the Insurance Carrier or Third-Party Administrator to make health insurance payments directly to the treating medical provider. Essentially, the patient is “assigning” his or her right to receive the payment for the medical benefits. While medical providers benefit tremendously from having payments made directly to them, instead of the patient, from the Insurance Carrier or Third-Party Administrator, a signed Assignment of Benefits will also medical providers appeal denials and underpayments from the Insurance Carrier or Third-Party Administrator.

For example, a patient may seek treatment from a medical provider who is not in network with their health insurance plan. These medical providers may also be referred to as a non-participating provider, a non-network provider, or an out of network provider. Essentially, this designation means that there is no contract in place between the medical provider and the Insurance Carrier or Third-Party Administrator for agreed upon, negotiated rates for services rendered. Therefore, the out of network medical provider has an expectation that payments for the treatment rendered will be made at their actual, billed charges. By having a signed Assignment of Benefits form, a medical provider may submit the Assignment of Benefits with the claim and request that payment be made directly to the medical provider, instead of having checks go to the patient. This provides a convenience for both the medical provider and the patient.

Additionally, if the out of network medical provider is paid less than the actual, billed charges, the medical provider will likely want to challenge the payment directly with the Insurance Carrier or Third-Party Administrator. By having an Assignment of Benefits signed by the Patient, the out of network medical provider may rely on the Assignment of Benefits to appeal the denial or underpayment. While having a signed Assignment of Benefits does not guarantee an out of network medical provider will have standing to file a litigation matter to recover the underpaid reimbursement from the Insurance Carrier, the Assignment of Benefits could be sufficient under the terms of certain health plans. An attorney who is experienced in healthcare law and medical revenue recovery can review the terms of the health insurance plan and provide guidance to the medical provider as to what, if any, additional documentation may be required to pursue recovery in a litigation matter.

Because the use of an Assignment of Benefits, containing the most effective language, is such an important element to a medical provider’s financial interest in collecting payment from an Insurance Carrier or Third-Party Administrator and, possibly, challenging improper payments, a medical provider may want to have an attorney experienced with medical revenue recovery review the Assignment of Benefits. For more information or to consult with an attorney, contact Callagy Law today .

In your service,

Tamara Kotsev, Esq.

Attorney, Medical Revenue Recovery

Wind & Flood Property Insurance
FREE LEGAL GUIDES

Today's news
Reviews and deals
Climate change
2024 election
Fall allergies
Health news
Mental health
Sexual health
Family health
So mini ways
Unapologetically
Buying guides

Entertainment

How to Watch
My Portfolio
Latest News
Stock Market
Biden Economy
Stocks: Most Actives
Stocks: Gainers
Stocks: Losers
Trending Tickers
World Indices
US Treasury Bonds
Top Mutual Funds
Highest Open Interest
Highest Implied Volatility
Stock Comparison
Advanced Charts
Currency Converter
Basic Materials
Communication Services
Consumer Cyclical
Consumer Defensive
Financial Services
Industrials
Real Estate
Mutual Funds
Credit Cards
Balance Transfer Cards
Cash-back Cards
Rewards Cards
Travel Cards
Credit Card Offers
Best Free Checking
Student Loans
Personal Loans
Car Insurance
Mortgage Refinancing
Mortgage Calculator
Morning Brief
Market Domination
Market Domination Overtime
Asking for a Trend
Opening Bid
Stocks in Translation
Lead This Way
Good Buy or Goodbye?
Financial Freestyle
Capitol Gains
Fantasy football
Pro Pick 'Em
College Pick 'Em
Fantasy baseball
Fantasy hockey
Fantasy basketball
Download the app
Daily fantasy
Scores and schedules
GameChannel
World Baseball Classic
Premier League
CONCACAF League
Champions League
Motorsports
Horse racing
Newsletters

New on Yahoo

Privacy Dashboard

Yahoo Finance

What is an assignment of benefits.

This is how most people receive health care in the U.S. This system, known as assignment of benefits or AOB, is now being used with other types of insurance, including auto and homeowners coverage .

How an AOB works

Because AOBs are common in health care, you probably don’t think twice about signing a piece of paper that says "assignment of benefits" across the top. But once you sign it, you’re likely turning over your right to deal with your insurance company regarding service from that provider. Why would you do this?

According to Dr. David Berg of Redirect Health, the reason is simple: “Without an AOB in place, the patient themselves would be responsible for paying the cost of their service and would then file a claim with their insurance company for reimbursement.”

Within the guidelines of the specific insurance rules for AOBs in your state, the general steps include:

You and your contractor draw up an AOB clause as part of the contract.

The contract stipulates the exact work that will be completed and all necessary details.

The contractor sends the completed AOB to the insurance company where an adjuster reviews, asks questions, and resolves any discrepancies.

The contractor’s name (or that of an agreed-upon party) is listed to go on the settlement check.

After work is complete and signed off, the insurer will issue the check and the claim will be considered settled.

Example of an assignment of benefits

When would you need to use an assignment of benefits?

An AOB can simplify complicated and costly insurance transactions and allow you to turn these transactions over to trusted experts, thereby avoiding time-consuming negotiations.

Assignment of benefits for health insurance

Assignment of benefits for car owners

Assignment of benefits for homeowners

The fraud factor

The National Association of Insurance Commissioners (NAIC), offers advice for consumers to help avoid AOB fraud and abuse:

File a claim with your insurer before you hire a contractor. This ensures you know what repairs need to be made.

Don’t pay in full upfront. Legitimate contractors do not require it.

Get three estimates before selecting a contractor.

Get a full written contract and read it carefully before signing.

Don’t be pressured into signing an AOB. You are not required to sign an AOB.

Pros and cons of an assignment of benefits

The advantages and disadvantages of an AOB agreement depend largely on the amount and type of protection your state’s insurance laws provide.

Pros of assignment of benefits

With proper safeguards in place to reduce opportunities for fraud, AOBs have the ability to streamline and simplify the insurance claims process.

An AOB frees you from paying for services and waiting for reimbursement from your insurer.

Some people appreciate not needing to negotiate with their insurer.

You are not required to sign an AOB.

Cons of assignment of benefits

As with most contracts, AOBs are a double-edged sword. Be aware of potential traps and ask questions if you are unsure.

Signing an AOB could make you the victim of a scam without knowing it until your insurer refuses to pay.

An AOB doesn’t free you from the ultimate responsibility to pay for services rendered, which could drag you into expensive litigation if things go south.

Any AOB you do sign is legally binding.

The takeaway

This story was originally featured on Fortune.com

INSIGHT: An Ounce of Prevention—The Importance of Early Review of Assignment of Benefits and Powers of Attorney

By Anthony P. La Rocco, George P. Barbatsuly, Stacey A. Hyman, and Alyssa F. Conn

Introduction

One of the most frequently litigated issues in reimbursement cases brought by in- and out-of-network healthcare providers against insurers is provider standing, or a provider’s right to file a lawsuit to recover for services it provided to its patients. This is because the health insurance industry bases the rights and responsibilities that one party owes to another on contract law. While network contracts often dictate that insurers pay in-network providers directly for services, providers who do not participate in the networks have no independent legal right to payment from the insurer as such providers do not share a contractual relationship with the plan.

Accordingly, these providers must ensure that patients assign their rights to benefits under the health insurance plan to the non-participating provider via an assignment of benefits (“AOB”). Under a valid AOB, the provider “steps into the shoes” of the patient with respect to the contract between the patient and the insurer and may pursue the same benefits that the patient would have been able to pursue him or herself. Without a valid AOB, courts have been clear that the provider has no legal standing to sue the health insurer for payment.

Additionally, participating providers should also obtain and maintain irrevocable AOBs from their patients, despite network contractual language directing payment. Possessing a valid AOB is often a legal prerequisite to submitting a claim, even under the participation agreement, and participation status may change. Moreover, providers may not be participating with all insurers and assignments provide an alternative basis for recovery.

However, the road to recovery on claims is not as simple as merely executing an AOB: insurers frequently challenge the scope of AOBs, requiring courts to analyze them and determine whether the language sufficiently confers standing on the provider to assert a claim. The case law on assignments is, therefore, constantly evolving. The following article explores some of the common issues surrounding crafting and obtaining valid AOBs from patients as well as alternative avenues to survive a standing challenge where plans contain anti-assignment clauses.

What Kind of Language Should the Assignment of Benefits Contain?

An AOB should be “broadly specific”: It should be broad enough to cover all conceivable rights and claims the provider could bring under the plan, but specific enough in that it enumerates the rights in order to survive challenges of overbreadth. These enumerated rights should include, but are not limited to: the right to appeal, the right to request plan documents, the right to pursue claims for benefits, and the right to pursue claims for equitable relief/breaches of fiduciary duties.

The below examples provide AOB language ranked in order from least likely to confer standing to most likely.

Least Likely to Confer Standing : “I authorize insurance payments to be made to [PROVIDER] for services provided at [PROVIDER’S FACILITY].”

This AOB simply authorizes payments to be made, but does not give the provider any right to pursue payment or other remedies. Therefore, this language would likely be insufficient to confer legal standing.

Improved language : “I authorize [PROVIDER] to appeal to my insurance company on my behalf . . . . I hereby assign to [PROVIDER] all payments for medical services rendered to myself or my dependents.”

This language would, at least, give the provider the right to sue for payment under ERISA Section 502(a). However, the language is still lacking as it does not give the provider the right to pursue claims for equitable relief or for breaches of fiduciary duties.

An example of even better, (albeit not perfect) language : “I voluntarily consent to the collection and testing of my specimen, and all future testing, performed by [the Laboratories] or [their] affiliated laboratories unless I give written notice that I have revoked my consent. I authorize my insurance company to pay and mail directly to [the Laboratories] or [their] affiliated laboratories all medical benefits for payment of services rendered. I also authorize [the Laboratories] or [their] affiliated laboratories to endorse any checks received on my behalf for payment of services provided. I hereby irrevocably assign to [the Laboratories] or [their] affiliated laboratories all benefits under any policy of insurance, indemnity agreement, or any collateral source as defined by statute for services provided. This assignment includes all rights to collect benefits directly from my insurance company and all rights to proceed against my insurance company in any action, including legal suit, if for any reason my insurance company fails to make payment of benefits due. This assignment also includes all rights to recover attorney’s fees and costs for such action brought by the provider as my assignee.

The language here is “broadly specific” in that it enumerates with specificity a myriad of rights the provider seeks to have the patient assign. One federal appeals court found that similar assignment language clearly applied to claims against fully-insured health insurance plans, and at least arguably applied to self-funded plans. The court sent the case back to the trial court for further discovery on whether this language applied to self-funded plans. Health care providers can remove this uncertainty up front by having their assignment of benefit forms specifically refer to self-funded plans.

When Should the Provider Require the Assignment to Be Executed?

The best time to have a patient execute an assignment of benefits is at or before the time that services are provided. This is because it is often difficult to track down patients later when a provider must submit a large volume of claims that have gone unpaid. Ideally, these forms are executed together with other intake forms, such as consent for treatment and privacy policies/releases.

If the AOB is not obtained prior to the services, courts will still generally permit assignments that are executed after treatment, at least absent a showing of prejudice to the insurer. Furthermore, although logistical challenges may sometimes ensue where a patient is incapacitated or deceased, courts have upheld the validity of AOBs executed by spouses of such patients.

Navigating Anti-Assignment Provisions in Plans

Some patient plans contain anti-assignment language that prohibits the patient from assigning his or her benefits. This language is a challenge to a provider’s ability to establish standing. Courts are however, split on the issue. Some courts hold that an unambiguous anti-assignment clause is enforceable and can invalidate a patient’s assignment. In these cases, the courts have focused on the freedom of contracting parties.

Other courts hold that an anti-assignment clause is not, in and of itself, dispositive of whether a provider has standing. Anti-assignment clauses are subject to traditional contract defenses, such as fraud, misrepresentation, and unconscionability. For example, if a clause is buried in illegible “fine print” or if it was plainly neither intended nor likely to be read by the other party, those circumstances might support an inference of fraud. Other considerations include: ambiguity in the clause, the scope of the clause, course of dealing, and waiver or estoppel arguments.

An example of anti-assignment language that is completely prohibitory would be: “The benefits of the Contract or Certificate are personal to the Subscriber and are not assignable by the Subscriber in whole or in part to a Non-Member hospital or provider, or to any other person or entity.”

Another example of language that permits assignment only with consent would be: “You may not assign your Benefits under the Plan to a non-Network provider without our consent.”

Providers may, however, still recover in circumstances where the plans contain valid anti-assignment provisions. Recently, for example, the Third Circuit, in American Orthopedic & Sports Med. v. Indep. Blue Cross Blue Shield , 2018 BL 173478 (3d Cir., No. 17-1663, 5/16/18), recognized an alternative basis under which health care providers may obtain standing to sue in federal court. Where a patient grants a valid power of attorney to a health care provider, the Third Circuit has now recognized that a health care provider may pursue a claim for reimbursement on the patient’s behalf, even if the ERISA plan contains a valid and enforceable anti-assignment clause. The court explained that, whereas a plan can limit a beneficiary’s ability to assign claims as a matter of contract law, an anti-assignment clause does not prevent the beneficiary from assigning the health care provider to act as the beneficiary’s agent, any more than it would strip the beneficiary of his or her own interest in the claim.

In sum, while there is no “one size fits all” approach, a simple direction of payment often does not survive scrutiny and will likely be challenged by insurers. Thus, prudent providers will want to work with experienced healthcare counsel to craft assignment language to encompass all of the patient’s rights under the plan and, if applicable, take advantage of the Third Circuit alternative basis for standing by including language that creates a valid power of attorney.

Anthony P. La Rocco is the Managing Partner of K&L Gates’ Newark office. He leads a national health care team involved in significant reimbursement litigation matters on behalf of health care providers against various insurance companies’ health benefits plans and their third party administrators related to under-payment and non-payment of claims for a variety of covered medical testing procedures conducted across the United States. Tony can be reached at [email protected] .

George P. Barbatsuly is a Partner in K&L Gates’ Newark office. His health care and ERISA disputes experience includes representing health care providers in disputes with payer insurance companies, health benefits plans, and third party administrators. George can be reached at [email protected] .

Stacey A. Hyman is an Associate in K&L Gates’ Newark office. She focuses her practice on commercial disputes and insurance coverage, specifically insurance reimbursement recovery. Stacey can be reached at [email protected] .

Alyssa F. Conn is an Associate in K&L Gates’ Newark office. She focuses her practice on a range of complex commercial litigation and insurance coverage disputes in federal and state courts, including healthcare and ERISA disputes. Alyssa can be reached at [email protected] .

Learn more about Bloomberg Law or Log In to keep reading:

Learn about bloomberg law.

AI-powered legal analytics, workflow tools and premium legal & business news.

Already a subscriber?

Type 2 Diabetes
Heart Disease
Digestive Health
Multiple Sclerosis
Diet & Nutrition
Supplements
Health Insurance
Public Health
Patient Rights
Caregivers & Loved Ones
End of Life Concerns
Health News
Thyroid Test Analyzer
Doctor Discussion Guides
Hemoglobin A1c Test Analyzer
Lipid Test Analyzer
Complete Blood Count (CBC) Analyzer
What to Buy
Editorial Process
Meet Our Medical Expert Board

Balance Billing in Health Insurance

How It Works
When It Happens
What to Do If You Get a Bill
If You Know in Advance

Balance billing happens after you’ve paid your deductible , coinsurance or copayment and your insurance company has also paid everything it’s obligated to pay toward your medical bill. If there is still a balance owed on that bill and the healthcare provider or hospital expects you to pay that balance, you’re being balance billed.

This article will explain how balance billing works, and the rules designed to protect consumers from some instances of balance billing.

Is Balance Billing Legal or Not?

Sometimes it’s legal, and sometimes it isn’t; it depends on the circumstances.

Balance billing is generally illegal :

When you have Medicare and you’re using a healthcare provider that accepts Medicare assignment .
When you have Medicaid and your healthcare provider has an agreement with Medicaid.
When your healthcare provider or hospital has a contract with your health plan and is billing you more than that contract allows.
In emergencies (with the exception of ground ambulance charges), or situations in which you go to an in-network hospital but unknowingly receive services from an out-of-network provider.

In the first three cases, the agreement between the healthcare provider and Medicare, Medicaid, or your insurance company includes a clause that prohibits balance billing.

For example, when a hospital signs up with Medicare to see Medicare patients, it must agree to accept the Medicare negotiated rate, including your deductible and/or coinsurance payment, as payment in full. This is called accepting Medicare assignment .

And for the fourth case, the No Surprises Act , which took effect in 2022, protects you from "surprise" balance billing.

Balance billing is usually legal :

When you choose to use a healthcare provider that doesn’t have a relationship or contract with your insurer (including ground ambulance charges, even after implementation of the No Surprises Act).
When you’re getting services that aren’t covered by your health insurance policy, even if you’re getting those services from a provider that has a contract with your health plan.

The first case (a provider not having an insurer relationship) is common if you choose to seek care outside of your health insurance plan's network.

Depending on how your plan is structured, it may cover some out-of-network costs on your behalf. But the out-of-network provider is not obligated to accept your insurer's payment as payment in full. They can send you a bill for the remainder of the charges, even if it's more than your plan's out-of-network copay or deductible.

(Some health plans, particularly HMOs and EPOs , simply don't cover non-emergency out-of-network services at all, which means they would not cover even a portion of the bill if you choose to go outside the plan's network.)

Getting services that are not covered is a situation that may arise, for example, if you obtain cosmetic procedures that aren’t considered medically necessary, or fill a prescription for a drug that isn't on your health plan's formulary . You’ll be responsible for the entire bill, and your insurer will not require the medical provider to write off any portion of the bill—the claim would simply be rejected.

Prior to 2022, it was common for people to be balance billed in emergencies or by out-of-network providers that worked at in-network hospitals. In some states, state laws protected people from these types of surprise balance billing if they had state-regulated health plans.

But not all states had these protections. And the majority of people with employer-sponsored health insurance are covered under self-insured plans, which are not subject to state regulations. This is why the No Surprises Act was so necessary.

How Balance Billing Works

When you get care from a doctor, hospital, or other healthcare provider that isn’t part of your insurer’s provider network (or, if you have Medicare, from a provider that has opted out of Medicare altogether , which is rare but does apply in some cases ), that healthcare provider can charge you whatever they want to charge you (with the exception of emergencies or situations where you receive services from an out-of-network provider while you're at an in-network hospital).

Since your insurance company hasn’t negotiated any rates with that provider, they aren't bound by a contract with your health plan.

Medicare Limiting Charge

If you have Medicare and your healthcare provider is a nonparticipating provider but hasn't entirely opted out of Medicare, you can be charged up to 15% more than the allowable Medicare amount for the service you receive (some states impose a lower limit).

This 15% cap is known as the limiting charge, and it serves as a restriction on balance billing in some cases. If your healthcare provider has opted out of Medicare entirely, they cannot bill Medicare at all and you'll be responsible for the full cost of your visit.

If your health insurance company agrees to pay a percentage of your out-of-network care, the health plan doesn’t pay a percentage of what’s actually billed . Instead, it pays a percentage of what it says should have been billed, otherwise known as a reasonable and customary amount.

As you might guess, the reasonable and customary amount is usually lower than the amount you’re actually billed. The balance bill comes from the gap between what your insurer says is reasonable and customary, and what the healthcare provider or hospital actually charges.

Let's take a look at an example in which a person's health plan has 20% coinsurance for in-network hospitalization and 40% coinsurance for out-of-network hospitalization. And we're going to assume that the No Surprises Act does not apply (ie, that the person chooses to go to an out-of-network hospital, and it's not an emergency situation).

In this scenario, we'll assume that the person already met their $1,000 in-network deductible and $2,000 out-of-network deductible earlier in the year (so the example is only looking at coinsurance).

And we'll also assume that the health plan has a $6,000 maximum out-of-pocket for in-network care, but no cap on out-of-pocket costs for out-of-network care:


Coverage	20% coinsurance with a $6,000 maximum out-of-pocket, including $1,000 deductible that has already been met earlier in the year	40% coinsurance with no maximum out-of-pocket, (but a deductible that has already been met) with balance bill
Hospital charges	$60,000	$60,000
Insurer negotiates a discounted rate of	$40,000	There is no discount because this hospital is out-of-network
Insurer's reasonable and customary rate	Not applicable, since the insurer has a contract with the hospital	$45,000
Insurer pays	$35,000 (80% of the negotiated rate until the patient hits their maximum out-of-pocket, then the insurer pays 100%)	$27,000 (60% of the $45,000 reasonable and customary rate)
You pay coinsurance of	$5,000 (20% of the negotiated rate, until you hit the maximum out-of-pocket of $6,000. This is based on the $1,000 deductible paid earlier in the year, plus the $5,000 from this hospitalization)	$18,000 (40% of $45,000)
Balance billed amount	$0 (the hospital is required to write-off the other $20,000 as part of their contract with your insurer)	$15,000 (The hospital's original bill minus insurance and coinsurance payments)
When paid in full, you’ve paid	$5,000 (Your maximum out-of-pocket has been met. Keep in mind that you already paid $1,000 earlier in the year for your deductible)	$33,000 (Your coinsurance plus the remaining balance.)

When Does Balance Billing Happen?

In the United States, balance billing usually happens when you get care from a healthcare provider or hospital that isn’t part of your health insurance company’s provider network or doesn’t accept Medicare or Medicaid rates as payment in full.

If you have Medicare and your healthcare provider has opted out of Medicare entirely, you're responsible for paying the entire bill yourself. But if your healthcare provider hasn't opted out but just doesn't accept assignment with Medicare (ie, doesn't accept the amount Medicare pays as payment in full), you could be balance billed up to 15% more than Medicare's allowable charge, in addition to your regular deductible and/or coinsurance payment.

Surprise Balance Billing

Receiving care from an out-of-network provider can happen unexpectedly, even when you try to stay in-network. This can happen in emergency situations—when you may simply have no say in where you're treated or no time to get to an in-network facility—or when you're treated by out-of-network providers who work at in-network facilities.

For example, you go to an in-network hospital, but the radiologist who reads your X-rays isn’t in-network. The bill from the hospital reflects the in-network rate and isn't subject to balance billing, but the radiologist doesn’t have a contract with your insurer, so they can charge you whatever they want. And prior to 2022, they were allowed to send you a balance bill unless state law prohibited it.

Similar situations could arise with:

Anesthesiologists
Pathologists (laboratory doctors)
Neonatologists (doctors for newborns)
Intensivists (doctors who specialize in ICU patients)
Hospitalists (doctors who specialize in hospitalized patients)
Radiologists (doctors who interpret X-rays and scans)
Ambulance services to get you to the hospital, especially air ambulance services, where balance billing was frighteningly common
Durable medical equipment suppliers (companies that provide the crutches, braces, wheelchairs, etc. that people need after a medical procedure)

These "surprise" balance billing situations were particularly infuriating for patients, who tended to believe that as long as they had selected an in-network medical facility, all of their care would be covered under the in-network terms of their health plan.

To address this situation, many states enacted consumer protection rules that limited surprise balance billing prior to 2022. But as noted above, these state rules don't protect people with self-insured employer-sponsored health plans, which cover the majority of people who have employer-sponsored coverage.

There had long been broad bipartisan support for the idea that patients shouldn't have to pay additional, unexpected charges just because they needed emergency care or inadvertently received care from a provider outside their network, despite the fact that they had purposely chosen an in-network medical facility. There was disagreement, however, in terms of how these situations should be handled—should the insurer have to pay more, or should the out-of-network provider have to accept lower payments? This disagreement derailed numerous attempts at federal legislation to address surprise balance billing.

But the Consolidated Appropriations Act, 2021, which was enacted in December 2020, included broad provisions (known as the No Surprises Act) to protect consumers from surprise balance billing as of 2022. The law applies to both self-insured and fully-insured plans, including grandfathered plans, employer-sponsored plans, and individual market plans.

It protects consumers from surprise balance billing charges in nearly all emergency situations and situations when out-of-network providers offer services at in-network facilities, but there's a notable exception for ground ambulance charges.

This is still a concern, as ground ambulances are among the medical providers most likely to balance bill patients and least likely to be in-network, and patients typically have no say in what ambulance provider comes to their rescue in an emergency situation. But other than ground ambulances, patients are no longer subject to surprise balance bills as of 2022.

The No Surprises Act did call for the creation of a committee to study ground ambulance charges and make recommendations for future legislation to protect consumers. The Biden Administration announced the members of that committee in late 2022, and the committee began holding meetings in May 2023.

Balance billing continues to be allowed in other situations (for example, the patient simply chooses to use an out-of-network provider). Balance billing can also still occur when you’re using an in-network provider, but you’re getting a service that isn’t covered by your health insurance. Since an insurer doesn’t negotiate rates for services it doesn’t cover, you’re not protected by that insurer-negotiated discount. The provider can charge whatever they want, and you’re responsible for the entire bill.

It is important to note that while the No Surprises Act prohibits balance bills from out-of-network working at in-network facilities, the final rule for implementation of the law defines facilities as "hospitals, hospital outpatient departments, critical access hospitals, and ambulatory surgical centers." Other medical facilities are not covered by the consumer protections in the No Surprises Act.

Balance billing doesn’t usually happen with in-network providers or providers that accept Medicare assignment . That's because if they balance bill you, they’re violating the terms of their contract with your insurer or Medicare. They could lose the contract, face fines, suffer severe penalties, and even face criminal charges in some cases.

If You Get an Unexpected Balance Bill

Receiving a balance bill is a stressful experience, especially if you weren't expecting it. You've already paid your deductible and coinsurance and then you receive a substantial additional bill—what do you do next?

First, you'll want to try to figure out whether the balance bill is legal or not. If the medical provider is in-network with your insurance company, or you have Medicare or Medicaid and your provider accepts that coverage, it's possible that the balance bill was a mistake (or, in rare cases, outright fraud).

And if your situation is covered under the No Surprises Act (ie, an emergency, or an out-of-network provider who treated you at an in-network facility), you should not be subject to a balance bill. So be sure you understand what charges you're actually responsible for before paying any medical bills.

If you think that the balance bill was an error, contact the medical provider's billing office and ask questions. Keep a record of what they tell you so that you can appeal to your state's insurance department if necessary.

If the medical provider's office clarifies that the balance bill was not an error and that you do indeed owe the money, consider the situation—did you make a mistake and select an out-of-network healthcare provider? Or was the service not covered by your health plan?

If you went to an in-network facility for a non-emergency, did you waive your rights under the No Surprises Act (NSA) and then receive a balance bill from an out-of-network provider? This is still possible in limited circumstances, but you would have had to sign a document indicating that you had waived your NSA protections.

Negotiate With the Medical Office

If you've received a legitimate balance bill, you can ask the medical office to cut you some slack. They may be willing to agree to a payment plan and not send your bill to collections as long as you continue to make payments.

Or they may be willing to reduce your total bill if you agree to pay a certain amount upfront. Be respectful and polite, but explain that the bill caught you off guard. And if it's causing you significant financial hardship, explain that too.

The healthcare provider's office would rather receive at least a portion of the billed amount rather than having to wait while the bill is sent to collections. So the sooner you reach out to them, the better.

Negotiate With Your Insurance Company

You can also negotiate with your insurer. If your insurer has already paid the out-of-network rate on the reasonable and customary charge, you’ll have difficulty filing a formal appeal since the insurer didn’t actually deny your claim . It paid your claim, but at the out-of-network rate.

Instead, request a reconsideration. You want your insurance company to reconsider the decision to cover this as out-of-network care , and instead cover it as in-network care. You’ll have more luck with this approach if you had a compelling medical or logistical reason for choosing an out-of-network provider .

If you feel like you’ve been treated unfairly by your insurance company, follow your health plan’s internal complaint resolution process.

You can get information about your insurer’s complaint resolution process in your benefits handbook or from your human resources department. If this doesn’t resolve the problem, you can complain to your state’s insurance department.

Learn more about your internal and external appeal rights.
Find contact information for your Department of Insurance using this resource .

If your health plan is self-funded , meaning your employer is the entity actually paying the medical bills even though an insurance company may administer the plan, then your health plan won't fall under the jurisdiction of your state’s department of insurance.

Self-funded plans are instead regulated by the Department of Labor’s Employee Benefit Services Administration. Get more information from the EBSA’s consumer assistance web page or by calling an EBSA benefits advisor at 1-866-444-3272.

If You Know You’ll Be Legally Balance Billed

If you know in advance that you’ll be using an out-of-network provider or a provider that doesn’t accept Medicare assignment, you have some options. However, none of them are easy and all require some negotiating.

Ask for an estimate of the provider’s charges. Next, ask your insurer what they consider the reasonable and customary charge for this service to be. Getting an answer to this might be tough, but be persistent.

Once you have estimates of what your provider will charge and what your insurance company will pay, you’ll know how far apart the numbers are and what your financial risk is. With this information, you can narrow the gap. There are only two ways to do this: Get your provider to charge less or get your insurer to pay more.

Ask the provider if he or she will accept your insurance company’s reasonable and customary rate as payment in full. If so, get the agreement in writing, including a no-balance-billing clause.

If your provider won’t accept the reasonable and customary rate as payment in full, start working on your insurer. Ask your insurer to increase the amount they’re calling reasonable and customary for this particular case.

Present a convincing argument by pointing out why your case is more complicated, difficult, or time-consuming to treat than the average case the insurer bases its reasonable and customary charge on.

Single-Case Contract

Another option is to ask your insurer to negotiate a single-case contract with your out-of-network provider for this specific service.

A single-case contract is more likely to be approved if the provider is offering specialized services that aren't available from locally-available in-network providers, or if the provider can make a case to the insurer that the services they're providing will end up being less expensive in the long-run for the insurance company.

Sometimes they can agree upon a single-case contract for the amount your insurer usually pays its in-network providers. Sometimes they’ll agree on a single-case contract at the discount rate your healthcare provider accepts from the insurance companies she’s already in-network with.

Or, sometimes they can agree on a single-case contract for a percentage of the provider’s billed charges. Whatever the agreement, make sure it includes a no-balance-billing clause.

Ask for the In-Network Coinsurance Rate

If all of these options fail, you can ask your insurer to cover this out-of-network care using your in-network coinsurance rate. While this won’t prevent balance billing, at least your insurer will be paying a higher percentage of the bill since your coinsurance for in-network care is lower than for out-of-network care.

If you pursue this option, have a convincing argument as to why the insurer should treat this as in-network. For example, there are no local in-network surgeons experienced in your particular surgical procedure, or the complication rates of the in-network surgeons are significantly higher than those of your out-of-network surgeon.

Balance billing refers to the additional bill that an out-of-network medical provider can send to a patient, in addition to the person's normal cost-sharing and the payments (if any) made by their health plan. The No Surprises Act provides broad consumer protections against "surprise" balance billing as of 2022.

A Word From Verywell

Try to prevent balance billing by staying in-network, making sure your insurance company covers the services you’re getting, and complying with any pre-authorization requirements. But rest assured that the No Surprises Act provides broad protections against surprise balance billing.

This means you won't be subject to balance bills in emergencies (except for ground ambulance charges, which can still generate surprise balance bills) or in situations where you go to an in-network hospital but unknowingly receive care from an out-of-network provider.

Congress.gov. H.R.133—Consolidated Appropriations Act, 2021 . Enacted December 27, 2021.

Kona M. The Commonwealth Fund. State balance billing protections . April 20, 2020.

Data.CMS.gov. Opt Out Affidavits .

Chhabra, Karan; Schulman, Kevin A.; Richman, Barak D. Health Affairs. Are Air Ambulances Truly Flying Out Of Reach? Surprise-Billing Policy And The Airline Deregulation Act . October 17, 2019.

Kaiser Family Foundation. 2022 Employer Health Benefits Survey .

Centers for Medicare and Medicaid Services. Members of New Federal Advisory Committee Named to Help Improve Ground Ambulance Disclosure and Billing Practices for Consumers . December 13, 2022.

Centers for Medicare and Medicaid Services. Advisory Committee on Ground Ambulance and Patient Billing (GAPB) .

Internal Revenue Service; Employee Benefits Security Administration; Health and Human Services Department. Requirements Related to Surprise Billing . August 26, 2022.

National Conference of State Legislatures. States Tackling "Balance Billing" Issue . July 2017.

By Elizabeth Davis, RN Elizabeth Davis, RN, is a health insurance expert and patient liaison. She's held board certifications in emergency nursing and infusion nursing.

Business News
India Business News

LIC looks to acquire health insurance companies

Visual Stories

PPF Calculator

This financial tool allows one to resolve their queries related to Public Provident Fund account.

FD Calculator

When investing in a fixed deposit, the amount you deposit earns interest as per the prevailing...

NPS Calculator

The National Pension System or NPS is a measure to introduce a degree of financial stability...

Mutual Fund Calculator

Mutual Funds are one of the most incredible investment strategies that offer better returns...

Other Times Group News Sites

Popular categories, hot on the web, trending topics, living and entertainment, latest news.

Neighborhood Nursing brings healthcare to people’s doorsteps in vulnerable communities

Christopher Booker Christopher Booker

Layla Quran Layla Quran

Maea Lenei Buhre Maea Lenei Buhre

Leave your feedback

Copy URL https://www.pbs.org/newshour/show/neighborhood-nursing-brings-healthcare-to-peoples-doorsteps-in-vulnerable-communities

Correction: In this segment, we incorrectly used the logo for the University of Maryland, College Park, when referencing the nursing school located at the University of Maryland, Baltimore. We regret the error.

In the city of Baltimore, 94 percent of residents have some form of health insurance. Yet many face alarming disparities including higher rates of chronic diseases and shorter life spans. One program is trying to overcome barriers by providing healthcare straight to people’s doorsteps. Special correspondent Christopher Booker reports.

Read the Full Transcript

Notice: Transcripts are machine and human generated and lightly edited for accuracy. They may contain errors.

Geoff Bennett:

In the city of Baltimore, 94 percent of residents there have some form of health insurance, yet many face alarming disparities, including higher rates of chronic diseases and shorter life spans.

As special correspondent Christopher Booker reports, one program is trying to overcome barriers by providing health care straight to people's doorsteps.

Hey, sweetie. You want your blood pressure checked today?

Christopher Booker:

Tuesday mornings are busy in Johnston Square Apartments in East Baltimore. Set up in the lobby, nurses offer free basic checkups for anyone who may be passing through;71-year-old Lavern Clark has lived here for six years, and these weekly nurse visits have become part of her routine.

Lavern Clark, Resident, Johnston Square:

Make sure my heart rate is good. It really helped me a lot with all my medications.

Nurses say many in this predominantly Black neighborhood face barriers to health care. There is a shortage of primary health care doctors and transportation to providers can be difficult.

Tiffany Riser, Neighborhood Nursing:

This community is insured. But if you ask them when's the last time you have seen your provider or do you have the medications that you need, that's where things fall apart.

Tiffany Riser is a nurse practitioner and part of this pilot project that organizers call Neighborhood Nursing.

Launched in January, the aim is to bring health care to communities block by block.

Tiffany Riser:

If you remember, back in the good old days, doctors used to make house calls quite regularly, and now that's quite a rare thing. And that disconnect, I think, is what led to our health care system forgetting that this is where people spend most of their time.

When you see them in their home, you really get an in-depth understanding of the challenges that they're facing.

Because he break it down by needs, then broke it down by insurance.

The team consists of nurses and a community health care worker who helps residents work through any problems they have accessing health care.

Andrew Hampton, Resident, Johnston Square:

I lost a wallet, really.

Oh. What was in your wallet?

Andrew Hampton:

All of my identification, all of my important papers.

Seventy-nine-year-old Andrew Hampton hadn't seen a primary care physician in years, partly because he didn't have any identification.

The team helped him replace his I.D. and recently scheduled an appointment with a doctor.

We're hoping that with this recent visit we're able to get him plugged into the care that he already is covered for and has paid into.

Just a matter of getting it to his front door.

America spends more per capita on health care than any other high-income country. Yet we have the lowest life expectancy at birth, the highest rates of death for treatable or avoidable conditions, and the highest rates of infant and maternal mortality.

Experts say making preventative primary care more accessible through programs like this one in Baltimore could make a difference.

Sarah Szanton, Dean, Johns Hopkins School of Nursing: If we can do it universally, where everyone gets it, where it's like a right, like a utility, then we will be able to reach the promise of preventive care that is not just reactive and that we're preventing things for everyone and everyone could be at their greatest health.

Sarah Szanton is the dean of the Johns Hopkins School of Nursing and leads the philanthropy-funded program. A collaboration with the University of Maryland, Morgan State, and Coppin State schools of nursing, she says by next year they plan to bring primary health care to more than 4,000 Baltimore residents, regardless of their insurance coverage.

Sarah Szanton:

The vision is that we will go door to door and be in the laundromat, in the libraries, in the schools, sort of blanket it, so that everyone has access to a nurse and community health worker.

The approach was inspired by a public health program developed more than 1,000 miles away in Costa Rica, where health care workers aim to visit every resident nationwide in their home at least once a year.

Dr. Asaf Bitton, Harvard T.H. Chan School of Public Health: They might come back to visit them if they have high needs. They might connect them with other parts of the public health or nutrition system. And all the time, they connect them with the acute and chronic care that that person might need.

Harvard School of Public Health's Dr. Asaf Bitton has studied the impact of Costa Rica's model.

Dr. Asaf Bitton:

Costa Rica has significantly improved the health of its population across both what we call communicable diseases — those are infectious diseases that can often be prevented with vaccines and other antibiotics — as well as noncommunicable diseases.

Costa Rica has achieved those better health outcomes while spending less than a 10th of what the U.S. spends per person health care.

Melinda Abrams, The Commonwealth Fund:

We tend to focus on people who are sick, as opposed to focusing on keeping people well or identifying problems early to help avoid more serious problems later on.

Melinda Abrams is the executive vice president for programs at The Commonwealth Fund, a health care research organization.

She says the complicated nature of health care in the United States would make it difficult to expand a program like Neighborhood Nursing beyond Baltimore.

Melinda Abrams:

The major barrier right now, in my opinion, is the financing. We tend to focus on hospitalizations and specialty. We're really focused on individual services, which incentivizes more volume, as opposed to having clinicians be accountable for both the quality and outcomes for patient and patient care.

Back at Johnston Square Apartments, this new approach has started to see small wins. Calls to 911 from the building are down. And organizers say the community has started to take the effort beyond the weekly checkups.

Regina Hammond, Resident, Johnston Square:

I went to a meeting where it was shared with me that people in my zip code, this area, our life expectancy is not as long as in other areas. And that bothered me.

Longtime resident Regina Hammond suggested the nurses help create a neighborhood exercise group. They now take weekly walks. And on days when it's too hot, they work out indoors.

Why was there a need for a walking group?

Regina Hammond:

Because a lot of people don't venture too far because they don't want to walk alone. Some people don't feel safe. It's about getting out. It's about learning who's in your neighborhood. It's about looking at beautiful flowers, being able to talk with a nurse walking beside you, talking to them about things that nobody took the time to listen to you about.

So it's serving a lot of purposes.

She hopes to see this initiative grow beyond her neighborhood.

That, Abrams says, is possible, but will require collaboration.

What it would take is federal policymakers, state policymakers, the hospitals, the doctors, and the insurance companies to come together to agree to pivot and invest more on prevention and primary care.

No mistake, that is very hard to do. But I'm optimistic, because there are a number of communities that are experimenting with this right now.

It was 115 over 70.

But, for now, in this community, these nurses will keep showing up week after week.

For the PBS "News Hour," I'm Christopher Booker in Baltimore.

Listen to this Segment

Harris holds rally with vice president pick, in Philadelphia

Watch the Full Episode

Christopher Booker is a correspondent and producer for PBS NewsHour Weekend covering music, culture, our changing economy and news of the cool and weird. He also teaches at Columbia University’s School of International and Public Affairs , following his work with Northwestern's Medill School of Journalism in Chicago and Doha, Qatar.

Layla Quran is a general assignment producer for PBS NewsHour. She was previously a foreign affairs reporter and producer.

Maea Lenei Buhre is a general assignment producer for the PBS NewsHour.

Support Provided By: Learn more

More Ways to Watch

Educate your inbox.

Subscribe to Here’s the Deal, our politics newsletter for analysis you won’t find anywhere else.

Thank you. Please check your inbox to confirm.

GST applied to health insurance premiums impacts their overall cost. Currently, health insurance policies are subject to 18 per cent GST , which is applied to the premium amount, said Ajay Shah, Head of Distribution, Care Health Insurance.

To understand the impact of GST rate on insurance premiums, people can consider the following example:

Suppose you have a health insurance policy with a base premium of ₹ 15,000. The GST rate applied to health insurance premiums is 18 per cent.

To calculate the total premium, including GST:

1. Calculate the GST Amount:

- GST = Base Premium × GST Rate

- GST = ₹ 15,000 × 0.18

- GST = ₹ 2,700

2. Calculate the Total Premium:

- Total Premium = Base Premium + GST

- Total Premium = ₹ 15,000 + ₹ 2,700

- Total Premium = ₹ 17,700

So, the GST adds ₹ 2,700 to the base premium of ₹ 15,000, resulting in a total premium of ₹ 17,700.

“This additional cost can be a decisive factor, potentially leading to two outcomes: either the customer is willing to choose to go for a lower coverage to fit the pocket that will lead to underinsured or inadequate coverage or deterring customers from purchasing the policy, keeping them and their families vulnerable for future health emergencies,” said Rakesh Jain, CEO, Reliance General Insurance.

“Policyholders using the old income tax regime can avail tax deductions on the insurance premiums up to a certain limit under Section 80D and 80C of the Income Tax Act,” said Ghosh.

Will the reduction of GST rates on insurance slash premiums?

“If GST on insurance products were reduced or eliminated, insurers would likely pass the benefits on to customers. The most immediate effect would be a reduction in premiums, making insurance more affordable,” said Shah.

Some issues continue to bother the insurance industry players and deter them from reducing premiums. “Insurance companies are currently unable to claim ITC on the hospital charges, and thus, the same is passed on to the customers as premiums. Thus, if an insurance company can claim ITC on all the GST services procured by the company, this can help reduce the premiums further,” opined Ghosh.

Catch all the Instant Personal Loan , Business News , Money news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

Get Instant Loan up to ₹10 Lakh!

Enter Mobile Number

Employment Type

Most active stocks, oil & natural gas corporation, bharat electronics, market snapshot.

Top Gainers
52 Week High

Godfrey Phillips India

Jubilant ingrevia, affle india, trending in market.

Stocks to Buy
Stock market today
Top Stock Recommendations
Bansal Wire Industries IPO

Recommended For You

Gold prices, popular in money, how sebi’s reforms could transform india’s investment advisory landscape, itr filing 2024: three income tax refund rules you should know, wait for it….

Election 2024
Entertainment
Newsletters
Photography
AP Buyline Personal Finance
AP Buyline Shopping
Press Releases
Israel-Hamas War
Russia-Ukraine War
Global elections
Asia Pacific
Latin America
Middle East
Delegate Tracker
AP & Elections
2024 Paris Olympic Games
Auto Racing
Movie reviews
Book reviews
Financial Markets
Business Highlights
Financial wellness
Artificial Intelligence
Social Media

15 states sue to block Biden’s effort to help migrants in US illegally get health coverage

FILE - Kansas Attorney General Kris Kobach participates in a ceremony honoring fallen law enforcement officers, Friday, May 3, 2024, at the Statehouse in Topeka, Kan. Kansas is one of 15 states that filed a federal lawsuit Thursday, Aug. 8, 2024, against the Biden administration over a rule that is expected to allow 100,000 immigrants brought to the U.S. illegally as children to enroll next year in the federal Affordable Care Act’s health insurance. (AP Photo/John Hanna, File)

Copy Link copied

TOPEKA, Kan. (AP) — Fifteen states filed a federal lawsuit Thursday against the Biden administration over a rule that is expected to allow 100,000 immigrants brought to the U.S. illegally as children to enroll next year in the federal Affordable Care Act’s health insurance.

The states are seeking to block the rule from taking effect Nov. 1 and providing people known as “Dreamers” access to tax breaks when they sign up for coverage. The Affordable Care Act’s marketplace enrollment opens the same day, just four days ahead of the presidential election.

The states filed suit in North Dakota, one of the states involved. All have Republican attorneys general who are part of a GOP effort to thwart Biden administration rules advancing Democratic policy goals.

The lawsuit argues that the rule violates a 1996 welfare reform law and the ACA. They also said it would encourage more immigrants to come to the U.S. illegally, burdening the states and their public school systems. Many economists have concluded that immigrants provide a net economic benefit, and immigration appears to have fueled job growth after the COVID-19 pandemic that prevented a recession.

The lawsuit comes amid Republican attacks on Biden and Vice President Kamala Harris, the presumed Democratic presidential nominee, as weak on curbing illegal immigration. Border crossings hit record highs during the Biden administration but have dropped more recently .

“Illegal aliens shouldn’t get a free pass into our country,” Kansas Attorney General Kris Kobach said in a statement. “They shouldn’t receive taxpayer benefits when they arrive, and the Biden-Harris administration shouldn’t get a free pass to violate federal law.”

Kobach is an immigration hardliner who began building a national profile two decades ago by urging tough restrictions on immigrants living in the U.S. illegally, and he helped draft Arizona’s “show your papers” law in 2010. Besides Kansas and North Dakota, the other states involved in the lawsuit are Alabama, Idaho, Indiana, Iowa, Missouri, Montana, Nebraska, New Hampshire, Ohio, South Carolina, South Dakota, Tennessee and Virginia.

U.S. Department of Health and Human Services officials did not immediately respond Thursday to an email seeking comment about the lawsuit. But Biden said in May in outlining the rule that he was “committed to providing Dreamers the support they need to succeed.” The Biden administration is shielding them from deportation.

The “Dreamers” and their advocates have said they’re young people who had little or no choice in coming to the U.S. and years later are fully integrated into their communities. At least 25 states, including Kansas, Nebraska and Virginia, allow them to pay the lower tuition rates reserved for their residents, according to the National Immigration Law Center.

In May, Biden said: “I’m proud of the contributions of Dreamers to our country.”

The “Dreamers” have been ineligible for government-subsidized health insurance programs because they did not meet the definition of having a “lawful presence” in the U.S. The states filing the lawsuit said declaring their lawful presence by rule is “illogical on its face,” given that they’d face deportation without Biden administration intervention.

“Subsidized health insurance through the ACA is a valuable public benefit that encourages unlawfully present alien beneficiaries to remain in the United States,” the lawsuit said.

In past lawsuits against the Biden administration, states have sometimes struggled to persuade judges that the harm they face from a new rule is direct, concrete and specific enough to give them the right to sue. Of the 15 states involved in the lawsuit, only Idaho and Virginia run their own health insurance marketplaces instead of relying on a federal one.

But the states argue that they all face higher costs from increased illegal immigration. They rely on a 2023 report from the Federation for American Immigration Reform, which not only argues for stronger laws against illegal immigration but sharp curbs on legal immigration.

CVS Health cuts its 2024 forecast a third time, dragged down by health insurance struggles

CVS Health president and chief executive officer Karen Lynch is taking over leadership of the health insurance segment of the company.

CVS Health has chopped its 2024 forecast for a third time as the health care giant continues to struggles with its health insurance business.

The leader of that segment, Executive Vice President Brian Kane, has left the company, CVS said Wednesday, and CEO Karen Lynch would take over.

The company’s adjusted operating income from that segment plunged 39 percent in the quarter to $938 million, helping to drag down the company’s overall profit. CVS Health has been struggling with rising claims in its Medicare Advantage business and a drop in quality ratings for those plans, which affects government funding for them.

CVS Health said it also dealt with higher costs from people covered by the state and federally funded Medicaid program.

Overall, the company’s profit dropped more than 7 percent to $1.77 billion in the quarter.

CVS Health had adjusted earnings of $1.83 per share on $91.2 billion in revenue. Analysts projected earnings of $1.73 per share on $91.41 billion in revenue.

CVS Health now expects adjusted per-share earnings for the year to be between $6.40 and $6.65. The company in May cut its per-share expectations to at least $7.

Wall Street had been expecting per-share earnings of $6.96, according to FactSet.

CVS Health Corp. runs one of the nation’s largest drugstore chains and a huge pharmacy benefit management business that operates prescription drug coverage for big clients like insurers and employers. It also covers more than 26 million people with health insurance through its Aetna arm.

Shares of the Woonsocket, Rhode Island, company slipped 2 percent to $56.99 in premarket trading.

The stock has already shed a quarter of their value this year while the Standard & Poor’s 500 index has climbed about 10 percent.

COMMENTS

An assignment of benefits (AOB) can streamline the insurance process
An AOB is a legal agreement that allows your insurance company to directly pay a third party for services performed on your behalf. In the case of health care, it could be your doctor or another ...
Assignment of Benefits: What You Need to Know
There are many reasons why an insurance company may not accept an assignment of benefits. To speak with a Schwartzapfel Lawyers expert about this directly, call 1-516-342-2200 for a free consultation today. It will be our privilege to assist you with all your legal questions, needs, and recovery efforts.
What is assignment of benefits, and how does it impact insurers?
Mar 06, 2020 Share. Assignment of benefits, widely referred to as AOB, is a contractual agreement signed by a policyholder, which enables a third party to file an insurance claim, make repair ...
Medicare Assignment: What Does Accepting Assignment Mean?
What is Medicare Assignment. Medicare assignment is an agreement by your doctor or other healthcare providers to accept the Medicare-approved amount as the full cost for a covered service. Providers who "accept assignment" bill Medicare directly for Part B-covered services and cannot charge you more than the applicable deductible and ...
What is Assignment of Benefits in Medical Billing?
An assignment of benefits is the act of signing documentation authorizing a health insurance company to pay a physician directly. In other words, the insurance company can pay claims without the direct involvement of the patient in the process. There are other situations where AOBs can be helpful, but we'll focus on their use in relation to ...
What Should An Assignment of Benefits Form Include?
An assignment of benefits form (AOB) is a crucial document in the healthcare world. It is an agreement by which a patient transfers the rights or benefits under their insurance policy to a third-party - in this case, the medical professional who provides services. This way, the medical provider can file a claim and collect insurance payments.
What is Medicare Assignment
Summary: Medicare Assignment is an agreement between healthcare providers and Medicare, where providers accept the Medicare-approved amount as full payment, preventing them from charging beneficiaries extra. This benefits Medicare beneficiaries by controlling their costs and ensuring they only pay deductibles and copayments.
What Is the Assignment of Insurance Benefits?
Once the insurance is purchased you complete a assignment of benefits, sharing ownership control with the bank. You must pay the insurance premiums and cannot make any decisions affecting the ...
What is an Assignment of Benefits?
With a homeowners, renters, or auto insurance claim, the third party could be a contractor, auto repair shop, or other facility. Assignment of benefits is legal, thanks to a concept known as freedom of contract, which says two parties may make a private agreement, including the forfeiture of certain rights, and the government may not interfere.
Assignment of benefits
Assignment of benefits is a fundamental concept in healthcare revenue cycle management. It enables healthcare providers to receive payment directly from the insurance company, reducing the financial burden on patients and streamlining the billing process. By understanding the assignment of benefits, patients can make informed decisions about ...
Medicare Assignment
Medicare assignment is a fee schedule agreement between the federal government's Medicare program and a doctor or facility. When Medicare assignment is accepted, it means your doctor agrees to the payment terms of Medicare. Doctors that accept Medicare assignment fall under one of three designations: a participating doctor, a non ...
All You Need to Know About Assignment of Benefits
When you sign an assignment of benefits agreement, you bypass dealing with an insurance company's claims department and allow the benefits to be paid directly to the provider. For example, the assignment of benefits medical definition is when you sign a form that requires your health insurance provider to pay the hospital or physician directly.
Can You Assign Your Insurance Benefits to Someone Else?
An anti-assignment clause is intended to prevent the insurer from unwittingly assuming risks it never intended to take on. Commercial insurers review business insurance applicants carefully. Before they issue policies, underwriters consider the knowledge and experience of a company's owners and managerial staff. If a business is sold to someone else, the new owners may not be as skilled or ...
Assignment Of Benefits
Assignment of benefits is a document that directs payment to a third party at the insured's request. It becomes legitimate once both the insured party and their insurer have signed the AOB form. AOB is used in a number of insurance contexts, such as paying physicians or clinics through health insurance or paying contractors for repairs ...
Does your provider accept Medicare as full payment?
If your doctor, provider, or supplier doesn't accept assignment: You might have to pay the full amount at the time of service. They should submit a claim to Medicare for any Medicare-covered services they give you, and they can't charge you for submitting a claim. If they refuse to submit a Medicare claim, you can submit your own claim to ...
Assignment of Benefits: Consumer Beware
An Assignment of Benefits, or an AOB, is an agreement signed by a policyholder that allows a third party—such as a water extraction company, a roofer or a plumber—to act on behalf of the insured and seek direct payment from the insurance company. An AOB can be a useful tool for getting repairs done, as it allows the repair company to deal ...
Assignment and Nonassignment of Benefits
Nonassignment of Benefits. The second reimbursement method a physician/supplier has is choosing to not accept assignment of benefits. Under this method, a non-participating provider is the only provider that can file a claim as non-assigned. When the provider does not accept assignment, the Medicare payment will be made directly to the beneficiary.
Assignment of Benefits (AOB)
An assignment of benefits (AOB) is a contractual agreement that enables a third party to access insurance benefits on behalf of the policyholder. [1] When the policyholder signs an AOB agreement, it grants the third party the authority to initiate an insurance claim and receive reimbursement directly from the insurance company.
The Importance of the Assignment of Benefits
An Assignment of Benefits is essential for a medical provider - whether the physician, facility, or ancillary service provider - to have a right to payment from the Insurance Carrier or Third-Party Administrator (TPA). A medical provider or the administrative staff for the medical provider may feel overwhelmed by the number of forms that ...
What is an assignment of benefits?
An assignment of benefits (AOB) is a legal agreement you sign that lets a third party negotiate, bill, and receive payment from your insurance provider.
INSIGHT: An Ounce of Prevention—The Importance of Early Review of
Out-of network health-care providers continue to face challenges in attempting to bring claims to recover from health insurers on behalf of their patients. While anti-assignment provisions my pose a recovery hurdle, awareness of legal constraints on how these provisions operate, and knowing that other mechanisms for seeking recovery exist, is critical, K&L Gates LLP attorneys write.
Balance Billing in Health Insurance
Balance billing refers to the additional bill that an out-of-network medical provider can send to a patient, in addition to the person's normal cost-sharing and the payments (if any) made by their health plan. The No Surprises Act provides broad consumer protections against "surprise" balance billing as of 2022.
Georgia Code § 33-29A-4 (2023)
(a) Each eligible individual in this state whose most recent creditable coverage was provided by an entity other than a managed care organization shall be entitled to participate in the Georgia Health Insurance Assignment System (sometimes referred to as GHIAS in this chapter) created pursuant to this Code section. Each eligible individual in this state whose most recent creditable coverage ...
Health Insurance ASSIGNMENT Flashcards
Every month, the individual pays a $50—-to an insurance company to have health insurance plan. The visit to the doctor cost $125. The individual has to make a payment called—— directly to the doctors office. During the visit, the doctor determines the individual require a procedure costing $4500. Before the individual agrees to the ...
LIC looks to acquire health insurance companies
LIC announced its intention to enter the health insurance market through an acquisition within the current financial year, as stated by MD & CEO Siddhartha Mohanty. The company reported a 9.6% ...
Neighborhood Nursing brings healthcare to people's doorsteps in ...
In the city of Baltimore, 94 percent of residents have some form of health insurance. Yet many face alarming disparities including higher rates of chronic diseases and shorter life spans.
GST on health and life insurance: How much do tax rates impact ...
Currently, all types of health and life insurance policies are subject to an 18 per cent GST. Before the implementation of GST in 2017, insurance premiums garnered a 15 per cent service tax, which ...
15 states sue to block Biden's effort to help migrants in US illegally
TOPEKA, Kan. (AP) — Fifteen states filed a federal lawsuit Thursday against the Biden administration over a rule that is expected to allow 100,000 immigrants brought to the U.S. illegally as children to enroll next year in the federal Affordable Care Act's health insurance.. The states are seeking to block the rule from taking effect Nov. 1 and providing people known as "Dreamers ...
CVS Health cuts its 2024 forecast a third time, dragged down by health
It also covers more than 26 million people with health insurance through its Aetna arm. Shares of the Woonsocket, Rhode Island, company slipped 2 percent to $56.99 in premarket trading.

What is an assignment of benefits?

What is an assignment of benefits?

How an AOB works

Example of an assignment of benefits

When would you need to use an assignment of benefits?

Assignment of benefits for health insurance

Assignment of benefits for car owners

Assignment of benefits for homeowners

The fraud factor

Pros and cons of an assignment of benefits

The takeaway

About the contributors

Practice Areas

Assignment of Benefits: What You Need to Know

What Is an Assignment of Benefits?

What Does an Assignment of Benefits Mean?

What Types of Insurance Qualify for an Assignment of Benefits?

Who Uses Assignments of Benefits?

Advantages of Using an Assignment of Benefits

Risks of Using an Assignment of Benefits

How To Make Sure an Assignment of Benefits Is Safe

Can You Sue a Party for Abusing an Assignment of Benefits?

Assignment of Benefits FAQs

Can You Revoke an Assignment of Benefits?

Contact Schwartzapfel Lawyers Today

Related Posts

Do Civil Cases Have A Jury?

De Jure vs. De Facto: The Differences Explained

We'll Fight For You

Medicare Assignment

What is Medicare Assignment

Medicare Participating Providers: Providers Who Accept Medicare Assignment

Medicare Non-Participating Providers: Providers Who Don’t Accept Assignment

Opt-Out Providers: What You Need to Know

How to Find A Doctor Who Accepts Medicare Assignment

Kayla Hopkins

Ashlee Zareczny

What is Assignment of Benefits in Medical Billing?

List of Providers and Services

Information Commonly Requested on Assignment of Benefits Form:

How AOBs Affect the Medical Practitioner

Things to Bear in Mind

Looking for a qualified medical billing service?

What Is Cosmetic Dermatology? Your Guide to Treatments, Costs, and More

What Is the Assignment of Insurance Benefits?

More Articles

Health Insurance

Income Loan

Collateral Loan

Charitable Contribution

Related Articles

What is an Assignment of Benefits?

Assignment of benefits

What is Assignment of Benefits?

Understanding Assignment of Benefits

Difference between Assignment of Benefits and Power of Attorney

Examples of Assignment of Benefits

Get paid in full by bringing clarity to your revenue cycle

False Claims Act

Subscribe to the

Healthcare Clarified newsletter

Can You Assign Your Insurance Benefits to Someone Else?

Anti-Assignment Clause

Post-Loss Assignments Permitted

Problems With Assignments of Benefits

Avoiding Problems With AOBs

AOBs in Health Insurance

Assignment Of Benefits

Insuranceopedia Explains Assignment Of Benefits

Related Definitions

Does your provider accept Medicare as full payment?

Using a provider that accepts assignment

Using a provider that doesn't accept Medicare as full payment

Using a provider that "opts-out" of Medicare

Private contracts with doctors or providers who opt out

What do you want to do next?

Search NAIC

Consumer Insight

Assignment of Benefits: Consumer Beware

Assignment of Benefits for Homeowners