Considering Kemper for your insurance needs? Bankrate has the info you need.
Assignment of benefits
What does assignment of benefits mean? Let Bankrate explain.
What is assignment of benefits?
An assignment of benefits is when a patient signs paperwork requiring his health insurance provider to pay his physician or hospital directly. AOBs also play a part in other cases dealing with insurance, such as homeowners insurance, but here we are defining the term in the area of medical benefits.
Typically, when signing an AOB agreement, you agree to allow the medical provider to seek payment from your health insurance company directly. The intent of an AOB agreement is to make the process easier for you, as you do not need to deal directly with your insurer.
An AOB also can cut out some of the costs in the form of service fees often associated with processing. By doing this, you, as a patient, can focus on your medical treatment and recovery, without having to worry about the process involved with paying your medical bills.
Assignment of benefits example
When you sign an AOB agreement, you give a third party the right to seek payment for services rendered on the part of the provider, and the medical field is a classic example of where you may sign an assignment of benefits agreement.
A list of the providers or services that use AOBs include the following:
- Ambulance services.
- Ambulatory surgical center services.
- Clinical diagnostic lab services.
- Drugs and biologicals.
- Home dialysis supplies and equipment.
- Physician services for patients that use Medicare and Medicaid.
- Services of medical professionals other than a primary physician, including certified registered nurse anesthetists, clinical nurse specialists, clinical psychologists, clinical social workers, nurse midwives, nurse practitioners and physician assistants.
- Simplified billing roster for vaccines, such as for the influenza virus and pneumococcal.
Medical insurance claims represent the most common form of AOB agreement. You need to make sure that your insurer authorizes you to use an AOB with your medical provider; otherwise the insurer might not honor the AOB.
One area of contention concerning medical AOBs is the Employee Retirement Income Security Act plan. While set up to protect you if you participate in a pension or employer-based health plan, it also can present difficulties for providers trying to enforce an AOB.
This is due in part to a plan’s limitations on payments, especially for out-of-network providers. Before signing an out-of-network AOB, check with your insurer to see exactly what is covered.
More From Bankrate
5 min read Aug 17, 2022
Bankrate is not a licensed insurance producer, and we are not attempting to sell, solicit or negotiate insurance products or coverage. Bankrate provides educational and informative content regarding insurance [...]1 min read Aug 03, 2022
Bankrate’s extensive research could help you decide if Esurance is right for you.5 min read Jul 12, 2022
See how bundling your home and auto insurance is often a smart financial move.10 min read Jun 10, 2022
Learn about AAA’s top insurance products and its many services for AAA members.7 min read May 13, 2022
Bankrate offers insight into how personal property insurance protects your belongings.8 min read Apr 25, 2022
Bankrate untwists some of the most common myths about tornadoes.6 min read Apr 25, 2022
Is Ameriprise the right choice for your financial planning? Research with Bankrate.4 min read Apr 14, 2022
Progressive is a big name in the insurance industry, but is it right for your needs?8 min read Apr 08, 2022