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Medicare Assignment: Everything You Need to Know

Medicare assignment.

  • Providers Accepting Assignment
  • Providers Who Do Not
  • Billing Options
  • Assignment of Benefits
  • How to Choose

Frequently Asked Questions

Medicare assignment is an agreement between Medicare and medical providers (doctors, hospitals, medical equipment suppliers, etc.) in which the provider agrees to accept Medicare’s fee schedule as payment in full when Medicare patients are treated.

This article will explain how Medicare assignment works, and what you need to know in order to ensure that you won’t receive unexpected bills.

fizkes / Getty Images

There are 35 million Americans who have Original Medicare. Medicare is a federal program and most medical providers throughout the country accept assignment with Medicare. As a result, these enrollees have a lot more options for medical providers than most of the rest of the population.

They can see any provider who accepts assignment, anywhere in the country. They can be assured that they will only have to pay their expected Medicare cost-sharing (deductible and coinsurance, some or all of which may be paid by a Medigap plan , Medicaid, or supplemental coverage provided by an employer or former employer).

It’s important to note here that the rules are different for the 29 million Americans who have Medicare Advantage plans. These beneficiaries cannot simply use any medical provider who accepts Medicare assignment.

Instead, each Medicare Advantage plan has its own network of providers —much like the health insurance plans that many Americans are accustomed to obtaining from employers or purchasing in the exchange/marketplace .

A provider who accepts assignment with Medicare may or may not be in-network with some or all of the Medicare Advantage plans that offer coverage in a given area. Some Medicare Advantage plans— health maintenance organizations (HMOs) , in particular—will only cover an enrollee’s claims if they use providers who are in the plan's network.

Other Medicare Advantage plans— preferred provider organizations (PPOs) , in particular—will cover out-of-network care but the enrollee will pay more than they would have paid had they seen an in-network provider.

Original Medicare

The bottom line is that Medicare assignment only determines provider accessibility and costs for people who have Original Medicare. People with Medicare Advantage need to understand their own plan’s provider network and coverage rules.

When discussing Medicare assignment and access to providers in this article, keep in mind that it is referring to people who have Original Medicare.

How to Make Sure Your Provider Accepts Assignment

Most doctors, hospitals, and other medical providers in the United States do accept Medicare assignment.

Provider Participation Stats

According to the Centers for Medicare and Medicaid Services, 98% of providers participate in Medicare, which means they accept assignment.

You can ask the provider directly about their participation with Medicare. But Medicare also has a tool that you can use to find participating doctors, hospitals, home health care services, and other providers.

There’s a filter on that tool labeled “Medicare-approved payment.” If you turn on that filter, you will only see providers who accept Medicare assignment. Under each provider’s information, it will say “Charges the Medicare-approved amount (so you pay less out-of-pocket).”

What If Your Provider Doesn’t Accept Assignment?

If your medical provider or equipment supplier doesn’t accept assignment, it means they haven’t agreed to accept Medicare’s approved amounts as payment in full for all of the services.

These providers can still choose to accept assignment on a case-by-case basis. But because they haven’t agreed to accept Medicare assignment for all services, they are considered nonparticipating providers.

Note that "nonparticipating" does not mean that a provider has opted out of Medicare altogether. Medicare will still pay claims for services received from a nonparticipating provider (i.e., one who does not accept Medicare assignment), whereas Medicare does not cover any of the cost of services obtained from a provider who has officially opted out of Medicare.

If a Medicare beneficiary uses a provider who has opted out of Medicare, that person will pay the provider directly and Medicare will not be involved in any way.

Physicians Who Have Opted Out

Only about 1% of all non-pediatric physicians have opted out of Medicare.

For providers who have not opted out of Medicare but who also don’t accept assignment, Medicare will still pay nearly as much as it would have paid if you had used a provider who accepts assignment. Here’s how it works:

  • Medicare will pay the provider 95% of the amount they would pay if the provider accepted assignment.
  • The provider can charge the person receiving care more than the Medicare-approved amount, but only up to 15% more (some states limit this further). This extra amount, which the patient has to pay out-of-pocket, is known as the limiting charge . But the 15% cap does not apply to medical equipment suppliers; if they do not accept assignment with Medicare, there is no limit on how much they can charge the person receiving care. This is why it’s particularly important to make sure that the supplier accepts Medicare assignment if you need medical equipment.
  • The nonparticipating provider may require the person receiving care to pay the entire bill up front and seek reimbursement from Medicare (using Form CMS 1490-S ). Alternatively, they may submit a claim to Medicare on behalf of the person receiving care (using Form CMS-1500 ).
  • A nonparticipating provider can choose to accept assignment on a case-by-case basis. They can indicate this on Form CMS-1500 in box 27. The vast majority of nonparticipating providers who bill Medicare choose to accept assignment for the claim being billed.
  • Nonparticipating providers do not have to bill your Medigap plan on your behalf.

Billing Options for Providers Who Accept Medicare

When a medical provider accepts assignment with Medicare, part of the agreement is that they will submit bills to Medicare on behalf of the person receiving care. So if you only see providers who accept assignment, you will never need to submit your own bills to Medicare for reimbursement.

If you have a Medigap plan that supplements your Original Medicare coverage, you should present the Medigap coverage information to the provider at the time of service. Medicare will forward the claim information to your Medigap insurer, reducing administrative work on your part.

Depending on the Medigap plan you have, the services that you receive, and the amount you’ve already spent in out-of-pocket costs, the Medigap plan may pay some or all of the out-of-pocket costs that you would otherwise have after Medicare pays its share.

(Note that if you have a type of Medigap plan called Medicare SELECT, you will have to stay within the plan’s network of providers in order to receive benefits. But this is not the case with other Medigap plans.)

After the claim is processed, you’ll be able to see details in your MyMedicare.gov account . Medicare will also send you a Medicare Summary Notice. This is Medicare’s version of an explanation of benefits (EOB) , which is sent out every three months.

If you have a Medigap plan, it should also send you an EOB or something similar, explaining the claim and whether the policy paid any part of it.

What Is Medicare Assignment of Benefits?

For Medicare beneficiaries, assignment of benefits means that the person receiving care agrees to allow a nonparticipating provider to bill Medicare directly (as opposed to having the person receiving care pay the bill up front and seek reimbursement from Medicare). Assignment of benefits is authorized by the person receiving care in Box 13 of Form CMS-1500 .

If the person receiving care refuses to assign benefits, Medicare can only reimburse the person receiving care instead of paying the nonparticipating provider directly.

Things to Consider Before Choosing a Provider

If you’re enrolled in Original Medicare, you have a wide range of options in terms of the providers you can use—far more than most other Americans. In most cases, your preferred doctor and other medical providers will accept assignment with Medicare, keeping your out-of-pocket costs lower than they would otherwise be, and reducing administrative hassle.

There may be circumstances, however, when the best option is a nonparticipating provider or even a provider who has opted out of Medicare altogether. If you choose one of these options, be sure you discuss the details with the provider before proceeding with the treatment.

You’ll want to understand how much is going to be billed and whether the provider will bill Medicare on your behalf if you agree to assign benefits (note that this is not possible if the provider has opted out of Medicare).

If you have supplemental coverage, you’ll also want to check with that plan to see whether it will still pick up some of the cost and, if so, how much you should expect to pay out of your own pocket.

A medical provider who accepts Medicare assignment is considered a participating provider. These providers have agreed to accept Medicare’s fee schedule as payment in full for services they provide to Medicare beneficiaries. Most doctors, hospitals, and other medical providers do accept Medicare assignment.

Nonparticipating providers are those who have not signed an agreement with Medicare to accept Medicare’s rates as payment in full. However, they can agree to accept assignment on a case-by-case basis, as long as they haven’t opted out of Medicare altogether. If they do not accept assignment, they can bill the patient up to 15% more than the Medicare-approved rate.

Providers who opt out of Medicare cannot bill Medicare and Medicare will not pay them or reimburse beneficiaries for their services. But there is no limit on how much they can bill for their services.

A Word From Verywell

It’s in your best interest to choose a provider who accepts Medicare assignment. This will keep your costs as low as possible, streamline the billing and claims process, and ensure that your Medigap plan picks up its share of the costs.

If you feel like you need help navigating the provider options or seeking care from a provider who doesn’t accept assignment, the Medicare State Health Insurance Assistance Program (SHIP) in your state may be able to help.

A doctor who does not accept Medicare assignment has not agreed to accept Medicare’s fee schedule as payment in full for their services. These doctors are considered nonparticipating with Medicare and can bill Medicare beneficiaries up to 15% more than the Medicare-approved amount.

They also have the option to accept assignment (i.e., accept Medicare’s rate as payment in full) on a case-by-case basis.

There are certain circumstances in which a provider is required by law to accept assignment. This includes situations in which the person receiving care has both Medicare and Medicaid. And it also applies to certain medical services, including lab tests, ambulance services, and drugs that are covered under Medicare Part B (as opposed to Part D).

In 2021, 98% of American physicians had participation agreements with Medicare, leaving only about 2% who did not accept assignment (either as a nonparticipating provider, or a provider who had opted out of Medicare altogether).

Accepting assignment is something that the medical provider does, whereas assignment of benefits is something that the patient (the Medicare beneficiary) does. To accept assignment means that the medical provider has agreed to accept Medicare’s approved fee as payment in full for services they provide.

Assignment of benefits means that the person receiving care agrees to allow a medical provider to bill Medicare directly, as opposed to having the person receiving care pay the provider and then seek reimbursement from Medicare.

Centers for Medicare and Medicaid Services. Medicare monthly enrollment .

Centers for Medicare and Medicaid Services. Annual Medicare participation announcement .

Centers for Medicare and Medicaid Services. Lower costs with assignment .

Centers for Medicare and Medicaid Services. Find providers who have opted out of Medicare .

Kaiser Family Foundation. How many physicians have opted-out of the Medicare program ?

Center for Medicare Advocacy. Durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) updates .

Centers for Medicare and Medicaid Services. Check the status of a claim .

Centers for Medicare and Medicaid Services. Medicare claims processing manual. Chapter 26 - completing and processing form CMS-1500 data set .

Centers for Medicare and Medicaid Services. Ambulance fee schedule .

Centers for Medicare and Medicaid Services. Prescription drugs (outpatient) .

By Louise Norris Louise Norris has been a licensed health insurance agent since 2003 after graduating magna cum laude from Colorado State with a BS in psychology.

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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.

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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.

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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.

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Related terms.

Exclusion is the process of identifying and removing claims that do not meet the criteria for reimbursement, ensuring compliance and accurate revenue capture.

Single coverage

Single coverage is a healthcare insurance plan that provides benefits to only one individual, typically excluding dependents or other family members.

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What is Assignment of Benefits in Medical Billing

The health care industry has a wide network of health care insurance payers that make payments on behalf of patients having insurance plans. Without insurance plans, many patients would not be able to seek medical services. Whenever a patient visits a doctor for the treatment he/she needs to ensure that the insurance payer makes the payment for all the medical benefits he/she may have received. This is where the assignment of benefits comes in.

Definition of Assignment of Benefits

The term assignment of benefits (AOB) may be referred to as an agreement that transfers the health insurance claims benefits of the policy from the patient to the health care provider. 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.

Understanding of Assignment of Benefits

The assignment of benefits is generally transferred by designing a legal document— for which, the format  may vary across medical offices. This document is called the ‘Assignment of Benefits’ form. 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.

It is important to note that the assignment of benefits occurs only when a claim has been successfully processed with the insurance company/payer. However, the insurance company may not always honor and accept the request for AOB. The acceptance or rejection of AOB depends on the patient’s or member’s health benefits contract and/or the State Law. Therefore all three parties— patient, health care provider, and the insurance company must stay updated with the State Law and also, review the patient’s health benefit plan thoroughly. This will help in saving time and unnecessary paperwork if the chances of the insurance company rejecting the AOB seem to be high.

Following are some providers or medical services that use AOB:

  • Ambulance services.
  • Ambulatory surgical center services.
  • Clinical diagnostic laboratory services.
  • Biological(s) and drugs.
  • Home dialysis equipment and supplies.
  • Physician services for patients having Medicare and Medicaid plans.
  • 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— influenza virus and pneumococcal.

AOB plays an important role in medical billing by establishing direct contact with the patient’s health care insurance payer. The purpose is to increase the chances of reimbursement and accelerate the process without contacting the patient additionally..

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What is an assignment of benefits?

Three people in an office talking over a pile of papers.

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.

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.  

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  

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.

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.

This term refers to insurance payments made directly to a healthcare provider for medical services received by the patient. Assignment of benefits occurs after a claim has been successfully processed with an insurance company.

As Assignment of Benefits (often abbreviated to AOB) simply means that the patient is asking for their payment of their health benefits to be transferred to the doctor to used as payment.

In some medical offices, there is a form known as an ‘Assignment of Benefits’ that allows the patient to transfer these benefits automatically. This reduces the need to bill a fee for service on each transaction, which can be appealing to some patients.

Typically, providers or types of services listed below must accept assignment of benefits:

  • 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 anesthetists, clinical psychologists, and clinical social workers;
  • Ambulatory surgical center 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.  

It is important to note that not every patient has the contracted right to do so. Even if the patient signs as AOB form, the insurance company may not have to honor it if the patient cannot contractually assign their rights to anyone.

As a medical office it is important to understand most of the core insurance plans your office works with and how the patients benefits are typically paid.

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What is Assignment of Benefits (AOB) in Medical Billing

The healthcare sector has an extensive network of payers for health insurance who make payments on behalf of clients with insurance policies. The assignment of benefits is used in this situation. Insurance programs allow many patients to receive medical care. Patients must ensure that their insurance provider covers all medical benefits when they visit the doctor.

Keep reading as we go through everything related to the assignment of benefits in medical billing , including what it comprises and what components it should contain.

What is Assignment of Benefits (AOB)?

The assignment of benefits (AOB) is undoubtedly one of the most significant legal documents that make up the healthcare system. It is an agreement conveying the medical professional’s right to claim medical services and obtain benefits from the patient’s insurance plan. The medical professional receives payment for patient services under this agreement.

Therefore, the insurance payer must pay the doctor when the patient signs this paper allowing payment. Without the AOB, the patient’s sole obligation is to pay the cost of any medical services obtained from the physician before filing a claim with the insurance provider for prompt payment.

Various components of the assignment of benefits (AOB)

Different formats.

AOB must be written considering its complexity because it is an important document. Although it is a legal document, it can be created in various ways because each medical officer or team may use a different structure or style.

Exchange of information

Patients must sign a letter allowing the insurance company to supply the medical practitioner with information to get reimbursed. Thus, by signing this contract, the patient implicitly permits the insurance provider to provide essential information and data to medical providers.

In addition, the signatures attest that the patient has authorized a medical practitioner’s staff member to approach the insurance provider on the patient’s behalf to request the necessary payments as outlined in the contract.

Establishes a line of communication

Thanks to this paperwork, the patients are also released from the obligation to contact the insurance provider or the doctor directly for payment-related issues. He can leave it after allowing both parties to interact with one another and carry out the subsequent actions without being held responsible for making the connection himself.

Transfer of the financial obligation

The benefits assignment occurs once the insurance company/payer’s claim process has been successfully completed. This is the precise moment when the patient shifts payment responsibility to the insurance provider.

Outsourced billing services might be engaged by medical professionals who need help keeping up with the billing. AOB requests might not be approved by the insurance company involved in the specific process; it is necessary to note this.

Rejection may occur for several reasons, including the patient’s health benefits contract clauses or State Law.

Relational to state laws

The doctor, patient, and insurance company must stay abreast of state legislation changes because of this. A single clause modification can generate significant problems with insurance benefits. It is essential to keep up with the evolving state laws and regulations because doing so saves time and reduces paperwork.

The doctor or hospital must analyze each patient’s health benefit program to ensure the claim is accepted. Several things influence the operation of AOB and its success.

These include state legislation, the type of medical services the healthcare provider offers, and the insurance plan the consumer has chosen. The patient gives up his right to bargain with the insurance provider over the provider’s services by signing the AOB.

What should be included in an AOB?

It is crucial to carefully craft the AOB because only one signature establishes a binding legal relationship between the three parties. The elements listed below make up a proper assignment of benefits:

Business’s full name

Even a tiny error in the company’s name that needs compensation can prevent progress and cause unneeded delays. In addition, while preparing the medical billing papers, the business organization’s name must be added with the utmost level of precision in the assignment of benefits.

Even if a provider of outsourced medical billing services is involved in the procedure, it is still required to ensure that the name listed in the contract is correct.

The concept of Irrevocability

The term “irrevocable” is crucial and significant for contracts that establish legal responsibilities. Using this phrase, the patient signifies that they cannot reverse the benefit assignment later.

Demonstration of Rights

The court is instructed by the rights demonstrated in this contract to investigate the advantages paid by the patient to the doctor. These rights are granted to the insurance carrier, which will compensate the healthcare practitioner.

Benefits of Not Paying for Treatment

A provider forfeits their right to demand payment at the time of service in return for the ability to sue the insurance provider if they are not paid in full. The patient will forfeit their right to sue, but payment is unnecessary.

Genuine signature provided by the patients

This is the crucial clause in the contract. The patient must accurately sign this document to be legally binding and establish rights and obligations. Finding the best medical billing service that guarantees prompt payment reimbursement can be challenging.

RCM Matter is the only place to go if you’re looking for a business that can provide adequate medical billing services.

What channel is opened between the patient, doctor, and insurance company thanks to the assignment of benefits?

The benefits assignment permits communication between the insurance company and the doctor for financial matters. By doing this, the patient is released from having direct contact with both parties on payment-related issues.

What happens when the insurance company has processed your claim successfully?

After completing a claim, the insurance provider takes over the patient’s financial responsibilities. This allows the insurance company to pay the doctor directly.

What should a document containing an assignment of benefits have?

The precise name of the medical professional or firm, the word “irrevocable” to indicate that the patient cannot revoke the assignment, a clear display of the rights assigned to the insurance company for payment, and an actual signature by the patient to verify the agreement all need to be required in an assignment of benefits document.

AOB establishes a direct line of communication with the patient’s health insurance payer, playing a significant role in medical billing. The goal is to speed up the process without further contacting the patient while increasing the likelihood that the claim will be reimbursed.

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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, insurance self-service portal: the future of customer experience, blockchain’s impact on transforming the insurance landscape, trending articles.

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What Is Assignment Of Benefits (AOB) In Medical Billing?

The acronym AOB stands mainly for Assignment of Benefits . This is a form of a legal contract signed by the patient asking their health insurer to send reimbursement checks for medical services used directly to the medical billing company office or doctor. Those who sign the AOB contract would simplify the payment process for patients.

It allows healthcare practices to be paid directly by the patient’s insurer without direct patient intervention. This will enable patients to focus on medical care rather than worrying about payment. It also allows the medical billing companies practice to appeal against denials and underpayments from the patient’s insurer.

What Is The AOB Medical Billing Company Community?

This term refers to insurance payments made directly to a medical professional for medical services received by the patient. As a transfer of benefits (often abbreviated as AOB ), it simply means that the patient requests that payment for their health care be passed on to the doctor to use as payment.

What Is Meant By Assignment Of Benefits?

Assignment Of Benefits

A benefit is awarded when a patient signs a document that requires their medical and coding company health insurance provider to pay their doctor or hospital directly. AOBs also play a role in other insurance cases, such as home insurance, but here we are defining the term in the medical benefits industry.

How Does AOB Work?

An assignment of benefits (AOB) is an agreement that transfers insurance rights or benefits to a third party, such as a contractor. They request their services and order the insurance to pay them directly, without your involvement.

Important Details To Include On Form AOB

Specific details should be included in the benefit distribution agreement. Without these details, legal proceedings could be affected. Only a healthcare BPO who fully understands how to fill in the parties can help a doctor’s office complete the AOB forms correctly. Some of these essential requirements are as follows:

1. Accurate personal data:

Personal data, such as the exact name of the patient, the health care provider, and the insurer, must be filled inaccurately.

2. Confirmation Conditions:

The term “irrevocable” should be used in the AOB to confirm that the patient cannot revoke this agreement in the distant future.

3. The Patient’s signature:

Patients must sign the performance agreement. Billing personnel should ensure the patient’s signature on the contract to ensure a smooth legal process.

Disadvantages Of Assignment of Benefits

AOB

Signing the Transfer of Benefits could be disadvantageous to the parties involved in the following ways:

1. Patient Loses the Power to Negotiate:

In situations such as medical emergencies, OON physicians may need to treat the patient. This would result in the medical bill increasing the payment done by the insurance plan . The excess amount of medical bills would not be covered by the insurance plan or the medical billing companies.

Thus, it becomes the complete responsibility of the patient to pay all the charges. If patients do not wish to sign the AOB contract, the additional amount charged on the surprise bill can be negotiated. Upon signing the AOB agreement, the patient loses this bargaining power, as the contract would not require the direct involvement of the patient in the payment process.

2. Hospitals Would Choose OON:

Hospitals would choose to stay out of the network with insurance providers to reap the benefits of getting total payments from patients. Unlike in-network physicians, offline healthcare providers do not have to maintain a standardized quality for their healthcare services rendered. In this way, patients would no longer benefit from the advantages of reducing the contracted network or of quality care for the medical services used.

Healthcare professionals can take advantage of this situation to charge consumers for unnecessary treatments, tests, and procedures to drive up medical bills.

3. Increases Case:

As patients lose the power to intervene in the payment process upon signing an AOB, they transfer certain legal rights to healthcare professionals of medical billing companies. The patient would no longer have the right to sue the doctor. The healthcare provider would have the power to sue the insurer without the knowledge of the patient. This would increase the chances of individual patients being dragged into lawsuits.

The signing of the AOB, on the one hand, increases the convenience of payment for patients; on the other hand, it causes reasons for more significant discomfort to the patient due to the lack of transparency . So. Patients must check with their insurers before signing AOB. This would ensure frictionless execution of the insurance policy plan .

Final Verdict

All in all, patients sometimes have great difficulty understanding the meaning of the assignment of benefits and do not know whether or not to commit. They can only sign on the dotted line after clearly understanding the benefits of doing so. Outsourcing this task to BPO Healthcare can help healthcare practices explain the benefits of signing the AOB form to patients most correctly and securely.

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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

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What is Medicare assignment and how does it work?

Kimberly Lankford,

​Because Medicare decides how much to pay providers for covered services, if the provider agrees to the Medicare-approved amount, even if it is less than they usually charge, they’re accepting assignment.

A doctor who accepts assignment agrees to charge you no more than the amount Medicare has approved for that service. By comparison, a doctor who participates in Medicare but doesn’t accept assignment can potentially charge you up to 15 percent more than the Medicare-approved amount.

That’s why it’s important to ask if a provider accepts assignment before you receive care, even if they accept Medicare patients. If a doctor doesn’t accept assignment, you will pay more for that physician’s services compared with one who does.

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How much do I pay if my doctor accepts assignment?

If your doctor accepts assignment, you will usually pay 20 percent of the Medicare-approved amount for the service, called coinsurance, after you’ve paid the annual deductible. Because Medicare Part B covers doctor and outpatient services, your $240 deductible for Part B in 2024 applies before most coverage begins.

All providers who accept assignment must submit claims directly to Medicare, which pays 80 percent of the approved cost for the service and will bill you the remaining 20 percent. You can get some preventive services and screenings, such as mammograms and colonoscopies , without paying a deductible or coinsurance if the provider accepts assignment. 

What if my doctor doesn’t accept assignment?

A doctor who takes Medicare but doesn’t accept assignment can still treat Medicare patients but won’t always accept the Medicare-approved amount as payment in full.

This means they can charge you up to a maximum of 15 percent more than Medicare pays for the service you receive, called “balance billing.” In this case, you’re responsible for the additional charge, plus the regular 20 percent coinsurance, as your share of the cost.

How to cover the extra cost? If you have a Medicare supplement policy , better known as Medigap, it may cover the extra 15 percent, called Medicare Part B excess charges.

All Medigap policies cover Part B’s 20 percent coinsurance in full or in part. The F and G policies cover the 15 percent excess charges from doctors who don’t accept assignment, but Plan F is no longer available to new enrollees, only those eligible for Medicare before Jan. 1, 2020, even if they haven’t enrolled in Medicare yet. However, anyone who is enrolled in original Medicare can apply for Plan G.

Remember that Medigap policies only cover excess charges for doctors who accept Medicare but don’t accept assignment, and they won’t cover costs for doctors who opt out of Medicare entirely.

Good to know. A few states limit the amount of excess fees a doctor can charge Medicare patients. For example, Massachusetts and Ohio prohibit balance billing, requiring doctors who accept Medicare to take the Medicare-approved amount. New York limits excess charges to 5 percent over the Medicare-approved amount for most services, rather than 15 percent.

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How do I find doctors who accept assignment?

Before you start working with a new doctor, ask whether he or she accepts assignment. About 98 percent of providers billing Medicare are participating providers, which means they accept assignment on all Medicare claims, according to KFF.

You can get help finding doctors and other providers in your area who accept assignment by zip code using Medicare’s Physician Compare tool .

Those who accept assignment have this note under the name: “Charges the Medicare-approved amount (so you pay less out of pocket).” However, not all doctors who accept assignment are accepting new Medicare patients.

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What does it mean if a doctor opts out of Medicare?

Doctors who opt out of Medicare can’t bill Medicare for services you receive. They also aren’t bound by Medicare’s limitations on charges.

In this case, you enter into a private contract with the provider and agree to pay the full bill. Be aware that neither Medicare nor your Medigap plan will reimburse you for these charges.

In 2023, only 1 percent of physicians who aren’t pediatricians opted out of the Medicare program, according to KFF. The percentage is larger for some specialties — 7.7 percent of psychiatrists and 4.2 percent of plastic and reconstructive surgeons have opted out of Medicare.

Keep in mind

These rules apply to original Medicare. Other factors determine costs if you choose to get coverage through a private Medicare Advantage plan . Most Medicare Advantage plans have provider networks, and they may charge more or not cover services from out-of-network providers.

Before choosing a Medicare Advantage plan, find out whether your chosen doctor or provider is covered and identify how much you’ll pay. You can use the Medicare Plan Finder to compare the Medicare Advantage plans and their out-of-pocket costs in your area.

Return to Medicare Q&A main page

Kimberly Lankford is a contributing writer who covers Medicare and personal finance. She wrote about insurance, Medicare, retirement and taxes for more than 20 years at  Kiplinger’s Personal Finance  and has written for  The Washington Post  and  Boston Globe . She received the personal finance Best in Business award from the Society of American Business Editors and Writers and the New York State Society of CPAs’ excellence in financial journalism award for her guide to Medicare.

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What is Assignment of Benefits (AOB) in Medical Billing and What Should An AOB Form Include?

Assignment of Benefits

There are three major components/members of the healthcare industry, including the healthcare provider, the patient getting the medical treatments done and the insurance taking care of the payments. For the entire system to run smoothly, there is a need for each of these parties to be systematic and coherent in their activities. If even a single party showcases incompetency, it may end up affecting the entire system negatively. A major role played in the working of this network and turning it into a great success is the AOB, also known as the Assignment of Benefits in medical billing. 

This article will walk you through everything associated with the assignment of benefits in medical billing, what it entails, and what elements should be a part of it.

Assignment of Benefits

It won’t be wrong to say that assignment of benefits is one of the most crucial documents that are a part of the healthcare system. In simple words, the assignment of benefits refers to an agreement that transfers the insurance claim related to healthcare and the benefits associated with the policy chosen by the patient to the medical practitioner or healthcare provider. This document leads to the transfer of payment to the healthcare provider against all the benefits offered to the patient. Hence, once this document is signed by the patient, the insurance payer is bound to reimburse the medical practitioner. 

In the absence of the AOB, it would be the sole responsibility of the patient to pay the cost of medical services taken from the medical practitioner and then file the claim to the insurance company to make timely reimbursement. 

Elements of The Assignment of Benefits

Varied formats.

Being a crucial document, AOB has to be created keeping in mind the intricacy associated with it. Though it’s a legal document, it comes in various formats as each medical officer or his team may be following a different pattern or format while creating this document. 

Information Sharing 

Patients sign the form allowing the insurance company to let out the relevant information required by the medical caregiver for reimbursement purposes. Hence, once this document is signed by the patient, he indirectly gives the authority to the insurance company to give away the required information and data to the medical practitioners. 

At the same time, the signatures also confirm that the patient has concurred to nominate someone from the medical practitioner’s staff to seek the required payments from the insurance company in the agreement. 

Creates A Communication Channel 

Healthcare

This document also relieves the patients from the requirement to connect with the insurance company or the medical practitioner directly for payment reasons. Once he authorizes both parties to communicate with each other and continue with the following activities, he can come out of it and doesn’t have the liability to connect with them himself. 

Transfer Of The Liability To Pay

Upon successful completion of the claim process with the insurance company/payer, the assignment of benefits occurs. This is the exact time when the patient transfers the liability of payment making to the insurance company. For medical practitioners finding it tough to manage the billings, outsourced billing services can be hired. 

However, at the same time, there is a need to mention that the insurance company, connected with the particular process, may not accept the AOB request. There may be a rejection for various reasons, and most include the patient’s health benefits contract clauses or the State Law. 

Connected To The State Laws

This is why all three parties to the process, the medical practitioner, the patient, and the insurance company must stay updated with the changing state laws. Even a modification of a single clause can lead to extensive problems when it comes to the reimbursement of insurance amounts.  

Staying updated with the changing state laws and rules is necessary as it doesn’t only aid in saving time but also helps in reducing the paperwork. A review of the health benefit plan of each patient is a must for the medical care provider to ensure the claim is not rejected later on. 

Various factors play their role in the working of AOB and turning it into a success. These include the insurance policy taken up by the patient, laws of the state, and the kind of medical procedures offered by the health care provider. By signing the AOB, the patient surrenders his right to negotiate with the insurance company regarding the provider’s services.

What Should Be In An AOB?

As a single signature creates a legal relationship between the three parties, there is a need to compose the AOB with great precision. An appropriate assignment of benefits includes the following elements:

Exact Name Of The Business

Even a minor mistake in the name of the business that requires reimbursement can lead to blocking the entire process and creating unnecessary delays. For that matter, there is a need to showcase the highest level of perfection while adding the name of the business entity in the assignment of benefits while creating the medical billing documents. Even if an Outsourced medical billing services company is involved in the process, it has to make sure that the name used in the contract is accurate. 

The Term ‘Irrevocable’

The term irrevocable is really important and holds great significance in contracts that create legal obligations. This term means that the patient can’t revoke the assignment of benefits later on. 

Showcase Of Rights

Showing rights in this contract tells the court to check out the payments, used as benefits, on behalf of the patient to the medical practitioner. These rights are assigned to the insurance company which will then pay the medical health provider .

Benefits Of Non-Payment While Getting Treated

Medical Billing services

In exchange for the right to sue the insurance company if they are not paid in full, a provider gives up the right to collect payments at the time of service. The patient will give up their right to sue, but will not be required to pay.

Authentic Signature By The Patients

This is probably the most important part of the contract. The patient has to put up his accurate signatures to make this piece of paper a legal entity creating rights and duties. 

Looking for the best medical billing compan y that will ensure timely reimbursmsnt of the payments is indeed tough. If you are searching for a company that would offer you efficient services, there is no place better to go than Zee Medical Billing . 

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Mental health billing, urgent care billing, acupuncture billing services, hospitalist billing services, internal medicine billing, see our all specialties, frequently asked questions.

The assignment of benefits refers to an agreement that transfers the insurance claim and associated benefits from the patient to the medical practitioner or healthcare provider. It allows the medical practitioner to receive reimbursement directly from the insurance payer.

The assignment of benefits simplifies the payment process by shifting the responsibility of payment from the patient to the healthcare provider. It ensures that the medical practitioner receives timely reimbursement from the insurance company.

An assignment of benefits document should include the exact name of the healthcare provider or business entity, the term “irrevocable” to indicate the patient cannot revoke the assignment, a clear showcase of rights assigned to the insurance company for payment, and an authentic signature by the patient to validate the contract.

The assignment of benefits allows authorized communication between the medical practitioner and the insurance company for payment reasons. This relieves the patient from the direct responsibility of connecting with both parties regarding payment matters.

Upon successful claim processing, the assignment of benefits takes effect, transferring the liability of payment from the patient to the insurance company. This allows the medical practitioner to receive payment directly from the insurance company.

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Assignment of Benefits: What It Is, and How It Can Affect your Property Insurance Claim

medical term assignment of benefits

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What is an Assignment of Benefits?

In the context of insured property claims, an assignment of benefits (AOB) is an agreement between you and a contractor in which you give the contractor your right to insurance payments for a specific scope of work .  In exchange, the contractor agrees that it will not seek payment from you for that scope of work, except for the amount of any applicable deductible.  In other words, you give part of your insurance claim to your contractor, and your contractor agrees not to collect from you for part of its work.

The most important thing to know about an assignment of benefits is that it puts your contractor in control your claim , at least for their scope of work.  Losing that control can significantly affect the direction and outcome of your claim, so you should fully understand the implications of an AOB (sometimes called an assignment of claims or AOC) before signing one.

How Does an Assignment of Benefits Work in Practice? 

Let’s say you’re an insured homeowner, and Hurricane Ian significantly damaged your roof.  Let’s also assume your homeowner’s policy covers that damage.  A roofer, after inspecting your roof and reviewing your insurance policy, might conclude that your insurer is probably going to pay for a roof replacement under your insurance policy.  The only problem is that it’s early in the recovery process, and your insurer hasn’t yet stated whether it will pay for the roof replacement proposed by your contractor. So if you want your roof replaced now, you would ordinarily agree to pay your roofer for the replacement, and wait in hopes that your insurer reimburses you for the work.  This means that if your insurance company refuses to pay or drags out payment, you’re on the hook to your roofer for the cost of the replacement.

As an alternative to agreeing to pay your roofer for the full cost of the work, you could sign an assignment of benefits for the roof replacement.  In this scenario, your roofer owns the part of your insurance claim that pertains to the roof replacement.  You might have to pay your roofer for the amount of your deductible, but you probably don’t have to pay them for the rest of the cost of the work.  And if your insurance company refuses to pay or drags out payment for the roof replacement, it’s your roofer, and not you, who would be on the hook for that shortfall.

So should you sign an AOB?  Not necessarily.  Read below to understand the pros and cons of an assignment of benefits.

Are There any Downsides to Signing an Assignment of Benefits?

Yes.  

You lose control of your claim . This is the most important factor to understand when considering whether to sign an AOB.  An AOB is a formal assignment of your legal rights to payment under your insurance contract.  Unless you’re able to cancel the AOB, your contractor will have full control over your claim as it relates to their work. 

To explain why that control could matter, let’s go back to the roof replacement example.  When you signed the AOB, the scope of work you agreed on was to replace the roof.  But you’re not a roofing expert, so you don’t know whether the costs charged or the materials used by the roofer in its statement of work are industry appropriate or not.  In most cases, they probably are appropriate, and there’s no problem.  But if they’re not – if, for instance, the roofer’s prices are unreasonably high – then the insurer may not approve coverage for the replacement.  At that point, the roofer could lower its prices so the insurer approves the work, but it doesn’t have to, because it controls the claim .  Instead it could hold up work and threaten to sue your insurer unless it approves the work at the originally proposed price.  Now the entire project is insnared in litigation, leaving you in a tough spot with your insurer for your other claims and, most importantly, with an old leaky roof.

Misunderstanding the Scope of Work.   Another issue that can arise is that you don’t understand the scope of the assignment of benefits.  Contractor estimates and scopes of work are often highly technical documents that can be long on detail but short on clarity.  Contractors are experts at reading and writing them.  You are not.  That difference matters because the extent of your assignment of benefits is based on that technical, difficult-to-understand scope of work.  This can lead to situations where your understanding of what you’re authorizing the contractor to do is very different from what you’ve actually authorized in the AOB agreement.

In many cases, it’s not necessary .   Many contractors will work with you and your insurer to provide a detailed estimate of their work, and will not begin that work until your insurer has approved coverage for it.  This arrangement significantly reduces the risk of you being on the hook for uninsured repairs, without creating any of the potential problems that can occur when you give away your rights to your claim.

Do I have to sign an Assignment of Benefits?

No.  You are absolutely not required to sign an AOB if you do not want to. 

Are There any Benefits to Signing an Assignment of Benefits?

Potentially, but only if you’ve fully vetted your contractor and your claim involves complicated and technical construction issues that you don’t want to deal with. 

First, you must do your homework to fully vet your contractor!  Do not just take their word for it or be duped by slick ads.  Read reviews, understand their certificate of insurance, know where they’re located, and, if possible, ask for and talk to references.  If you’ve determined that the contractor is highly competent at the work they do, is fully insured, and has a good reputation with customers, then that reduces the risk that they’ll abuse their rights to your claim.

Second, if your claim involves complicated reconstruction issues, a reputable contractor may be well equipped to handle the claim and move it forward.  If you don’t want to deal with the hassle of handling a complicated claim like this, and you know you have a good contractor, one way to get rid of that hassle is an AOB.

Another way to get rid of the hassle is to try Claimly, the all-in-one claims handling tool that get you results but keeps you in control of your claim.  

Can my insurance policy restrict the use of AOBs?

Yes, it’s possible that your Florida insurance policy restricts the use of AOBs, but only if all of the following criteria are met:

  • When you selected your coverage, your insurer offered you a different policy with the same coverage, only it did not restrict the right to sign an AOB.
  • Your insurer made the restricted policy available at a lower cost than the unrestricted policy.
  • If the policy completely prohibits AOBs, then it was made available at a lower cost than any policy partially prohibiting AOBs.
  • The policy includes on its face the following notice in 18-point uppercase and boldfaced type:

THIS POLICY DOES NOT ALLOW THE UNRESTRICTED ASSIGNMENT OF POST-LOSS INSURANCE BENEFITS. BY SELECTING THIS POLICY, YOU WAIVE YOUR RIGHT TO FREELY ASSIGN OR TRANSFER THE POST-LOSS PROPERTY INSURANCE BENEFITS AVAILABLE UNDER THIS POLICY TO A THIRD PARTY OR TO OTHERWISE FREELY ENTER INTO AN ASSIGNMENT AGREEMENT AS THE TERM IS DEFINED IN SECTION 627.7153 OF THE FLORIDA STATUTES.

627.7153. 

Pro Tip : If you have an electronic copy of your complete insurance policy (not just the declaration page), then search for “policy does not allow the unrestricted assignment” or another phrase from the required language above to see if your policy restricts an AOB.  If your policy doesn’t contain this required language, it probably doesn’t restrict AOBs.

Do I have any rights or protections concerning Assignments of Benefits?

Yes, you do.  Florida recently enacted laws that protect consumers when dealing with an AOB.

Protections in the AOB Contract

To be enforceable, a Assignments of Benefits must meet all of the following requirements:

  • Be in writing and executed by and between you and the contractor.
  • Contain a provision that allows you to cancel the assignment agreement without a penalty or fee by submitting a written notice of cancellation signed by the you to the assignee:
  • at least 30 days after the date work on the property is scheduled to commence if the assignee has not substantially performed, or
  • at least 30 days after the execution of the agreement if the agreement does not contain a commencement date and the assignee has not begun substantial work on the property.
  • Contain a provision requiring the assignee to provide a copy of the executed assignment agreement to the insurer within 3 business days after the date on which the assignment agreement is executed or the date on which work begins, whichever is earlier.
  • Contain a written, itemized, per-unit cost estimate of the services to be performed by the assignee .
  • Relate only to work to be performed by the assignee for services to protect, repair, restore, or replace a dwelling or structure or to mitigate against further damage to such property.
  • Contain the following notice in 18-point uppercase and boldfaced type:

YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER YOUR INSURANCE POLICY TO A THIRD PARTY, WHICH MAY RESULT IN LITIGATION AGAINST YOUR INSURER. PLEASE READ AND UNDERSTAND THIS DOCUMENT BEFORE SIGNING IT. YOU HAVE THE RIGHT TO CANCEL THIS AGREEMENT WITHOUT PENALTY WITHIN 14 DAYS AFTER THE DATE THIS AGREEMENT IS EXECUTED, AT LEAST 30 DAYS AFTER THE DATE WORK ON THE PROPERTY IS SCHEDULED TO COMMENCE IF THE ASSIGNEE HAS NOT SUBSTANTIALLY PERFORMED, OR AT LEAST 30 DAYS AFTER THE EXECUTION OF THE AGREEMENT IF THE AGREEMENT DOES NOT CONTAIN A COMMENCEMENT DATE AND THE ASSIGNEE HAS NOT BEGUN SUBSTANTIAL WORK ON THE PROPERTY. HOWEVER, YOU ARE OBLIGATED FOR PAYMENT OF ANY CONTRACTED WORK PERFORMED BEFORE THE AGREEMENT IS RESCINDED. THIS AGREEMENT DOES NOT CHANGE YOUR OBLIGATION TO PERFORM THE DUTIES REQUIRED UNDER YOUR PROPERTY INSURANCE POLICY.

  • Contain a provision requiring the assignee to indemnify and hold harmless the assignor from all liabilities, damages, losses, and costs, including, but not limited to, attorney fees.

Contractor Duties

Under Florida law, a contractor (or anyone else) receiving rights to a claim under an AOB:

  • Must provide you with accurate and up-to-date revised estimates of the scope of work to be performed as supplemental or additional repairs are required.
  • Must perform the work in accordance with accepted industry standards.
  • May not seek payment from you exceeding the applicable deductible under the policy unless asked the contractor to perform additional work at the your own expense.
  • Must, as a condition precedent to filing suit under the policy, and, if required by the insurer, submit to examinations under oath and recorded statements conducted by the insurer or the insurer’s representative that are reasonably necessary, based on the scope of the work and the complexity of the claim, which examinations and recorded statements must be limited to matters related to the services provided, the cost of the services, and the assignment agreement.
  • Must, as a condition precedent to filing suit under the policy, and, if required by the insurer, participate in appraisal or other alternative dispute resolution methods in accordance with the terms of the policy.
  • If the contractor is making emergency repairs, the assignment of benefits cannot exceed the greater of $3,000 or 1% of your Coverage A limit.

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Biden Rolls Back Trump-Era Expansion of Short-Term Health Insurance Plans

The rule also requires health insurance companies to be more transparent about health plans

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The Biden administration announced March 28 it finalized a rule to roll back a Trump-era regulation that extended short-term health insurance plans, cracking down on what some refer to as “junk plans.”

The rule, first introduced in July, places tighter restrictions on the plans.

Short-term health plans, which generally were designed to fill temporary gaps in coverage when an individual is transitioning from one source of coverage to another, were expanded in 2018 by President Donald Trump and touted as a cheaper alternative to the Affordable Care Act (ACA). That expansion allowed those plans to be offered for up to three years. Critics said this has misled consumers into thinking they were buying comprehensive health insurance, even though they often didn’t have coverage for pre-existing medical conditions.

The final rule limits the duration of the insurance plans to three months, with the option of a one-month extension. Significantly, it also requires that the plans provide consumers with clear explanations of their benefits and inform them of how to find more comprehensive coverage.

“HHS is cracking down on junk insurance plans to help consumers make informed choices and avoid mistakenly paying for a plan that does not provide them the coverage or protection they expect,” said Health and Human Services Secretary Xavier Becerra.

However, some Republicans are critical of the short-term health plan final rule, including Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC), who said in a statement: “Short-term health insurance and other nontraditional coverage arrangements provide patients with more portability, options, and flexibility than other insurance options available through the ACA individual market. I remain opposed to any efforts by this administration to limit affordable coverage options or otherwise force Americans to be without insurance.”

SHRM Online rounded up additional articles on the topic.

Not Subject to ACA

Unlike most health insurance plans, short-term plans are not subject to consumer protections under the ACA, including guaranteeing coverage for people with pre-existing conditions.

They are also free from the law’s requirement that plans offer a minimum set of benefits, like prescription drug coverage and maternity care.

Democrats refer to the short-term, limited-duration plans as “junk” insurance, and the Obama-era policy was meant to ensure that healthy consumers could not use that option to sidestep the ACA’s marketplaces, leaving a sicker pool of customers enrolling in the comprehensive plans offered under the health law.

( The New York Times )

More Transparency

The Biden administration’s final rules require health insurers to be clear and upfront about the plans consumers buy. Short-term plans, as well as "fixed indemnity" insurance policies that provide a fixed cash payment for a healthcare event, will have to include a clear, easy-to-understand consumer notice on marketing, application, enrollment and re-enrollment materials.

The final rules increase transparency while helping to ensure that consumers do not mistakenly enroll in these types of insurance plans as substitutes for comprehensive coverage, according to the Centers for Medicare & Medicaid Services.

( Healthcare Finance )

Political Battle

The move is in part an effort by President Biden to distinguish his approach to health care with that of Trump, who is the presumptive Republican presidential nominee. During his administration, Trump extended the duration of short-term health insurance plans, in part, in an effort to weaken the ACA.

Overall, the White House contends that Biden is trying to reduce costs for consumers.

( Associated Press )

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  • Final regulations: Definitions of short-term, limited-duration insurance and excepted benefits coverage

Intended to more clearly distinguish STLDI and fixed indemnity excepted benefits coverage from comprehensive coverage

Intended to more clearly distinguish STLDI and fixed indemnity excepted benefits coverage

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The U.S. Treasury Department and IRS—along with the Department of Labor and the Department of Health and Human Services—today released final regulations (T.D. 9990) that amend the definition of “short-term, limited-duration insurance” (STLDI), which is excluded from the definition of “individual health insurance coverage” under the Public Health Service Act. The final regulations also amend the requirements for hospital indemnity or other fixed indemnity insurance to be considered an excepted benefit in the group and individual health insurance markets.

The amendments in the final regulations are intended to more clearly distinguish STLDI and fixed indemnity excepted benefits coverage from comprehensive coverage, and increase consumer awareness of coverage options that include the full range of federal consumer protections and requirements.

The proposed regulations also included rules that would clarify the tax treatment of certain benefit payments in fixed amounts received under employer-provided accident and health plans that are paid without regard to the amount of medical expenses incurred (read TaxNewsFlash ). However, the preamble to the final regulations states that more time is needed to study the issues and concerns raised by the comments received on those proposed rules, so they were not finalized in the final regulations.

The final regulations are effective on the date that is 75 days after the final regulations are published in the Federal Register (which is scheduled to be April 3, 2024).

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Biden Administration Finalizes Rule Curbing Use of Short-Term Health Plans

The new regulation reverses a Trump-era policy that expanded access to health plans with fewer benefits than those sold on the Affordable Care Act’s marketplaces.

A man rides a bicycle on a street past signs advertising Obamacare and insurance.

By Noah Weiland

Reporting from Washington

The Biden administration announced on Thursday that it had finalized a new regulation that curbs the use of short-term health insurance plans that do not comply with the Affordable Care Act, reversing a move by the Trump administration to give consumers more access to cheaper but skimpier plans.

Under the new rule , the short-term plans will be able to last for only 90 days, with an option for a one-month extension.

In 2018, the Trump administration issued a rule allowing the plans to last for just under a year , with the option of renewing them for a total duration of up to three years. Previously, under an Obama-era policy, the plans were required to last for less than three months.

The plans, often with lower premiums than those found on the Affordable Care Act’s marketplaces, do not have to cover people with pre-existing conditions. They are also free from the health law’s requirement that plans offer a minimum set of benefits, like prescription drug coverage and maternity care.

Democrats deride the so-called short-term, limited-duration plans as “junk” insurance, and the Obama-era policy was meant to ensure that healthy consumers could not use that option to sidestep the Affordable Care Act’s marketplaces, leaving a sicker pool of customers enrolling in the comprehensive plans offered under the health law.

The White House cast the new rule as a way to fortify the marketplaces. In a briefing with reporters on Wednesday, Neera Tanden, President Biden’s domestic policy adviser, said that 45 million Americans were now covered through the marketplaces or the expansion of Medicaid under the Affordable Care Act. More than 20 million people signed up for plans on the marketplaces during the most recent open enrollment period.

“President Biden is not taking his foot off the gas,” Ms. Tanden said.

Supporters of the short-term plans have said that the less expensive options are well suited for people who are unable to afford a marketplace plan. Brian Blase, who worked on the 2018 rule as a White House official under President Donald J. Trump, said the plans were also ideal for contract and self-employed workers, including those with incomes too high to qualify for more generous subsidies on the Affordable Care Act’s marketplaces.

Mr. Blase said the new rule could cause insurers offering marketplace plans to face less competition. Sick consumers buying a three-month plan could also lose coverage without a better immediate option, he added.

“Nobody benefits,” he said.

But critics of the short-term plans have warned that insurers can mislead consumers who enroll in them, including people who might be eligible for free coverage through the marketplaces. The new regulation requires insurers to provide a disclaimer explaining what the short-term plans cover.

In its announcement on Thursday, the White House cited a man in Montana who accumulated over $40,000 in health costs because his cancer was considered a pre-existing condition, and a woman in Pennsylvania who underwent an amputation and received roughly $20,000 in bills that her plan would not cover.

Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms, said the plans often showed up prominently when consumers searched online for health insurance, with deceptive advertising.

“Often the marketing materials say they cover hospitalizations and prescription drugs,” she said. “To the average consumer it looks like a real health insurance plan.”

Georgetown researchers last year conducted a so-called secret shopper study , calling 20 sales representatives to ask about health plans for people who had lost Medicaid coverage and were eligible for free marketplace plans. They found that none of the representatives mentioned the availability of the free plans. The brokers often used aggressive and misleading tactics to sell short-term plans without providing written plan information, the researchers found.

Ms. Corlette said that brokers typically received higher commissions for selling short-term plans than they did for more comprehensive options.

As a consumer, she said, “you have to be so savvy and careful.”

After the Trump administration issued its rule in 2018, some states moved on their own to limit the sale of short-term plans. Democratic lawmakers urged the Biden administration to reverse the regulation, and the administration issued a proposed rule to do so last summer.

Noah Weiland writes about health care for The Times. More about Noah Weiland

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Does Fasting Have Mental Health Benefits?

Some evidence shows it may help boost mood and stave off anxiety.

Wendy Wisner is a health and parenting writer, lactation consultant (IBCLC), and mom to two awesome sons.

medical term assignment of benefits

Steven Gans, MD is board-certified in psychiatry and is an active supervisor, teacher, and mentor at Massachusetts General Hospital.

medical term assignment of benefits

lacaosa/Getty Images

What Is Fasting, Exactly?

Effects of fasting on mental health and emotional well-being, fasting and brain function, fasting and mental disorders, practical tips for safely fasting, risks of fasting.

Fasting seems to be a bit of a health craze these days, with proponents of it guaranteeing all kinds of results, from quick weight loss to boosted mental clarity. Here’s the thing: there’s actually some solid evidence that intermittent fasting as a dietary intervention has health benefits, including reductions in body weight, cholesterol, blood sugar, and blood pressure. The question is: can fasting have positive effects on our mental health?

While there is some preliminary research linking fasting to improved moods, vitality, decreased irritability, lowered stress and even a reduction in  depression and anxiety , there are other studies that show that short-term fasting can increase depression, anxiety, anger and irritability. The available research is relatively new and based on small sample sizes.

Still, many people who’ve tried it report that fasting often gives their mental health a needed boost.

Let’s take a closer look at the mental health effects of fasting, including benefits, risks, and how to do it, along with some expert guidance along the way.

First, it’s helpful to understand what fasting is. Fasting as a mindful dietary choice isn’t all about arbitrarily skipping meals or going without food for days on end. People who fast for health and well being do so deliberately, following one of several methods.

The most common type of fasting is intermittent fasting, which may take several different forms. Many people who practice intermittent fasting go for 12-18 hours each day without eating, and also have a 6-12 hour period where they do eat.

This eating period generally takes place in the daytime hours, and most of the fasting period takes place at night. For many people, intermittent fasting simply means skipping breakfast or having mealtime end early in the evening, along with no nighttime snacking.

Another type of intermittent fasting involves fasting for longer periods, but only doing so several days a week. For example, in alternate-day fasting, people restrict their calories by about 25%, but only do this every other day, and eat normally on the other days. Other similar plans include the 5:2 plan, which is where you fast (or reduce calories significantly) two days a week but eat normally on the other days.

So, does fasting have any positive effects on mental health and emotional well being?

From what we know right now, it’s a bit of a mixed bag, says Clifford Feldman, MD, psychiatrist and medical director at Solace Treatment Center . “Fasting can have a variety of effects on mental health, depending on the length of the fast, the frequency of fasting, and an individual's overall health and lifestyle,” Dr. Feldman.

As Dr. Feldman notes, there’s some research pointing to the fact that short term fasting can sometimes actually increase symptoms of depression, anxiety, anger , irritability, and stress. “However, some studies indicate that, with proper management, fasting can improve mood and emotional well-being in certain situations,” Dr. Feldman says.

Ila Dayananda, MD, MPH, OB-GYN and chief medical officer of Oula Health, agrees that fasting can have a positive effect on mental health, but it varies from one person to another.

Fasting can have positive and negative impacts on mental health, depending on such factors as individual health status, duration of fasting, and frequency.

Dr. Dayananda says that the benefits may vary based on what type of fasting you do. Shorter fasting periods “may improve mental clarity and focus for some individuals,” she says. At the same time, “prolonged or extreme fasting may contribute to mood disturbances and cognitive impairments,” Dr. Dayananda  notes.

There’s some pretty fascinating info out there about how putting your body in a fasting state can affect the brain—and in turn, how this might affect mental health.

Fasting affects brain function in a few different ways, Dr. Feldman says. It has been linked to neurogenesis or the development of new neurons, which can improve brain health and cognitive function.

Additionally, fasting increases something known as brain-derived neurotrophic factor (BDNF). BDNF is important for learning, memory, and mood regulation , Dr. Feldman says.

Together, these brain changes “may contribute to improved cognitive performance and resilience to stress and depression,” he says.

Fasting impacts brain function via various mechanisms, says Dr. Dayananda, including “changes in neurotransmitter levels, alterations in energy metabolism, and activation of cellular repair processes such as autophagy,” she describes. “By promoting ketone production, fasting provides an alternative energy source for the brain, which may enhance cognitive function and protect against neurodegenerative diseases.”

Finally, fasting triggers cellular stress responses, and these responses “activate adaptive pathways, increasing neuronal resilience and improving overall brain health,” Dr. Dayananda explains.

It’s clear that fasting can be helpful for certain folks in terms of improving mood and boosting cognition, but can it improve specific mental health disorders?

This is also an area where research is still new and not entirely conclusive.  Ozan Toy, MD , psychiatrist and chief medical Officer at Telapsychiatry, says that fasting definitely has specific mental health benefits and may be able to improve some of the symptoms of mental health issues such as anxiety, stress, mood, and cognition in some individuals.

But when it comes to specific disorders, research is not robust enough yet. “Fasting is being researched to help treat mood and other disorders, but there is not enough evidence to support this as a treatment yet,” Dr. Toy says.

Indeed, a 2021 systematic review and meta-analysis found that fasting could relieve some of the symptoms of anxiety and depression, but the study researchers warned that there were several caveats to keep in mind, including that the studies were only preliminary and that no studies were conducted specifically in psychiatric populations.

As Dr. Feldman notes, there’s been research on the practice of fasting during Ramadan, a religious Muslim holiday marked by a month of fasting. A 2023 study linked Ramadan fasting to reduced interpersonal sensitivity and phobic anxiety, for example. However it is also important to note that some research has found that fasting during Ramadan was associated with a higher recurrence rate in patients with bipolar disorder.

These advantages could stem from the sense of accomplishment and self-discipline that fasting fosters, as well as physiological changes that occur during fasting, such as changes in brain chemistry that can improve mood and stress resilience.

Again, though, at this time fasting is not prescribed by doctors or psychiatrists as a method of addressing mental health disorders like  phobias , anxiety, depression, or any other mood disturbances.

While fasting isn’t for everyone—and anyone who is interested in trying it should check with a healthcare professional first—it does show some promise in terms of helping with mood, mental clarity, and emotional well being for some people.

Getting started with fasting can feel confusing and overwhelming, which is another reason why it makes sense to seek guidance from a healthcare professional or dietician before trying it. It’s important that you stay hydrated while fasting and that you stop immediately if you show signs of disorientation, confusion, feelings of dizziness, faintness or the new onset of any physical or mental symptoms.

Dr. Dayananda shared her top tips for newbies starting to fast:

  • Start slow, trying gradual restrictions and fasting/eating windows
  • Once you get the hang of it, try to stay consistent in terms of the windows you choose
  • Pay attention to what you eat in your eating window, focusing on nutrient-rich food that will sustain and energize you
  • Be patient with yourself as you transition toward longer fasting windows
  • Remember that it takes time for the body to adapt
  • Keep in mind that everyone is different and it’s up to each of us to decide what works best for our body, in terms of how long to fast, what type of fasting to try, and whether to continue fasting at all

While fasting—especially the less extreme version of fasting, such as intermittent fasting—is generally safe, it’s not for everyone.

“People with certain medical conditions such as diabetes could run into problems associated with hypoglycemia that could have serious consequences,” Dr. Toy says. “Furthermore if someone is suffering from an eating disorder, fasting could also be a risky intervention in this patient population as well.”

Dr. Dayananda doesn’t recommend fasting to certain groups, like pregnant women and children. “Pregnant women, for example, need to be selective and thorough about their nutritional needs as they eat and drink for two,” she says. “Asking them to fast while pregnant could be uncomfortable or, at worst, dangerous, and therefore not worth the risk.”

Additionally, as Dr. Feldman emphasizes, anyone experiencing an acute mental health crisis should not turn to fasting as a solution. “Fasting without proper guidance or consideration of one's health status can result in dehydration, nutrient deficiencies, worsening of mental health symptoms, and disrupted sleep patterns,” he says.

The Bottom Line

While it’s clear that fasting has several potential health benefits, including lowered glucose, blood pressure, cholesterol, and the ability to help maintain a healthy weight, it’s less clear how it impacts mental health.

There is some preliminary evidence that fasting can improve mood, enhance mental clarity, lower stress, reduce symptoms of anxiety and depression. But we are not at a place yet where mental health professionals are recommending fasting as a treatment for mental health issues.

At the same time, many people have found fasting to be beneficial for their mental health and overall well being. For most of us, there’s no harm in trying fasting, especially if eased into gradually, with a focus on nutrient dense food during eating windows. Still, pregnant folks, children, people with a history of eating disorders, and people with certain underlying medical conditions shouldn’t fast.

If you have questions about whether fasting is right for you, don’t hesitate to reach out to your healthcare provider.

Li Z, Heber D. Intermittent Fasting . JAMA . 2021;326(13):1338. doi:10.1001/jama.2020.15140

Wang Y, Wu R. The Effect of Fasting on Human Metabolism and Psychological Health . Dis Markers . 2022;2022:5653739. doi:10.1155/2022/5653739

Berthelot E, Etchecopar-Etchart D, Thellier D, et al. Fasting Interventions for Stress, Anxiety and Depressive Symptoms: A Systematic Review and Meta-Analysis . Nutrients . 2021;13(11):3947. doi:10.3390/nu13113947

Baik SH, Rajeev V, Fann DY, et al. Intermittent fasting increases adult hippocampal neurogenesis . Brain Behav . 2020;10(1):e01444. doi:10.1002/brb3.1444

Longo VD, Mattson MP. Fasting: molecular mechanisms and clinical applications . Cell Metab . 2014;19(2):181-192. doi:10.1016/j.cmet.2013.12.008

Akan M, Unal S, Gonenir Erbay L, et al. The effect of Ramadan fasting on mental health and some hormonal levels in healthy males . Egypt J Neurol Psychiatry Neurosurg. 2023;59:20. doi:10.1186/s41983-023-00623-9

By Wendy Wisner Wendy Wisner is a health and parenting writer, lactation consultant (IBCLC), and mom to two awesome sons.

medical term assignment of benefits

Ex-Hogan Lovells Lawyer Loses Disability Pay Suit Against Unum

By Jacklyn Wille

Jacklyn Wille

A former Hogan Lovells LLP attorney with fibromyalgia lost her lawsuit seeking long-term disability benefits from Unum Life Insurance Co. of America .

Unum appropriately handled the attorney’s benefits claim by consulting with four different physicians and obtaining two vocational reviews analyzing her ability to do her job, Magistrate Judge Gina L. Simms said in a March 29 opinion . There’s ample evidence Unum considered all relevant aspects of the attorney’s claim, including her subjective complaints of pain, Simms said.

Kelly Balkin’s lawsuit , filed in 2021 in the US District Court for the District of Maryland, said Unum incorrectly ...

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  1. Assignment Of Benefits Form

    medical term assignment of benefits

  2. What Is Assignment Of Benefits In Medical Billing

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  3. Medicare Beneficiaries Assignment of Benefits Form

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  5. Assignment Of Benefits Form Template

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  1. Assignment of Benefits in Medical Billing CMS1500 BOX#13 #cms #healthcare #medicalbilling #claim

  2. Medical Terminology

  3. Medical Terminology

  4. Medical Billing Terminology, Acronyms, & Abbreviations

  5. Medical Terminology

  6. Medical Terminology: Suffixes

COMMENTS

  1. Medicare Assignment: What It Is and How It Works

    For Medicare beneficiaries, assignment of benefits means that the person receiving care agrees to allow a nonparticipating provider to bill Medicare directly (as opposed to having the person receiving care pay the bill up front and seek reimbursement from Medicare). Assignment of benefits is authorized by the person receiving care in Box 13 of ...

  2. 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 ...

  3. 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 ...

  4. What is Assignment of Benefits in Medical Billing

    The term assignment of benefits (AOB) may be referred to as an agreement that transfers the health insurance claims benefits of the policy from the patient to the health care provider. 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.

  5. 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 ...

  6. 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.

  7. Assignment and Non-assignment of Benefits

    Non-assignment of Benefits. Non-assigned is the method of reimbursement a physician/supplier has when 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 ...

  8. Assignment and 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.

  9. 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.

  10. What is an Assignment of Benefits (AOB) in Medical Billing?

    Assignment of benefits occurs after a claim has been successfully processed with an insurance company. As Assignment of Benefits (often abbreviated to AOB) simply means that the patient is asking for their payment of their health benefits to be transferred to the doctor to used as payment. In some medical offices, there is a form known as an ...

  11. What is Assignment of Benefits (AOB) in Medical Billing

    The assignment of benefits (AOB) is undoubtedly one of the most significant legal documents that make up the healthcare system. It is an agreement conveying the medical professional's right to claim medical services and obtain benefits from the patient's insurance plan. The medical professional receives payment for patient services under ...

  12. What is Assignment of Benefits (AOB)?

    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 ...

  13. What Is Assignment Of Benefits (AOB) In Medical Billing?

    The acronym AOB stands mainly for Assignment of Benefits.This is a form of a legal contract signed by the patient asking their health insurer to send reimbursement checks for medical services used directly to the medical billing company office or doctor. Those who sign the AOB contract would simplify the payment process for patients.. It allows healthcare practices to be paid directly by the ...

  14. 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.

  15. 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.

  16. PDF CONSENT TO TREATMENT, ASSIGNMENT OF BENEFITS AND ...

    Deductible: The amount you pay for your healthcare services (excluding monthly premiums) before your health insurance begins to pay. For example, if your plan has a $2,000 annual deductible, you will be expected to pay the first $2,000 toward your health care services. After you reach $2,000, your health insurance will cover the rest of the cost.

  17. assignment of benefits

    assignment of benefits: A method where the person receiving medical benefits assigns the payment of those benefits to a physician or hospital.

  18. 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 ...

  19. WHAT IS ASSIGNMENT OF BENEFITS?

    Illinois Insurance law directs Health Insurance companies to pay all claims within 30 days. Yet, some companies choose to take months to pay valid claims. If your insurance company practices these unfair and illegal tactics, we will help you file your claim, but we will NOT accept assignment of your benefits.

  20. What Is Medicare Assignment and How Does It Affect You?

    All providers who accept assignment must submit claims directly to Medicare, which pays 80 percent of the approved cost for the service and will bill you the remaining 20 percent. You can get some preventive services and screenings, such as mammograms and colonoscopies, without paying a deductible or coinsurance if the provider accepts assignment.

  21. Assignment of Benefits (AOB) in Medical Billing

    An assignment of benefits document should include the exact name of the healthcare provider or business entity, the term "irrevocable" to indicate the patient cannot revoke the assignment, a clear showcase of rights assigned to the insurance company for payment, and an authentic signature by the patient to validate the contract.

  22. Assignment of Benefits: What It Is, and How It Can Affect your ...

    In the context of insured property claims, an assignment of benefits (AOB) ... POST-LOSS PROPERTY INSURANCE BENEFITS AVAILABLE UNDER THIS POLICY TO A THIRD PARTY OR TO OTHERWISE FREELY ENTER INTO AN ASSIGNMENT AGREEMENT AS THE TERM IS DEFINED IN SECTION 627.7153 OF THE FLORIDA STATUTES. 627.7153.

  23. Biden Rolls Back Trump-Era Expansion of Short-Term Health ...

    i Reuse Permissions. The Biden administration announced March 28 it finalized a rule to roll back a Trump-era regulation that extended short-term health insurance plans, cracking down on what some ...

  24. When Medicaid Comes After the Family Home

    Federal law requires states to seek reimbursement from the assets, usually homes, of people who died after receiving benefits for long-term care. By Paula Span The letter came from the state ...

  25. Definitions of short-term, limited-duration insurance

    March 28, 2024. The U.S. Treasury Department and IRS—along with the Department of Labor and the Department of Health and Human Services—today released final regulations (T.D. 9990) that amend the definition of "short-term, limited-duration insurance" (STLDI), which is excluded from the definition of "individual health insurance ...

  26. Biden Administration Finalizes Rule Curbing Use of Short-Term Health

    The Biden administration announced on Thursday that it had finalized a new regulation that curbs the use of short-term health insurance plans that do not comply with the Affordable Care Act ...

  27. Assignment of Benefits

    Assignment of benefits is not authorization to submit claims. It is important to note that the beneficiary signature requirements for submission of claims are separate and distinct from assignment of benefits requirements except where the beneficiary died before signing the request for payment for a service furnished by a supplier and the supplier accepts assignment for that service.

  28. Does Fasting Have Mental Health Benefits?

    Fasting can have positive and negative impacts on mental health, depending on such factors as individual health status, duration of fasting, and frequency. — ILA DAYANANDA, MD, MPH, OB-GYN. Dr. Dayananda says that the benefits may vary based on what type of fasting you do. Shorter fasting periods "may improve mental clarity and focus for ...

  29. Texas kicked retirees off Medicare benefits by mistake

    State employees blow whistle on errors they say are kicking thousands off Medicaid. Ed, a 69-year-old retiree in Austin, lives off $970 a month from Social Security. He is also enrolled in ...

  30. Ex-Hogan Lovells Lawyer Loses Disability Pay Suit Against Unum

    A former Hogan Lovells LLP attorney with fibromyalgia lost her lawsuit seeking long-term disability benefits from Unum Life Insurance Co. of America.. Unum appropriately handled the attorney's benefits claim by consulting with four different physicians and obtaining two vocational reviews analyzing her ability to do her job, Magistrate Judge Gina L. Simms said in a March 29 opinion.