Assignment of Benefits

An authorization by a patient that directs their insurance payer to send payment directly to the healthcare provider rather than to the patient.

Assignment of benefits is how you get paid directly by the insurance company instead of having the patient receive the check and then pay you. When a patient assigns benefits to you, they are telling their payer to send the money straight to your practice. For participating providers, assignment of benefits is built into your contract. You agreed to accept the payer's fee schedule, and in exchange, the payer sends payment directly to you. The patient is responsible only for their cost-sharing portion. For out-of-network providers, assignment of benefits is more complicated. The patient has to sign a separate assignment of benefits form authorizing the payer to pay you directly. Without it, the payer sends the check to the patient, and you have to collect from the patient. Some payers honor out-of-network assignments of benefits, others do not. Medicare has specific rules about assignment. Participating providers must accept assignment on all claims. Non-participating providers can choose to accept or not accept assignment on a claim-by-claim basis. If you do not accept assignment, Medicare pays the patient, and you can charge up to the limiting charge (115% of the Medicare allowed amount for non-participating providers). The practical importance of assignment is cash flow. When the payer pays you directly, you get paid faster and more reliably than if the payment goes to the patient first. Patients who receive insurance checks sometimes spend the money and never pay you. Assignment eliminates that risk. For credentialing applications, payers may ask whether you accept assignment. For Medicare enrollment, you indicate on your CMS-855 whether you are participating (always accept assignment) or non-participating (may or may not accept assignment on each claim). Most providers choose participating status because it simplifies billing and ensures direct payment.