Assignment of Benefits (AOB) Guidelines
If you are a participating supplier, then you are required by Medicare to accept assignment. If you are a nonparticipating supplier, then you may choose on a claim-by-claim basis whether or not you would to accept assignment. Nonetheless, if you are going to bill a claim assigned, you must have an Assignment of Benefits (AOB) form signed and dated by the patient.
Accepting assignment indicates that you agree to accept the allowable that Medicare assigns to the item as payment in full and will not bill the patient more than his/her deductible or copay (20%) amounts. By signing this agreement, the patient agrees that he/she will allow Medicare to pay you his/her benefits based on the coverage that Medicare determines. You, as the provider, may request a review or appeal if you do not agree with the Medicare approved amount, but you may not bill the patient for the difference between the allowed and the billed amount.
You must be sure to have the AOB in the patient's file. You must also be sure to have each item that the patient received on the form, or a one time payment authorization which will apply to the current claim and any future claims you have for this patient. When you transmit (or mail) the claim, you do not need to include a copy of this form; you only need to indicate that the patient signed the form (Signature on File) and on what date he/she signed it. If the patient is physically or mentally unable to sign the form, a representative may sign it for him/her, but the signature line must also clearly indicate the patient's name, who the representative is, the representative's address and relationship to the patient and why the patient cannot sign.
Be aware that if Medicare audits you and requests a copy of this form and it is not completed to their specifications, they will request an overpayment. You must have this information on file before you bill Medicare.
This term refers to insurance payments made directly to a healthcare provider for medical services received by the patient. Assignment of benefits occurs after a claim has been successfully processed with an insurance company.
As Assignment of Benefits (often abbreviated to AOB) simply means that the patient is asking for their payment of their health benefits to be transferred to the doctor to used as payment.
In some medical offices, there is a form known as an ‘Assignment of Benefits’ that allows the patient to transfer these benefits automatically. This reduces the need to bill a fee for service on each transaction, which can be appealing to some patients.
Typically, providers or types of services listed below must accept assignment of benefits:
- Clinical diagnostic laboratory services;
- Physician services to individuals dually entitled to Medicare and Medicaid;
- Services of physician assistants, nurse practitioners, clinical nurse specialists, nurse midwives, certified registered nurse anesthetists, clinical psychologists, and clinical social workers;
- Ambulatory surgical center services for covered ASC procedures;
- Home dialysis supplies and equipment paid under Method II;
- Ambulance services;
- Drugs and biologicals; and
- Simplified Billing Roster for influenza virus vaccine and pneumococcal vaccine.
It is important to note that not every patient has the contracted right to do so. Even if the patient signs as AOB form, the insurance company may not have to honor it if the patient cannot contractually assign their rights to anyone.
As a medical office it is important to understand most of the core insurance plans your office works with and how the patients benefits are typically paid.