An assignment of benefits is a legal contract used to transfer the rights to benefits under a health care plan from the insured to the health care provider. If there is an assignment of benefits, the health plan will pay its portion of the fee (the benefits) directly to the provider. It eliminates the need for the insured to pay the provider in full and then seek reimbursement of the allowed amount under the policy.
This agreement is signed by the patient as a request to pay the designated amount to the health care provider for the health benefits he/she may have received. On the patient’s request the insurance payer makes the payment to the hospital/doctor.
While signing the form, the patient also authorizes the insurance company to release any and all written information that is required by the hospital for reimbursement purposes. This also means that any medical billing and collection company hired by the hospital is free to use the released information for billing purposes. In addition to this, the patient agrees to appoint anyone from the hospital as a representative on his/her behalf to seek payment from the insurance payer. In other words, once the document has been signed, the patient is no longer required to deal directly with the insurance company or its representative, unless asked to do so
By law, the providers or types of services listed below MUST also accept assignment:
- Clinical diagnostic laboratory services;
- Physician services to individuals dually entitled to Medicare and Medicaid;
- Services of physician assistants, nurse practitioners, clinical nurse specialists, nurse midwives, certified registered nurse anaesthetists, clinical psychologists, and clinical social workers;
- Ambulatory surgical centre services for covered ASC procedures;
- Home dialysis supplies and equipment paid under Method II;
- Ambulance services;
- Drugs and biologicals; and
- Simplified Billing Roster for influenza virus vaccine and pneumococcal vaccine.
CMS 1500
Item 27 on the CMS-1500 claim form allows the provider to indicate whether they accept or do not accept assignment. When accepting assignment, the beneficiary may be billed for the 20% coinsurance, any unmet deductible and for services not covered by Payer
EDI 837
Loop 2300, Claim Information
Example:
If assignment of Benefit is yes, then
CLM*124304*60.00***11:B:1*Y*A*Y*Y
eClaimManager
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