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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 Norris is a licensed health insurance agent, book author, and freelance writer. She graduated magna cum laude from Colorado State University.

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.

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Insurance claims , medical revenue recovery, what should an assignment of benefits form include.

An assignment of benefits form (AOB) is a crucial document in the healthcare world. It is an agreement by which a patient transfers the rights or benefits under their insurance policy to a third-party – in this case, the medical professional who provides services. This way, the medical provider can file a claim and collect insurance payments. In the context of personal injury protection coverage, an AOB is a critical step in the reimbursement process.

Personal injury protection coverage , or PIP, is designed to cover medical expenses and lost wages incurred after an auto accident, regardless of who is at fault. In New Jersey, drivers are required to carry PIP. Now, let’s say there’s an accident: the driver sees a medical provider for treatment, and the provider bills the patient’s carrier. There is nothing that requires that the insurance carrier to pay the provider.

This is why an assignment of benefits form is so important. It essentially removes the patient from the equation and puts the medical provider in their place as far as the insurance policy is concerned. This enables the provider to be paid directly. If you see PIP patients and want to be paid directly by the insurer (and avoid claim denials or complex legal situations later) you must get an AOB.

The AOB authorization creates a legal relationship between the provider and the insurance carrier. What should it include?

Correct Business Entity

Fill out your business name correctly: it seems simple, but this can be a stumbling block to reimbursement. If your business name is Dr. Smith’s Chiropractic Care Center, you cannot substitute Dr. Smith’s, Smith’s Chiropractic, etc. It must be Dr. Smith’s Chiropractic Care Center. If you have a FEIN number, use the name that is listed on your Health Care Financing Administration (HCFA) form.

“Irrevocable”

It is important that you include this term to indicate that the patient cannot later revoke the assignment of benefits. This tells the court that the AOB is the only document determining standing , or the ability to bring a lawsuit on related matters.

Another key term: the court sees benefits as payments. It does not necessarily give you the right to bring a lawsuit. Include language such as, “assigns the rights and benefits, including the right to bring suit…”

Benefit of Not Being Billed At This Time for Services

Essentially, this means that a provider gives up the right to collect payments at the time of service in exchange for the right to bring suit against the insurance company if they are not paid in full. Likewise, the patient gives up the right to bring suit, but they do not have to pay now. The wording will look like this: “In exchange for patient assigning the rights and benefits under their PIP insurance, Dr. Smith’s Chiropractic Care Center will allow patients to receive services without collecting payments at this time.”

Patient Signature

Yes, it’s basic, but make sure the assignment of benefits form is signed and dated by the patient! This renders the AOB , for all intents and purposes, null and void. It is not an executed contract. You would have to start the entire process again, which means waiting longer to be reimbursed for the claim.

Power of Attorney Clause

Including a power of attorney clause, which supports not only “the right of collecting payment” but also the provider’s ability to take legal action on behalf of the patients, is vital. At Callagy Law, we always argue this is inherent within the no-fault statute; however, there are carriers to argue against the right to arbitration when the language is not in the AOB.

As medical providers, it is critical that you receive proper – and timely – reimbursement for services rendered. The assignment of benefits form is one of the most important pieces in this puzzle. It is essential for an attorney to prepare, or at least review, your AOB and other admission paperwork to ensure that you are able to collect pursuant to your patients’ insurance benefits in whatever ways needed.

Callagy Law can not only review these documents, but also ensure you are pursuing all recoverable bills to which you are eligible. If you have any questions, would like us to review your AOB form, or have issues collecting payment from insurance companies, please contact the Callagy Law team today .

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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.

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

What is Assignment of Benefits?

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

Understanding Assignment of Benefits

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

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

Difference between Assignment of Benefits and Power of Attorney

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

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

Examples of Assignment of Benefits

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

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

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

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

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

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

Improve your financial performance while providing a more transparent patient experience

Related terms, medically unlikely edit (mue).

Medically unlikely edit (MUE) is a claim validation tool used in healthcare RCM to identify and prevent payment for medically improbable or excessive services.

ICD-10-CM/PCS Coordination and Maintenance Committee

ICD-10-CM/PCS Coordination and Maintenance Committee is a group responsible for maintaining and updating the ICD-10-CM and ICD-10-PCS code sets.

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What is an assignment of benefits.

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

How an AOB works

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

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

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

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

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

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

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

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

Example of an assignment of benefits

When would you need to use an assignment of benefits?

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

Assignment of benefits for health insurance

Assignment of benefits for car owners

Assignment of benefits for homeowners

The fraud factor

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

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

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

Get three estimates before selecting a contractor.

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

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

Pros and cons of an assignment of benefits

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

Pros of assignment of benefits

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

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

Some people appreciate not needing to negotiate with their insurer.

You are not required to sign an AOB.

Cons of assignment of benefits

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

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

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

Any AOB you do sign is legally binding.

The takeaway

This story was originally featured on Fortune.com

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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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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Benefit Claims Procedure Regulation FAQs

A-1: does the regulation apply to benefit claims filed by enrollees in federal programs, such as medicare and medicaid, or to federal employees and their families covered under the federal employees health benefits program (fehbp).

No. The regulation establishes requirements only for employee benefit plans that are covered under ERISA. See ERISA sections 3(1) and 3(2). Such plans are typically benefit programs provided by private-sector employers for their employees (or by unions, acting either independently or jointly with employers, for their members). Government programs, whether federal, state, or local, that are not related to employment, such as Medicaid and Medicare, are not covered by these claims procedure rules; neither are government-sponsored benefit programs for governmental employees, such as the FEHBP or benefit plans provided by state or local governments to their own employees. Such plans have their own specific rules for claims procedures, which may derive from other federal law (for federal programs) or from state or local law.

A-2: Does the regulation apply to benefit claims filed by persons who are both enrollees in Medicare + Choice programs and participants in an ERISA plan?

The regulation applies only to benefits provided under an ERISA plan that are outside the scope of what is regulated by the Medicare program. Benefits provided under ERISA plans vary from plan to plan based on plan design. When a benefit is provided under an ERISA plan pursuant to a separate group arrangement between the Medicare + Choice organization and the employer (or employee organization), even though the benefit is only available to enrollees in a Medicare + Choice program, we have been advised by HHS that the benefit would be outside the scope of what is regulated by the Medicare program. Claims for such benefits would be subject to the provisions of the regulation. The primary source of information about these ERISA benefits is the summary plan description for the plan, which is available on request from the plan administrator. On the other hand, benefits that are covered under a Medicare + Choice contract (whether they are Medicare benefits, additional benefits paid for by Medicare, or supplemental benefits paid for through a premium charged to all enrollees) are subject to the Medicare + Choice rules for organization determinations, appeals, and grievances under 42 CFR 422 and not the provisions of the regulation. See question A-1. A person who is covered by a Medicare + Choice program and wants more information on how these Medicare + Choice rules apply to his or her coverage should call 1.800.Medicare. He or she may also want to consult their Medicare Regional Office and 1.800.Medicare can assist them in contacting the appropriate office.

A-3: Does the regulation apply to a request for a determination whether an individual is eligible for coverage under a plan?

The regulation applies to coverage determinations only if they are part of a claim for benefits. The regulation, at § 2560.503-1(e), defines a claim for benefits, in part, as a request for a plan benefit or benefits made by a claimant in accordance with a plan's reasonable procedure for filing benefit claims. A claim for group health benefits includes pre-service claims (§ 2560.503-1(m)(2)) and post-service claims (§ 2560.503-1(m)(3)). If an individual asks a question concerning eligibility for coverage under a plan without making a claim for benefits, the eligibility determination is not governed by the claims procedure rules. If, on the other hand, the individual files a claim for benefits in accordance with the plan's reasonable procedures, and that claim is denied because the individual is not eligible for coverage under the plan, the coverage determination is part of a claim and must be handled in accordance with the claims procedures of the plan and the requirements of the regulation. See 65 FR at 70255.

A-4: Does the regulation apply to a request for prior approval of a benefit or service when such prior approval is not required under the terms of the plan?

No. If the plan does not require prior approval for the benefit or service with respect to which the approval is being requested, the request is not a claim for benefits (§ 2560.503-1(e)) governed by the regulation. The regulation defines pre-service claim by reference to the plan's requirements, not the claimant's decision to seek the medical care, nor the doctor's decision to provide care. Thus, in the absence of any plan requirement for prior approval, mere requests for advance information on the plan's possible coverage of items or services or advance approval of covered items or services do not constitute pre-service claims under the regulation. See § 2560.503-1(m)(2).

A-5: Is a plan required to treat all questions regarding benefits as claims for benefits under the plan?

No. The regulation does not govern casual inquiries about benefits or the circumstances under which benefits might be paid under the terms of a plan. On the other hand, a group health plan that requires the submission of pre-service claims, such as requests for preauthorization, is not entirely free to ignore pre-service inquiries where there is a basis for concluding that the inquirer is attempting to file or further a claim for benefits, although not acting in compliance with the plan's claim filing procedures. In such a case, the regulation requires the plan to inform the individual of his or her failure to file a claim and the proper procedures to be followed. Specifically, this type of notification is required where there is a communication by a claimant or authorized representative (e.g., attending physician) that is received by a person or organizational unit customarily responsible for handling benefit matters (e.g., personnel office) and that communication names the specific claimant, specific medical condition or symptom and a specific treatment, service, or product for which approval is requested. Under the regulation, notice must be furnished as soon as possible, but not later than 24 hours in the case of urgent care claims or 5 days in the case of non-urgent claims. Notice may be oral, unless a written notification is requested. See § 2560.503-1(c)(1).

A-6: Do the requirements applicable to group health plans apply to dental benefits offered as a stand-alone plan or as part of a group health plan?

Yes, in both cases. The regulation defines group health plan as an employee welfare benefit plan within the meaning of ERISA section 3(1) to the extent that such plan provides medical care within the meaning of section 733(a) of ERISA. See § 2560.503-1(m)(6). Section 733(a)(2) defines medical care, in part, to mean the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body. Accordingly, for purposes of the claims procedure rules, the provision of dental benefits, either as part of a larger welfare plan, or as a stand-alone plan, would be subject to the requirements of the regulation applicable to group health plans.

A-7: Do the requirements applicable to group health plans apply to prescription drug benefit programs offered as a stand-alone plan or as part of a group health plan?

Yes, in both cases. Prescription drug benefits would, like dental benefits, constitute medical care within the meaning of Section 733(a)(2). See question A-6. Accordingly, the provision of prescription drug benefits, either as a stand-alone plan, or as part of a group health plan, would be subject to the requirements of the regulation applicable to group health plans. Whether, and under what circumstances, specific practices permitted under the plan, such as the submission of a prescription to a pharmacy or pharmacist, will constitute a claim for benefits governed by the claims procedure rules will depend on the terms of the plan.

A-8: Do the requirements applicable to group health plans apply to contractual disputes between health care providers (e.g., physicians, hospitals) and insurers or managed care organizations (e.g., HMOs)?

No, provided that the contractual dispute will have no effect on a claimant's right to benefits under a plan. The regulation applies only to claims for benefits. See questions A-3, A-4, A-5. The regulation does not apply to requests by health care providers for payments due them -- rather than due the claimant -- in accordance with contractual arrangements between the provider and an insurer or managed care organization, where the provider has no recourse against the claimant for amounts, in whole or in part, not paid by the insurer or managed care organization.

The following example illustrates this principle. Under the terms of a group health plan, participants are required to pay only a $10 co-payment for each office visit to a preferred provider doctor listed by a managed care organization that contracts with such doctors. Under the preferred provider agreement between the doctors and the managed care organization, the doctor has no recourse against a claimant for amounts in excess of the co-payment. Any request by the doctor to the managed care organization for payment or reimbursement for services rendered to a participant is a request made under the contract with the managed care organization, not the group health plan; accordingly, the doctor's request is not a claim for benefits governed by the regulation.

On the other hand, where a claimant may request payments for medical services from a plan, but the medical provider will continue to have recourse against the claimant for amounts unpaid by the plan, the request, whether made by the claimant or by the medical provider (e.g., in the case of an assignment of benefits by the claimant) would constitute a claim for benefits by the claimant. For information on authorized representatives of claimants. See questions B-1, B-2, B-3.

A-9: What benefits are disability benefits subject to the special rules applicable under the regulation for disability claims?

A benefit is a disability benefit under the regulation, subject to the special rules for disability claims, if the plan conditions its availability to the claimant upon a showing of disability. It does not matter how the benefit is characterized by the plan or whether the plan as a whole is a pension plan or a welfare plan. If the claims adjudicator must make a determination of disability in order to decide a claim, the claim must be treated as a disability claim for purposes of the regulation. As the department stated in the preamble to the regulation, 65 FR at 70247, n.4, where a single plan provides more than one type of benefit, it is the department's intention that the nature of the benefit should determine which procedural standards apply to a specific claim, rather than the manner in which the plan itself is characterized. Accordingly, plans, including pension plans, that provide benefits conditioned upon a determination of disability must maintain procedures for claims involving such benefits that comply with the requirements of the regulation applicable to disability claims, including the requirements for de novo review, the consultation requirement for medical judgments, the limit on appeal levels, the time limits for deciding disability claims, and the disclosure requirements in connection with extensions of time.

However, if a plan provides a benefit the availability of which is conditioned on a finding of disability, and that finding is made by a party other than the plan for purposes other than making a benefit determination under the plan, then the special rules for disability claims need not be applied to a claim for such benefits. For example, if a pension plan provides that pension benefits shall be paid to a person who has been determined to be disabled by the Social Security Administration or under the employer's long term disability plan, a claim for pension benefits based on the prior determination that the claimant is disabled would be subject to the regulation's procedural rules for pension claims, not disability claims.

A-10: Do the time frames in these rules govern the time within which claims must be paid?

No. While the regulation establishes time frames within which claims must be decided, the regulation does not address the periods within which payments that have been granted must be actually paid or services that have been approved must be actually rendered. Failure to provide services or benefit payments within reasonable periods of time following plan approval, however, may present fiduciary responsibility issues under Part 4 of title I of ERISA.

A-11: When a group health plan participant presents a prescription to a pharmacy to be filled at a cost to the participant determined by reference to a formula or schedule established in accordance with the terms of such plan and with respect to which the pharmacy exercises no discretion on behalf of the plan, does the regulation require that the presentation of the prescription be treated as a claim for benefits?

No. As indicated in question A-7, whether, and under what circumstances, specific practices permitted under a plan, such as the presentation of a prescription to a pharmacy, will constitute a claim for benefits governed by the claims procedure rules will depend on the terms of the plan. In this regard, a claim for benefits is defined in § 2560.503-1(e) to mean a request for a plan benefit or benefits made by a claimant in accordance with a plan's reasonable procedure for filing benefit claims. Accordingly, whether, and to what extent, the presentation of a prescription to a pharmacy which exercises no discretion on behalf of the plan will constitute a request for a plan benefit will be determined by reference to the plan's procedures for filing benefit claims.

It is not uncommon for group health plans to have arrangements with preferred or network providers (e.g., doctors, physical therapists, pharmacies, optometrists) to provide medical care-related services or products at a predetermined cost to covered plan participants and with respect to which the providers exercise no discretion on behalf of the plan. It is the view of the department that neither the statute nor the claims procedure regulation requires that a plan treat interactions between participants and preferred or network providers under such circumstances as a claim for benefits governed by the regulation. Moreover, if the pharmacy refuses to fill the prescription absent payment of the entire cost by the participant, the regulation does not require that this refusal be treated as an adverse benefit determination under the regulation. It should be noted, however, that where a plan provides such benefits the plan must maintain a reasonable procedure, in accordance with the regulation, for processing claims of participants relating to such benefits.

A-12: Does the regulation apply to benefit claims filed by participants in top hat plans, e.g., plans that are unfunded and maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees?

Yes. The regulation establishes requirements for all employee benefit plans that are covered under Part 5 of ERISA, which would include top hat plans. Certain top hat plans are specifically excluded from parts of ERISA (see, e.g., sections 201(2); 301(a)(3); 401(a)(1)), but that exclusion does not apply to section 503, under which the regulation was promulgated. In this regard, paragraph (b)(2) of the regulation requires that a description of the plan's claims procedures must be included as part of the plan's summary plan description meeting the requirements of 29 CFR § 2520.102-3. Where a top hat plan is not required to furnish summary plan descriptions, pursuant to 29 CFR §§ 2520.104-23 or 2520.104-24, such plan may satisfy the requirements of paragraph (b)(2) of the regulation by taking steps reasonably designed to ensure that participants in such plans are made aware of the existence of the plan's claims procedures in conjunction with enrollment in the plan and how to obtain such procedures upon request.

A-13: Would a determination of disability for purposes of receiving a premium waiver under a contributory life insurance plan be governed by the special rules applicable to disability benefits under the claims procedure regulation?

Yes. A benefit is a disability benefit under the regulation, subject to the special rules for disability claims, if the plan conditions availability of the benefit on a showing of disability. As noted in question A-9, however, if a plan provides a benefit the availability of which is conditioned on a finding of disability, and that finding is made by a party other than the plan for purposes other than making a benefit determination under the plan, then the special rules for disability claims need not be applied to a claim for such benefits. The department notes that the inclusion of a premium waiver in a plan that is not otherwise covered by ERISA would not, in and of itself, cause the plan to become subject to the regulation.

B-1: May a plan require that a claimant complete and file a form identifying any person authorized to act on his or her behalf with respect to a claim?

Yes, with one exception. The regulation provides that a reasonable claims procedure may not preclude an authorized representative of a claimant from acting on behalf of a claimant with respect to a benefit claim or appeal of an adverse benefit determination. The regulation also provides, however, that a plan may establish reasonable procedures for determining whether an individual has been authorized to act on behalf of the claimant. Completion of a form by the claimant identifying the authorized representative would be one method for making such a determination.

The one exception is where a claim involves urgent care. In such instances, a plan must, without regard to the plan's procedures for identifying authorized representatives, permit a health care professional with knowledge of the claimant's medical condition (e.g., a treating physician) to act as the authorized representative of the claimant. This exception is intended to enable a health care professional to pursue a claim on behalf of a claimant under circumstances where, for example, the claimant is unable to act on his or her own behalf. See § 2560.503-1(b)(4).

B-2: Does an assignment of benefits by a claimant to a health care provider constitute the designation of an authorized representative?

No. An assignment of benefits by a claimant is generally limited to assignment of the claimant's right to receive a benefit payment under the terms of the plan. Typically, assignments are not a grant of authority to act on a claimant's behalf in pursuing and appealing a benefit determination under a plan. In addition, the validity of a designation of an authorized representative will depend on whether the designation has been made in accordance with the procedures established by the plan, if any.

B-3: When a claimant has properly authorized a representative to act on his or her behalf, is the plan required to provide benefit determinations and other notifications to the authorized representative, the claimant, or both?

Nothing in the regulation precludes a plan from communicating with both the claimant and the claimant's authorized representative. However, it is the view of the department that, for purposes of the claims procedure rules, when a claimant clearly designates an authorized representative to act and receive notices on his or her behalf with respect to a claim, the plan should, in the absence of a contrary direction from the claimant, direct all information and notifications to which the claimant is otherwise entitled to the representative authorized to act on the claimant's behalf with respect to that aspect of the claim (e.g., initial determination, request for documents, appeal, etc.). In this regard, it is important that both claimants and plans understand and make clear the extent to which an authorized representative will be acting on behalf of the claimant.

B-4: What kind of administrative processes and safeguards must a plan have in place to ensure and verify appropriately consistent decision making?

The department did not intend to prescribe any particular process or safeguard to ensure and verify consistent decision making by plans. To the contrary, the department intended to preserve the greatest flexibility possible for designing and operating claims processing systems consistent with the prudent administration of a plan. The department believes that prudent plan administration requires ensuring that similarly situated claims are, under similar circumstances, decided in a consistent manner. Consistency in the benefit claims determinations might be ensured by applying protocols, guidelines, criteria, rate tables, fee schedules, etc. Consistent decision making might be ensured and verified by periodic examinations, reviews, or audits of benefit claims to determine whether the appropriate protocols, guidelines, criteria, rate tables, fee schedules, etc. were applied in the claims determination process. See § 2560.503-1(b)(5).

B-5: For purposes of furnishing relevant documents to a claimant, what kind of disclosure is required to demonstrate compliance with the administrative processes and safeguards required to ensure and verify appropriately consistent decision making in making the benefit determination?

What documents will be required to be disclosed will depend on the particular processes and safeguards that a plan has established and maintains to ensure and verify appropriately consistent decision making. See 65 FR at 70252. The department does not anticipate new documents being developed solely to comply with this disclosure requirement. Rather, the department anticipates that claimants who request this disclosure will be provided with what the plan actually used, in the case of the specific claim denial, to satisfy this requirement. The plan could, for example, provide the specific plan rules or guidelines governing the application of specific protocols, criteria, rate tables, fee schedules, etc. to claims like the claim at issue, or the specific checklist or cross-checking document that served to affirm that the plan rules or guidelines were appropriately applied to the claimant's claim. Plans are not required to disclose other claimants' individual records or information specific to the resolution of other claims in order to comply with this requirement. See § 2560.503-1(m)(8)(iii). See question D-12.

B-6: Do the regulation's limits on the use of pre-dispute arbitration extend to other actions that a participant or beneficiary might pursue with regard to a health care provider or other person or entity?

No. The regulation is intended to regulate pre-dispute arbitration only with respect to group health and disability benefits provided under ERISA-covered plans. The regulation is not intended to affect the enforceability of a pre-dispute arbitration agreement with respect to any other claims or disputes. Accordingly, the regulation should not be read to affect the obligation of a participant or beneficiary to arbitrate such other claims and disputes within the scope of the arbitration agreement. See 29 CFR § 2560.503-1(c)(3)(iii).

C-1: When does the time period for making an initial decision on a claim begin to run?

The time for making an initial claims decision begins to run when the claim is filed in accordance with a plan's reasonable filing procedures, regardless of whether the plan has all of the information necessary to decide the claim at the time of the filing.

For purposes of calculating the time period within which a claim must be decided, a plan cannot extend the time period by treating as filed only those claims with respect to which all the information necessary to make a decision has been submitted (often referred to as clean claims). See § 2560.503-1(f)(4).

C-2: May a plan's claims procedures require claimants to submit relevant medical information or information relating to coordination of benefits prior to the plan's making a decision on a claim?

Plans have considerable flexibility in defining the procedures to be followed for the initiation, processing, and appeal of benefit claims. However, while plans may require the submission of specific information necessary to a benefit determination under the terms of the plan, including medical and coordination of benefit information, the plan may nonetheless have to make a decision on the claim before receiving such information. As noted in question C-1, the time periods applicable to deciding claims begin to run on the date a claim is filed in accordance with reasonable procedures of the plan, without regard to whether all the information necessary to make a benefit determination accompanies the filing. See § 2560.503-1(f)(4).

C-3: If the period within which a group health claim must be decided is ending and the claimant has yet to furnish all the information necessary to decide the claim, may the plan extend the time period for deciding the claim and, if so, for how long?

In general, a group health plan may unilaterally extend the decision making on both pre-service and post-service claims for 15 days after the expiration of the initial period, if the administrator determines that such an extension is necessary for reasons beyond the control of the plan. There is no provision for extensions in the case of claims involving urgent care.

If the reason for taking the extension is the failure of the claimant to provide information necessary to decide the claim, and the claimant is so notified of this fact, the time period for making the decision is suspended (tolled) from the date of the notification to the claimant to the earlier of:

The date on which a response from the claimant is received by the plan
The date established by the plan for the furnishing of the requested information (at least 45 days)

The extension period (15 days) – within which a decision must be made by the plan – will begin to run from the date on which the claimant's response is received by the plan (without regard to whether all of the requested information is provided) or, if earlier, the due date established by the plan for furnishing the requested information (at least 45 days). See §§ 2560.503-1(f)(2)(iii) (A) and (B); 2560.503-1(f)(4); 2560.503-1(i)(4). Also see 65 FR at 70250, n.21.

C-4: Many plans, including group health and disability plans, require claimants to submit to examination by an expert or experts of the plan's choosing in connection with the plan's consideration of the claimant's claim. How do the regulation's time limits apply to the completion of such examinations?

The regulation's time limits begin to run when a claim is filed in accordance with the reasonable procedures of the plan for filing claims. See question C-1. A plan that requires a physical or other examination of the claimant to evaluate a claim must design a process that provides for decision making within the time frames of the regulation.

If necessary, however, in the circumstances of a specific claim, a plan may take an extension of time to enable the claimant to submit requested information (including the report of a required examination). The regulation's provisions on extensions of time and tolling, discussed in question C-3, would apply to these situations to determine when an extension is permitted and when an extension would begin and end. Under those rules, when a plan takes an extension of time because additional information must be obtained from a claimant, the claimant must be provided at least 45 days within which to provide the information or submit to the requested examination. Plans may, of course, provide claimants longer periods of time for this purpose.

C-5: May a claimant agree to an extension or further extension of the time period within which a plan must decide a claim?

Yes. The only limits on extensions of time established by the regulation are imposed on plans. Claimants may voluntarily agree to provide a plan additional time within which to make a decision on a claim, even under circumstances where the plan could not unilaterally extend the decision making period, such as in the case of a claim involving urgent care or a claim on appeal.

See §§ 2560.503-1(f)(2)(i); 2560.503-1(i). Also see 65 FR at 70250, n.21.

C-6: What responsibility does the plan have for determining whether any specific claim involves urgent care and must therefore be decided on an expedited basis?

A plan has a duty to make this determination on the basis of the information provided by, or on behalf of, the claimant. A claim involving urgent care is any claim for medical care or treatment with respect to which the application of the time periods for making non-urgent care determinations could seriously jeopardize the life or health of the claimant or the claimant's ability to regain maximum function, or -- in the opinion of a physician with knowledge of the claimant's medical condition -- would subject the claimant to severe pain that cannot be adequately managed without the care or treatment that is the subject of the claim.

In determining whether a claim involves urgent care, the plan must apply the judgment of a prudent layperson who possesses an average knowledge of health and medicine. However, if a physician with knowledge of the claimant's medical condition determines that a claim involves urgent care, the claim must be treated as an urgent care claim. See § 2560.503-1(m)(1).

C-7: Under the regulation, urgent care claims must be decided as soon as possible, taking into account the medical exigencies, but not later than 72 hours after receipt, and pre-service claims must be decided within a reasonable period of time appropriate to the medical circumstances, but not later than 15 days after receipt. Can a plan's claims procedures require claimants to explain or describe whether, and what, medical exigencies or medical circumstances exist?

Yes. While the department has indicated that the time periods for decision making are generally maximum periods and not automatic entitlements, the department recognizes that assessments of the appropriate timeframe for making benefit determinations will, in large part, be dependent on the information provided by the claimant. Requesting specific information from the claimant regarding whether and what medical circumstances exist that may give rise to a need for expedited processing of the claim would appear to facilitate claims processing and, therefore, would not, in the view of the department, be an unreasonable plan request. If, on the other hand, the plan believes based on its own review of the claim that expedited processing is required, it is the view of the department that the claim must be processed on an expedited basis without regard to the claimant's failure to provide information relating to whether expedited processing is necessary.

C-8: If a claimant requests a plan to extend a previously approved course of treatment, by either increasing the number of treatments or the period of time for treatments, and that request is determined by the claimant's treating physician to be a claim involving urgent care, within what period must the plan approve or deny the claimant's request?

Under the concurrent care provisions of the rule, any request that involves both urgent care and the extension of a course of treatment beyond the period of time or number of treatments previously approved by the plan must be decided as soon as possible, taking into account the medical exigencies, and notification must be provided to the claimant within 24 hours after receipt of the claim, when the request is made at least 24 hours prior to the expiration of the prescribed period of time or number of treatments. If such a request is not made at least 24 hours prior to the expiration of the prescribed period of time or number of treatments, the request must be treated as a claim involving urgent care and decided in accordance with the urgent care claim timeframes, i.e., as soon as possible, taking into account the medical exigencies, but not later than 72 hours after receipt. See § 2560.503-1(f)(2)(i) and (ii) (B).

If a request to extend a course of treatment beyond the period of time or number of treatments previously approved by the plan does not involve urgent care, the request may be treated as a new benefit claim and decided within the timeframe appropriate to the type of claim, i.e., as a pre-service claim or a post-service claim. § 2560.503-1(f)(2)(iii).

C-9: In the case of a group health plan's decision to reduce or terminate a previously approved course of treatment, must claimants be afforded at least 180 days to appeal the plan's revised determination before the benefit can be reduced or terminated?

No. Under the concurrent care provisions of the rule, any reduction or termination of a course of treatment (other than by plan amendment) before the end of the previously approved period or number of treatments is treated as an adverse benefit determination. In such cases the rule requires that the plan administrator provide the claimant sufficient advance notice of the reduction or termination to allow the claimant to appeal and obtain a determination before the benefit is reduced or terminated. Generally, claimants must be afforded at least 180 days following an adverse benefit determination to appeal that determination. If the 180 day rule applied to appeals under concurrent care provisions of the regulations, notifications of reductions or terminations would, in every instance, have to be given at least six months in advance of the termination or reduction. This was not the intention of the department. Accordingly, while the department is of the view that plans must afford claimants a reasonable period of time within which to develop their appeal of a proposed reduction or termination, plans are not required to assume that claimants will need the full 180 days to file such an appeal before the benefit can be reduced or terminated under the special rules governing concurrent care claims. See § 2560.503-1(f)(2)(ii) (A).

C-10: In what circumstances, if any, would a post-service claim be a claim involving urgent care?

Post-service claims are those claims with respect to which plan approval is not a prerequisite to obtaining medical services and payment is being requested for medical care already rendered to the claimant. Accordingly, a post-service claim would never constitute a claim involving urgent care within the meaning of the regulation.

A post-service claim is defined in the regulation as any claim for a benefit under a group health plan that is not a pre-service claim. Pre-service claims are those claims with respect to which the terms of the plan condition receipt of the benefit, in whole or in part, on approval of the benefit in advance of obtaining medical care. See question C-6, § 2560.503-1(m)(1), (2), and (3).

C-11: If a claim is determined to involve urgent care when it is initially filed, must it automatically continue to be treated as urgent if it is denied and the claimant files an appeal, regardless of whether, at that time, medical services have actually been provided and the only question to be resolved is who will pay for such services?

No. The nature of a claim or a request for review of an adverse benefit determination should be judged as of the time the claim or review is being processed. If requested services have already been provided between the time the claim was denied and a request for review is filed, the claim no longer involves urgent care because use of the post-service time frames for deciding the appeal could not jeopardize the claimant's life, health, or ability to regain maximum function, or subject the claimant to severe pain. See § 2560.503-1(m)(1).

C-12: If a claimant submits medical bills to a plan for reimbursement or payment, and the plan, applying the plan's limits on co-payment, deductibles, etc., pays less than 100% of the medical bills, must the plan treat its decision as an adverse benefit determination?

Under the regulation, an adverse benefit determination generally includes any denial, reduction, or termination of, or a failure to provide or make payment (in whole or in part) for, a benefit. In any instance where the plan pays less than the total amount of expenses submitted with regard to a claim, while the plan is paying out the benefits to which the claimant is entitled under its terms, the claimant is nonetheless receiving less than full reimbursement of the submitted expenses. Therefore, in order to permit the claimant to challenge the plan's calculation of how much it is required to pay, the decision is treated as an adverse benefit determination under the regulation. Providing the claimant with the required notification of adverse benefit determination will give the claimant the information necessary to understand why the plan has not paid the unpaid portion of the expenses and to decide whether to challenge the denial, e.g., the failure to pay in full. This approach permits claimants to challenge whether, for example, the plan applied the wrong co-payment requirement or deductible amount. The fact that the plan believes that a claimant's appeal will prove to be without merit does not mean that the claimant is not entitled to the procedural protections of the rule. This approach to informing claimants of their benefit entitlements with respect to specific claims, further, is consistent with current practice, in which Explanation of Benefits forms routinely describe both payable and non-payable portions of claim-related expenses. See § 2560.503-1(m)(4).

C-13: Under what circumstances is a plan required to notify a claimant of a benefit determination that is not an adverse benefit determination, i.e., a complete grant of a claim?

In the case of urgent care claims and pre-service claims, the regulation requires that claimants be apprised of the plan's benefit determination, whether the determination is adverse or a complete grant. The rules require that this notification be furnished in accordance with the timeframes generally applicable to urgent care and pre-service claims. There is no specific notification requirement applicable to post-service claims that are fully granted. See § 2560.503-1(f)(2)(i) and (iii).

C-14: What information is a plan required to provide when giving notice of a claim determination that is not adverse (that has been completely granted), in the case of an urgent care or pre-service claim?

The regulation does not specify the information that must be provided in notices of benefit determinations that are not adverse. However, in accordance with the regulation's general requirement of reasonableness, the department anticipates that such notices will contain sufficient information to fully apprise the claimant of the plan's decision to approve the requested benefits. See § 2560.503-1(f)(2)(i) and (iii) (A).

C-15: When a plan has approved a benefit that will be provided over a period of time, such as a series of chemotherapy treatments, must the plan notify the claimant when the benefits end?

No. Provided that the plan complied with the regulation in adequately notifying the claimant regarding the scope of the benefit that was originally approved (e.g., for how long, how many treatments, etc.) and further provided that the plan has not decided to reduce or terminate early the course of treatment that was previously approved, the regulation does not require the plan to provide a formal notification that the course of treatment is coming to an end. See § 2560.503-1(f)(2)(ii).

C-16: May a notice of an adverse benefit determination generally state that a rule, guideline or protocol may have been relied upon in making the benefit determination and satisfy the requirements of the regulation?

No. The regulation provides that if an internal rule, guideline, protocol, or similar criterion was relied upon in making an adverse benefit determination, the notification of the adverse benefit determination must either set forth the rule, guideline, protocol, or criterion or indicate that such was relied upon and will be provided free of charge to the claimant upon request. It would be sufficient, in the view of the department, in such a case, to indicate that an internal rule, etc., had been relied upon without specifying the identity of the specific rule and that the specific rule, etc. would be furnished to the claimant upon request. A notice that merely indicates, however, that a rule, guideline, protocol, or similar criterion may have been relied upon does not provide the claimant any specific information about the basis on which his or her claim was decided. Inasmuch as plans will know in every instance what rules, protocols, guidelines, etc. were relied upon in making a determination, providing an indication whether such was relied upon should not be difficult. Moreover, the department is concerned that the routine inclusion of such a statement in all adverse benefit determination notifications may undermine the significance of the required disclosure. See § 2560.503-1(g)(1)(v) (A). For similar reasons, a general statement in an adverse benefit determination notice would not be considered as satisfying the requirements of § 2560.503-1(g)(1)(v) (B). Also see § 2560.503-1(j)(5)(i) and (ii).

C-17: Is a plan required to provide a copy of an internal rule, guideline, protocol, or similar criterion when the applicable rule, guideline, protocol, or criterion was developed by a third party which, for proprietary reasons, limits the disclosure of that information?

Yes. It is the view of the department that where a rule, guideline, protocol, or similar criterion serves as a basis for making a benefit determination, either at the initial level or upon review, the rule, guideline, protocol, or criterion must be set forth in the notice of adverse benefit determination or, following disclosure of reliance and availability, provided to the claimant upon request. However, the underlying data or information used to develop any such rule, guideline, protocol, or similar criterion would not be required to be provided in order to satisfy this requirement. The department also has taken the position that internal rules, guidelines, protocols, or similar criteria would constitute instruments under which a plan is established or operated within the meaning of section 104(b)(4) of ERISA and, as such, must be disclosed to participants and beneficiaries. See §§ 2560.503-1(g)(v) (A) and (j)(5)(i); 65 FR at 70251. Also see §§ 2560.503-1(h)(2)(iii) and 2560.503-1(m)(8)(i); Advisory Opinion 96-14A (July 31, 1996).

C-18: If a plan conditions continuation of disability benefit payments on a periodic confirmation of the claimant's disability and, in conjunction with such a confirmation, determines that the claimant is no longer disabled and, accordingly, terminates payment of benefits, must the plan treat the termination as an adverse benefit determination under the regulation?

Yes. Under the regulation, an adverse benefit determination includes any denial, reduction, or termination of a benefit. Accordingly, where a plan terminates the payment of disability benefits under such circumstances, the plan is required to provide the claimant a notification of adverse benefit determination and the right to appeal that determination consistent with the regulation. See 29 CFR § 2560.503-1(m)(4), (g) and (h). If, on the other hand, a plan provides for the payment of disability benefits for a pre-determined, fixed period (e.g., a specified number of weeks or months or until a specified date), the termination of benefits at the end of the specified period would not constitute an adverse benefit determination under the regulation. Any request by a claimant for payment of disability benefits beyond the specified period, therefore, would constitute a new claim. See 29 CFR § 2560.503-1(f)(3). Also see 29 CFR § 2560.503-1(f)(2)(ii).

C-19: Does the regulation limit a plan's ability to establish a maximum period for the filing of initial claims for benefits?

No. The regulation does not contain any specific rules governing the period of time that must be given to claimants to file their claims. However, a plan's claim procedure nonetheless must be reasonable and not contain any provision, or be administered in any way, that unduly inhibits or hampers the initiation or processing of claims for benefits. Adoption of a period of time for filing claims that serves to unduly limit claimants' reasonable, good faith efforts to make claims for and obtain benefits under the plan would violate this requirement. See 29 CFR § 2560.503-1(b)(3).

C-20: What timeframes apply when an extension of time is required by a plan in connection with an initial disability benefit determination?

The regulation addresses two situations in which a plan may have an extension of time for making a disability benefit determination. The first situation is when a decision cannot be rendered due to any matter beyond the control of the administrator other than the need for additional information from the claimant. In this situation, the extension period is added to the period within which the determination is required to be made. For example, if prior to the end of the initial 45-day period, the administrator determines that, for reasons beyond its control, a decision cannot be rendered, the plan may take up to an additional 30 days (i.e., 30 days in addition to the initial 45-day period). Similarly, if a decision cannot, for similar reasons, be rendered within the initial extension period, the plan may take up to an additional 30 days (i.e., 30 days in addition to the initial 30-day extension period) or up to a total of 105 days to decide the pending claim. See 29 CFR § 2560.503-1(f)(3). The second situation is when the plan requires additional information from the claimant to make a benefit determination. This situation is governed by the principles in question C-3.

C-21: If a plan determines that a claim does not provide sufficient information, must the plan take an extension of time and request additional information from the claimant?

No. The provisions governing extensions of time are permissive and not mandatory. As such, plans may provide for taking extensions of time or not, and plan administrators may be given the discretion to decide whether to take an extension of time in connection with any individual claim. Consequently, as a general matter, a plan may deny claims at any point in the administrative process on the basis that it does not have sufficient information; such a decision would allow the claimant to advance to the next stage of the claims process.

C-22: If a group health plan determines that an extension of time is necessary in order to obtain additional information from a claimant, may the administrator as part of the notice to the claimant of the need for the extension of time also include a notice of adverse benefit determination applicable if the claimant fails to provide any information within the period prescribed by the plan (i.e., at least 45 days)?

Yes. If the notice clearly states that the claim will be denied if the claimant fails to submit any information in response to the plan's request, it is the view of the department that the furnishing of a combined notice would not be contrary to the regulation, provided that the combined notice satisfied the content requirements applicable to both the extension notice and the notice of adverse benefit determination. In this regard, the notice of adverse benefit determination should make clear that the period for appealing the denied claim begins to run at the end of the period prescribed in the notice for submitting the requested information (or such later date as may be provided under the terms of the plan). See 29 CFR § 2560.503-1(f)(2) and (3).

D-1: May a plan require that requests for review of adverse benefit determinations be made in writing?

Yes, with one exception. The regulation provides that a plan's claims procedure must provide a claimant with a reasonable opportunity for a full and fair review of a denied claim. A claims procedure that requires requests for reviews of adverse benefit determinations to be made in writing would not be unreasonable in that regard, except with respect to claims involving urgent care. In the case of urgent care claims, the regulation requires that a plan's procedures permit requests for expedited appeals to be submitted orally or in writing by the claimant. See § 2560.503-1(h)(2) and (3)(vi).

D-2: May the direct supervisor of the person(s) who makes initial claim determinations serve as the appropriate named fiduciary for purposes of reviewing those claims on appeal?

Yes. The only limitation that the rule imposes on who can serve as the named fiduciary for purposes of reviewing adverse benefit determinations is that the named fiduciary cannot be either the individual who made the initial benefit determination that is the subject of the appeal or a subordinate of that individual. The rule further requires that the reviewer, whoever that individual is, may not afford deference to the initial determination. That is, the reviewer must consider the full record of the claim and make an independent decision on whether it should be granted. See § 2560.503-1(h)(3)(ii).

D-3: If a group health plan provides for two levels of review, rather than one, following an adverse benefit determination, what standards, if any, govern the second level of review?

Where a plan provides for two levels of review on appeal, it is the view of the department that the second level of review is subject to the same standards that apply to the first level of review. For example, the second-level reviewer may not afford deference to the decision at the first level of review, and the reviewer must not be the same person who made the first level review decision on the claim or a subordinate of that person. See §§ 2560.503-1(c)(2) and 2560.503-1(h)(3)(ii).

D-4: If a group health plan provides for two levels of review following an adverse benefit determination, within what period must a determination be made at each level?

In the case of pre-service claims, a maximum of 15 days is provided for a benefit determination at each level. In the case of post-service claims, a maximum of 30 days is provided for a determination at each level. See § 2560.503-1(i)(2)(ii) and (iii).

For example, if a claimant appeals a pre-service adverse benefit determination, and the plan provides for two levels of review at the appeal level, the plan must make a determination within a reasonable period of time, taking into account the medical circumstances, but no later than 15 days after receipt of the appeal. If that claim is again denied at the first level of appeal and the claimant appeals that denial to the second level review stage, the plan must again make a determination within a reasonable period of time, taking into account the medical circumstances, but not later than 15 days after the plan's receipt of the claimant's second level appeal request.

In the case of urgent care claims, the regulation does not prescribe any specific period within which a determination must be made at each level of a two-level review process for such claims. Given the principles underlying the provisions governing pre- and post-service claims, however, it is the view of the department that each level of review of an urgent care claim would have to be completed in sufficient time to ensure that the total period for completing the reviews would not exceed the maximum period otherwise applicable to a process with only one level of review – as soon as possible, taking into account the medical exigencies, but not longer than 72 hours. See § 2560.503-1(i)(2)(i).

D-5: If a group health plan provides for two levels of review following an adverse benefit determination, how much time must a claimant be afforded to appeal the first level review determination to the second level review?

Under the regulation, claimants must be afforded at least 180 days following receipt of an adverse benefit determination to appeal that determination. In the case of a plan with a two-level review process, the 180-day rule applies to the period to be afforded claimants to appeal to the first review level. While the regulation does not specifically address the period of time to be afforded claimants to pursue the second level of review, the regulation requires that a plan's procedures must nonetheless be reasonable and, therefore, it is the view of the department that plans must afford claimants a reasonable opportunity to pursue a full and fair review at the second review level. See § 2560.503-1(h)(1) and (3)(i).

D-6: If a group health plan provides for two levels of review following an adverse benefit determination, may the plan use non-binding arbitration as a means for deciding the appealed claim?

Yes. A plan's procedures may provide for arbitration of benefit disputes at one of the two levels of appeal, provided two conditions are met. First, the arbitration must be conducted in a manner that will ensure that the timeframes and notice requirements otherwise applicable to appeals will be satisfied. Second, the arbitration must be non-binding – that is, the arbitration may not limit the claimant's ability to challenge the benefit determination in court. See § 2560.503-1(c)(4). The regulation also permits a plan to offer binding arbitration to a claimant after completion of the plan's appeal process. See questions E-1and E-2

D-7: May the board of trustees or committee of a multi-employer group health plan or multi-employer disability benefit plan that generally reviews appealed benefit claims at their quarterly meetings provide for two levels of appeal consistent with the regulation?

Yes, under limited circumstances. In general, the regulation permits plans to maintain two levels of review for adverse benefit determinations and establishes special timing rules for making benefit decisions at each level of the review process. See §§ 2560.503-1(c)(2), 2560.503-1(i)(2)(ii) and (iii), 2560.503-1(i)(3). The regulation also provides special timing rules applicable to boards of trustees or committees of multi-employer group health plans and multi-employer disability benefit plans, pursuant to which such plans are excepted from the otherwise applicable timing requirements. Under these rules, such boards or committees generally are permitted to defer the decisions on adverse benefit determination appeals until the next regularly scheduled meeting of the plan's board or committee. See §§ 2560.503-1(i)(2)(iii) (B), 2560.503-1(i)(3)(ii). It is the view of the department that a multi-employer group health plan or a disability benefit plan could not, in a manner consistent with the regulation, rely on both the special rules governing the maintenance of two appeal levels and the special rules for regularly scheduled boards of trustees or committee meetings. On the other hand, the department does not believe a multi-employer plan is foreclosed by the regulation from electing to make appeal determinations in accordance with the special rules governing two levels of appeal, rather than in accordance with the quarterly meeting provisions of the regulation. In addition, there is nothing in the regulation that would foreclose a multi-employer plan from making benefit review determinations in accordance with the quarterly meeting provisions and, following such determinations, providing claimants with an opportunity to voluntarily pursue an additional (second) review of their claim. See § 2560.503-1(c)(3).

D-8: Does the regulation's requirement of consultation with appropriate health care professionals limit the discretion of a plan fiduciary reviewing an adverse benefit determination with respect to the advice the fiduciary may seek in resolving the issues raised by the review?

The regulation requires, for group health and disability claims, that the fiduciary deciding an appeal of an adverse benefit determination based in whole or in part on a medical judgment consult with an appropriate health care professional. This requirement of consultation is intended to ensure that the fiduciary deciding a claim involving medical issues is adequately informed as to those issues. The consultation requirement, however, is not intended to constrain the fiduciary from consulting any other experts the fiduciary considers appropriate under the circumstances. For example, in connection with the appeal of a denied disability claim, a fiduciary may consider it appropriate to consult with vocational or occupational experts. In all cases, a fiduciary must take appropriate steps to resolve the appeal in a prudent manner, including acquiring necessary information and advice, weighing the advice and information so obtained, and making an independent decision on the appeal. The regulation's provision for consultation with a health care professional is not intended to alter the fiduciary standards that apply to claims adjudication.

D-9: Under what circumstances must a group health plan (or disability benefit plan) disclose the identity of experts consulted in the course of deciding a benefit claim?

The regulation provides that, in order to allow claimants a reasonable opportunity for a full and fair review of their claim, a plan's claims procedures must provide for the identification of medical (or vocational) experts whose advice was obtained on behalf of the plan in connection with an adverse benefit determination, without regard to whether the advice was relied upon in making the determination. Under the rules, plans are not required to automatically provide, as part of a notice of an adverse benefit determination or otherwise, the identity of experts consulted during the claim determination process. Nor are plans required to disclose the name of experts in the absence of an adverse benefit determination. On the other hand, consistent with the procedural requirements of the regulation, the plan must provide the identity of any such experts when requested by a claimant in connection with an adverse benefit determination. See § 2560.503-1(h)(3)(iv) and (4).

D-10: Upon receipt of a request from a claimant for the identity of experts consulted by the plan in connection with an adverse benefit determination, may a plan satisfy the requirements of the regulation by providing only the name of the company employing the expert or the qualifications of the expert, rather than the name of the expert?

No. The regulation expressly requires that plans provide for the identification of the medical or vocational expert or experts whose advice was obtained on behalf of the plan in connection with the claimant's claim. Consequently, merely providing the name of the company employing the expert or the qualifications of the expert would not, in the department's view, satisfy this requirement of the regulation. See § 2560.503-1(h)(3)(iv) and (4). See question D-7.

D-11: Does the regulation require that a group health plan provide a claimant with copies of the claimant's medical records relating to his or her benefit claim?

Yes. The regulation requires a plan to provide claimants, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to a claimant's claim for benefits. Under the regulation, relevant documents include, among other things, documents or records relied upon in making a benefit determination and documents and records submitted in the course of making the benefit determination. Inasmuch as a claimant's medical records relating to the benefit claim would be relevant documents, access to, and copies of, the claimant's medical records would have to be provided upon the claimant's request. The department notes, however, that if a plan has reason to believe that a claimant's medical records contain information that should be explained or disclosed by the physician (or other health professional) who developed the information, it would not be inconsistent with the regulation to refer the claimant to the physician (or other health professional) for such information prior to providing the requested documents directly to the claimant. However, if the physician to whom the claimant was referred failed to provide the requested information to the claimant in a reasonable period of time and without charge, the plan itself would be required to honor the claimant's request.

D-12: Does the regulation require that a plan provide claimants with access to or copies of files of other claimants?

No. The regulation requires that a claimant, have access to, and copies of, documents, records and other information relevant to the claimant's claim. For this purpose, the regulation defines as relevant any document, record, or other information that:

Was relied upon in making the benefit determination
Was submitted, considered, or generated in the course of making the benefit determination, without regard to whether it was relied upon
Demonstrates compliance with the plan's administrative processes and safeguards for ensuring consistent decision making
Constitutes a statement of policy or guidance with respect to the group health plan concerning the denied treatment option or benefit for the claimant's diagnosis, without regard to whether it was relied upon in making the benefit determination. See §§ 2560.503-1(h)(2)(iii) and 2560.503-1(m)(8)

While information and data from various claimants' files may have been compiled for purposes of developing a plan's criteria, standards, guidelines, or policies to be used in ensuring and demonstrating compliance with administrative processes and safeguards relating to consistent decision making, (see question B-5); or evaluating or assessing treatment options for benefit determinations, only the criteria, standards, guidelines, or policies themselves would have to be disclosed as information relevant to an individual claimant's claim, not the various claimants' files on which such criteria, standards, guidelines, or policies were based.

D-13: Must a plan include, in every notice of adverse benefit determination on review, a statement apprising claimants that -- You or your plan may have other voluntary dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. department of Labor Office and your state insurance regulatory agency?

The regulation, at § 2560.503-1(j)(5)(iii), provides for the inclusion of the statement described above in all notices of adverse benefit determination on review involving group health and disability claims. However, the department recognizes that information on the specific voluntary appeal procedures offered by the plan will be provided, consistent with § 2560.503-1(j)(4), in the notice of adverse benefit determination, along with a statement of the claimant's right to bring a civil action under section 502(a) of ERISA. Pending further review, therefore, the department will not seek to enforce compliance with the requirements of § 2560.503-1(j)(5)(iii).

E-1: Under what circumstances may a plan afford claimants the ability to appeal their benefit claim beyond the review level required by the regulation?

While the regulation limits a plan's claims procedure to a maximum of two mandatory appeal levels, the regulation does permit plans to offer voluntary additional levels of appeal, including arbitration or any other form of alternative dispute resolution, provided that certain conditions are met. The conditions of the regulation focus on ensuring that the claimant elects the additional appeal voluntarily. Specifically, the regulation provides that, in the case of such voluntary levels of appeal, the plan's claims procedure must provide:

The plan will not assert a failure to exhaust administrative remedies where a claimant elects to pursue a claim in court rather than through the voluntary level of appeal
The plan agrees that any statute of limitations applicable to pursuing the claimant's claim in court will be tolled during the period of the voluntary appeal process
The voluntary level of appeal is available only after the claimant has pursued the appeal(s) required by the regulation
The plan provides the claimant with sufficient information to make an informed judgment about whether to submit a claim through the voluntary appeal process, including the specific information delineated in the regulation
No fees or costs are imposed on the claimant as part of the voluntary appeal process. See § 2560.503-1(c)(3)

E-2: Can a plan's voluntary level of appeal include binding arbitration as a form of benefit dispute resolution?

Yes. Provided that a plan's claims procedure otherwise complies with the conditions of the regulation applicable to voluntary levels of appeal, there is nothing in the regulation that would preclude a plan from using binding arbitration or any other method of dispute resolution. See § 2560.503-1(c)(3). Also see 65 FR at 70253.

E-3: Do the regulation's special rules on voluntary additional levels of appeal, including arbitration, apply to pension plans or welfare plans other than group health plans or plans providing disability benefits?

No. The special rules on post-appeal level reviews apply, under the regulation, only to group health plans and plans that provide disability benefits. All other ERISA-covered plans are not required by the regulation to comply with these rules. However, if such other plans elect to establish voluntary additional levels of review, those levels would have to comport with the general requirements for a reasonable procedure described in § 2560.503-1(b).

F-1: What are the effective date and applicability dates of the new claims procedure rules?

The regulation became effective as of January 20, 2001. The effective date is the date the regulations became legally effective as part of the Code of Federal Regulations.

The applicability dates are the dates on which plans must begin to comply with the regulation. The applicability date for claims other than group health claims is January 1, 2002. This means that such plans must comply with the regulation beginning with new claims filed on or after January 1, 2002.

As amended on July 9, 2001, the regulation contains separate applicability dates for group health claims and all other claims. Under the regulation as amended on July 9, 2001, the applicability date for group health claims was the first day of the first plan year that begins on or after July 1, 2002, but not later than January 1, 2003. This means that group health plans were required to comply with the regulation beginning with new claims filed on or after the first day of the first plan year beginning on or after July 1, 2002, but not later than January 1, 2003. For all calendar year group health plans, the applicability date was January 1, 2003.

Claims that were filed under a plan before the relevant applicability date, and that were not yet resolved as of the applicability date, may be handled in accordance with the plan's old benefit claims procedures, or, if the plan so chooses, in accordance with the new procedures.

F-2: What principles are likely to be applied when a claimant elects to abandon the plan's administrative claims process in favor of pursuing his or her benefit claim in court?

Section 503 of ERISA requires plans to set up procedures to provide a full and fair review of denied benefit claims. With limited exceptions, claimants must exhaust those internal procedures before filing a civil action for benefits under section 502(a)(1)(B). This requirement reflects a legal presumption favoring exhaustion of internal procedures.

Paragraph (l) of § 2560.503-1 provides that where a plan fails to establish or follow claims procedures consistent with the requirements of the regulation, a claimant shall be deemed to have exhausted the administrative remedies available under the plan. The claimant shall be entitled to pursue any available remedies under section 502(a) on the basis that the plan has failed to provide a reasonable claims procedure that would yield a decision on the merits.

However, the regulation does not undermine the principle that claimants bear the burden of proving to the satisfaction of the court that the plan failed to establish or follow claims procedures consistent with the requirements of the regulation. In addition, many of the requirements in the regulation give a plan significant discretion in establishing and following reasonable procedures. For example, paragraph (b)(3) of the regulation prohibits a plan from establishing or administering its procedures so as to unduly inhibit or hamper the initiation or processing of claims for benefits. Accordingly, a plan will be accorded significant deference in evaluating whether it failed to follow a procedure consistent with those aspects of the regulation.

Moreover, not every deviation by a plan from the requirements of the regulation justifies proceeding directly to court. A plan that establishes procedures in full conformity with the regulation might, in processing a particular claim, inadvertently deviate from its procedures. If the plan's procedures provide an opportunity to effectively remedy the inadvertent deviation without prejudice to the claimant, through the internal appeal process or otherwise, then there ordinarily will not have been a failure to establish or follow reasonable procedures as contemplated by § 2560.503-1(l). Thus, for example, a plan that issues a notice of adverse benefit determination fully advising the claimant of the right to review and to request additional information from the plan may be able to correct an inadvertent failure to include in the notice the specific plan provision on which the denial was based. Ordinarily in that circumstance the plan will have provided access to a reasonable claims procedure consistent with the regulations. On the other hand, systematic deviations from the plan procedures, or deviations not susceptible to meaningful correction through plan procedures, such as the failure to include a description of the plan's review procedures in a notice of an adverse benefit determination, would justify a court determination that the plan failed to provide a reasonable procedure.

In addition, filing a lawsuit without exhausting plan procedures could limit claimants' appeal rights and cause claimants to lose benefits to which they otherwise might be entitled. This could be the case when, during the time it takes for a court to dismiss the claimant's suit, the plan's deadline for filing an appeal expires. In this regard, there is nothing in the regulation that would serve to toll internal plan deadlines for filing or appealing claims when suit is brought under section 502(a)(1)(B).

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When a patient sees a provider, the patient signs an “assignment of benefits” contract with the provider, assigning the patient’s legal rights to recover benefits from the insurance company to the provider so that the provider can be directly reimbursed for the services rendered to the patient. When the provider is in-network, this process is executed with little fanfare. However, for an out-of network provider, the road to reimbursement is not always as smooth. Not all states expressly permit assignment-of-benefits clauses, and as a result, insurers send the reimbursement to the beneficiary rather than the provider. The beneficiary is then supposed to forward the reimbursement onto the provider, which many of them do. However, if they do not, providers are put in the uncomfortable and difficult position of suing the patient, which has an uncertain likelihood of success. Given this arduous task, some providers contend that insurance companies have begun to utilize direct payment to patients in retaliation against providers for refusing to join the insurer’s networks.

In fact, in 2015, providers of inpatient and outpatient substance abuse and/or mental health treatment to chemically-dependent individuals filed suit against a group of insurers that includes several Blue Cross entities for this exact practice. In Dual Diagnosis Treatment Center, Inc., et al. v. Blue Cross of California, et. al., the providers alleged that defendants purposefully ignored valid assignments of benefits and instead directly reimbursed providers’ patients in order to punish the providers for being a few of a small number of providers who had not joined the insurers’ networks.

In their defense, the insurers stated that some of the plans contained anti-assignment provisions, prohibiting beneficiaries from entering into assignment-of-benefits contracts with providers. The original complaint sought to recover benefits, remove breaching fiduciaries and, against the Blue Cross insurers, injunctive and declaratory relief that Blue Cross’ pattern of denying providers’ assigned claims without reviewing the operative plan document or informing providers of the denial violates the Employee Retirement Income Security Act of 1974 (ERISA), the federal law that regulates employee sponsored retirement and welfare benefit plans. The court granted insurers’ motion to dismiss without prejudice, specifically to allow the providers to amend their complaint to demonstrate that waiver or estoppel would apply to the anti-assignment provisions.

The providers filed a second amended complaint, which was dismissed by the court with leave to amend, and the providers filed a third amended complaint in October 2017. The third amended complaint brought two claims: a claim for plan benefits under ERISA and a state law claim under California law alleging that the Blue Cross insurers misled providers about the assignability of benefits (specifically, misrepresenting that benefits were assignable when they were not and also representing that benefits were not assignable when they were). The insurers filed a motion to dismiss on the state law claim, which the court granted on the grounds of insufficient standing because the providers did not properly allege an economic injury. Specifically, the court held that collection costs, bad debt, preventing the providers from assisting their patients in the administrative appeals process and denying providers the opportunity to make alternate payment arrangements or collect additional money from their patients up front were insufficient to allege that the insurers’ conduct resulted in economic injury to the providers. The providers’ claim for benefits under ERISA still stands. However, there is no date set for hearing at this time.

The outcome of this case will set the stage for future litigation and out-of-network payment strategies. In addition to this and other pending cases, out-of-network providers or those considering an out-of-network strategy should closely monitor proposed legislation in their states of operation regarding direct-pay-to-patient methods. Some states, such as Indiana, have proposed legislation requiring insurers to directly reimburse out-of-network providers for certain services. These types of laws, in combination with litigation, will significantly influence the risk associated with pursuing an out-of-network payment strategy.

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2021 Tennessee Code Title 56 - Insurance Chapter 7 - Policies and Policyholders Part 1 - General Provisions § 56-7-120. Assignment of Benefits to Health Care Provider

Notwithstanding any law to the contrary, if a policy of insurance issued in this state provides for coverage of health care rendered by a healthcare provider covered under title 63, the insured or other persons entitled to benefits under the policy are entitled to assign their benefits to the healthcare provider and such rights must be stated clearly in the policy. Notice of the assignment must be in writing to the insurer in order to be effective unless otherwise stated in the policy.
“Emergency medical services” means the services used in responding to the perceived individual need for immediate medical care in order to prevent loss of life or aggravation of physiological or psychological illness or injury;
Means benefits consisting of medical care, provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care, under any policy, certificate, or agreement offered by a health insurance entity; and
Does not include policies or certificates covering only accident, credit, disability income, long-term care, hospital indemnity, medicare supplement as defined in 42 U.S.C. § 1395ss(g)(1), specified disease, other limited benefit health insurance, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that are statutorily required to be contained in any liability insurance policy or equivalent self-insurance;
“Healthcare facility” means a hospital as defined in § 68-11-201, or an ambulatory surgical treatment center as defined in § 68-11-201;
“Healthcare provider” means any doctor of medicine, osteopathy, dentistry, chiropractic, podiatry, or optometry; a pharmacist or pharmacy; a hospital; a home health agency; an entity providing infusion therapy services; or an entity providing medical equipment services;
“lnsured” means any person who has health insurance coverage as defined in § 56-7-109 through a health insurance entity as defined in § 56-7-109; and
“Stabilized” means, with respect to an emergency medical condition, that no material deterioration of the condition is likely, within a reasonable medical probability, to result from or occur during transfer of the individual from a facility.
“ln-network healthcare facility” means a healthcare facility that has a current contract provider agreement with the insured's insurer; and
To whom a participating healthcare facility has granted clinical privileges;
Who provides services to patients of the participating healthcare facility pursuant to those clinical privileges; and
Who does not have a current contract or provider agreement with the insured's insurer.
The assignment of benefits is to an out-of-network facility-based physician; and
A statement that the out-of-network facility-based physician may not have a current contract provider agreement with the insured's insurer;
A statement that the insured agrees to receive medical services by an out-of-network healthcare provider and will receive a bill for one hundred percent (100%) of billed charges for the amount unpaid by the insured's insurer;
The estimated amount of copay, deductible, or coinsurance, or range of estimates that the facility will charge the insured for scheduled items or services provided by the facility in accordance with the insured's health benefit coverage for the items and services or as estimated by the insurance company on its website for its insured or through the available information to the facility at the time of prior authorization; and
A listing of anesthesiologists, radiologists, emergency room physicians, and pathologists or the groups of such healthcare providers with which the facility has contracted, including the healthcare provider or group name, phone number, and website;
The insured or the insured's personal representative signs the written notice, acknowledging agreement to receive medical services by an out-of-network provider or should the insured or insured's personal representative refuse to sign the written notice, the healthcare facility documents in the patient's medical record that it provided the notice and that the patient refused to sign the notice; and
The written notice includes the following statement:

The physicians and other healthcare providers that may treat the patient at this facility may not be employed by this facility and may not participate in the patient's insurance network.

Anesthesiologists, radiologists, emergency room physicians, and pathologists are not employed by this facility. Services provided by those specialists, among others, will be billed separately.

Before receiving services, the patient should check with his or her insurance carrier to find out if the patient's providers are in-network. Otherwise, the patient may be at risk of higher out-of-network charges.

The written notice required by subdivision (c)(2)(B) must be provided to the insured, or the insured's personal representative, prior to when the insured first receives services from the out-of-network facility-based physician. If the insured is receiving medical services through a hospital emergency department or is incapacitated or unconscious at the time of receiving services, the written notice is not required until the insured is stabilized.
The healthcare facility's failure to provide the written notice is due to willful or wanton misconduct of an agent of the healthcare facility; and
Contains an itemized listing of the services and supplies provided along with the dates when the services and supplies were provided;
The out-of-network facility-based physician does not have a current contract provider agreement with the insured's insurer; and
The insurer has paid a rate, as determined by the insurer, that is below the out-of-network facility-based physician's billed amount;
Contains a telephone number to call to discuss the billing statement; provide an explanation of any acronyms, abbreviations, and numbers used on the statement; or discuss any payment issues;
Contains a statement that the insured may call the telephone number described in subdivision (d)(2)(B)(iii) to discuss alternative payment arrangements;
For billing statements that total an amount greater than two hundred dollars ($200), over any applicable copayments, coinsurance, or deductibles, states, in plain language, that if the insured finalizes a payment plan agreement within forty-five (45) days of receiving the first billing statement and substantially complies with the agreement, the out-of-network facility-based physician shall not furnish adverse information to a consumer reporting agency regarding an amount owed by the insured. For purposes of this subdivision (d)(2)(B)(v), a patient is considered out of substantial compliance with the payment plan agreement if the payments are not made in compliance with the agreement for a period of forty-five (45) days; and
Contains a telephone number for the department and a clear and concise statement that the insured may call the department to complain about any out-of-network charges.
Nothing in this subsection (d) applies to accident-only, specified disease, hospital indemnity, medicare supplement, long-term care, or other limited benefit hospital insurance policies.
An in-network healthcare facility does not need to provide an insured with the notice required in subdivision (c)(2) if the healthcare facility employs all facility-based physicians or requires all facility-based physicians to participate in all of the insurance networks in which the healthcare facility is a participating provider or if the healthcare facility contractually prohibits all facility-based physicians from balance billing patients in excess of the cost sharing amount required in accordance with the insured's health benefits coverage for the items and services provided.

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COMMENTS

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 ...
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 ...
What Should An Assignment of Benefits Form Include?
An assignment of benefits form (AOB) is a crucial document in the healthcare world. It is an agreement by which a patient transfers the rights or benefits under their insurance policy to a third-party - in this case, the medical professional who provides services. This way, the medical provider can file a claim and collect insurance payments.
PDF CONSENT TO TREATMENT, ASSIGNMENT OF BENEFITS AND ...
An assignment of benefits is an arrangement where you, the beneficiary, request that your insurance company pay the health benefit payment(s) directly to your health care providers. When you sign the assignment of benefits form, you are essentially entering into a contract with your health care provider to transfer your right of reimbursement ...
Medicare Assignment
The Medicare assignment code is what shows proof that Medicare has agreed to represent you and cover your medical bills. This method allows for easy communication between health providers and Medicare when caring for your medical needs. Participating healthcare providers file for service reimbursement with a Medicare assignment of benefits form.
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.
Assignment of benefits
Assignment of benefits. Assignment of benefits is a legal agreement where a patient authorizes their healthcare provider to receive direct payment from the insurance company for services rendered. Boost patient experience and your bottom line by automating patient cost estimates, payer underpayment detection, and contract optimization in one place.
What is assignment of benefits, 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 ...
What is an assignment of benefits?
An assignment of benefits (AOB) is a legal agreement you sign that lets a third party negotiate, bill, and receive payment from your insurance provider. ... Similar to a health care AOB ...
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 ...
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 ...
Health Care Providers Should Review Assignment of Benefit ...
Implications for Health Care Providers. The Ninth Circuit's holding highlights the importance of a well-crafted assignment provision encompassing a range of claims. All too often providers develop a basic assignment of benefits template. ... If an assignment of benefits is blocked by a self-funded plan's anti-assignment clause, the provider ...
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.
Benefit Claims Procedure Regulation FAQs
The regulation, at § 2560.503-1 (e), defines a claim for benefits, in part, as a request for a plan benefit or benefits made by a claimant in accordance with a plan's reasonable procedure for filing benefit claims. A claim for group health benefits includes pre-service claims (§ 2560.503-1 (m) (2)) and post-service claims (§ 2560.503-1 (m) (3)).
Assignment of Benefits (Health Care) Law and Legal Definition
Assignment of benefits in the context of health care refers to an agreement or arrangement between a beneficiary and an insurance company, by which a beneficiary requests the insurance company to pay the health benefit payment directly to the physician or medical provider. The patient or guardian signs the assignment of benefits form so that ...
Out-of-Network Healthcare Reimbursement
Out-of-Network Healthcare Reimbursement. 50. 312-463-6325. Bio and Articles. 312-463-6258. Bio and Articles.
PDF Assignment of Benefits Guide
Assignment of Benefits. A procedure whereby a beneficiary/patient authorizes the administrator of the program to forward payment for a covered procedure directly to the treating dentist. This is done using box #37 on the ADA claim form. The below image shows the specific instructions for how to complete box #37 for use with assignment of benefits.
PDF ADA Dental Insurance Reform Assignment of Benefits
health care provider for services provided to the subscriber, which are covered under the contract. 10-16-106.7. Assignment of health insurance benefits. (a) Any carrier that provides health coverage to a covered person shall allow, but not require, such covered person under the policy to assign, in writing, payments due under the policy to a
PDF Assignment of benefits
John Hancock Life & Health Insurance Company, Boston, MA 02116 and long-term care riders are underwritten and administered by John Hancock Life Insurance Company of New ... long-term care insurance. If benefits are assigned to a person other than a provider, I understand that I am financially responsible for all charges I incur. Any person who ...
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.
Assignment of Benefits (AOB)
Assignment of Benefits (AOB) is an agreement that transfers the insurance claims rights or benefits of the policy to a third party. An AOB gives the third party authority to file a claim, make repair decisions, and collect insurance payments without the involvement of the homeowner. AOBs are commonly used in homeowners' insurance claims by ...
Tennessee Code § 56-7-120 (2021)
Assignment of Benefits to Health Care Provider. Universal Citation: TN Code § 56-7-120 (2021) Previous Next Notwithstanding any law to the contrary, if a policy of insurance issued in this state provides for coverage of health care rendered by a healthcare provider covered under title 63, the insured or other persons entitled to benefits under ...
PDF § 56-7-120. Assignment of benefits: General Provisions
Assignment of benefits: General Provisions (a)(1) Notwithstanding any law to the contrary, if a policy of insurance issued in this state provides for coverage of health care rendered by a healthcare provider covered under title 63, the insured or other ... limited benefit health insurance, automobile medical payment insurance, or insurance ...

Medicare Assignment: Everything You Need to Know

Frequently Asked Questions

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How to Make Sure Your Provider Accepts Assignment

Provider Participation Stats

What If Your Provider Doesn’t Accept Assignment?

Physicians Who Have Opted Out

Billing Options for Providers Who Accept Medicare

What Is Medicare Assignment of Benefits?

Things to Consider Before Choosing a Provider

A Word From Verywell

What is an assignment of benefits?

What is an assignment of benefits?

How an AOB works

Example of an assignment of benefits

When would you need to use an assignment of benefits?

Assignment of benefits for health insurance

Assignment of benefits for car owners

Assignment of benefits for homeowners

The fraud factor

Pros and cons of an assignment of benefits

Pros of assignment of benefits

Cons of assignment of benefits

The takeaway

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Pros and cons of an assignment of benefits

Pros of assignment of benefits

Cons of assignment of benefits

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Benefit Claims Procedure Regulation FAQs

A-2: Does the regulation apply to benefit claims filed by persons who are both enrollees in Medicare + Choice programs and participants in an ERISA plan?

A-3: Does the regulation apply to a request for a determination whether an individual is eligible for coverage under a plan?

A-4: Does the regulation apply to a request for prior approval of a benefit or service when such prior approval is not required under the terms of the plan?

A-5: Is a plan required to treat all questions regarding benefits as claims for benefits under the plan?

A-6: Do the requirements applicable to group health plans apply to dental benefits offered as a stand-alone plan or as part of a group health plan?

A-7: Do the requirements applicable to group health plans apply to prescription drug benefit programs offered as a stand-alone plan or as part of a group health plan?

A-8: Do the requirements applicable to group health plans apply to contractual disputes between health care providers (e.g., physicians, hospitals) and insurers or managed care organizations (e.g., HMOs)?

A-9: What benefits are disability benefits subject to the special rules applicable under the regulation for disability claims?

A-10: Do the time frames in these rules govern the time within which claims must be paid?

A-12: Does the regulation apply to benefit claims filed by participants in top hat plans, e.g., plans that are unfunded and maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees?

A-13: Would a determination of disability for purposes of receiving a premium waiver under a contributory life insurance plan be governed by the special rules applicable to disability benefits under the claims procedure regulation?

B-1: May a plan require that a claimant complete and file a form identifying any person authorized to act on his or her behalf with respect to a claim?

B-2: Does an assignment of benefits by a claimant to a health care provider constitute the designation of an authorized representative?

B-3: When a claimant has properly authorized a representative to act on his or her behalf, is the plan required to provide benefit determinations and other notifications to the authorized representative, the claimant, or both?

B-4: What kind of administrative processes and safeguards must a plan have in place to ensure and verify appropriately consistent decision making?

B-5: For purposes of furnishing relevant documents to a claimant, what kind of disclosure is required to demonstrate compliance with the administrative processes and safeguards required to ensure and verify appropriately consistent decision making in making the benefit determination?

B-6: Do the regulation's limits on the use of pre-dispute arbitration extend to other actions that a participant or beneficiary might pursue with regard to a health care provider or other person or entity?

C-1: When does the time period for making an initial decision on a claim begin to run?