Assignment of Benefits

One of the main questions that needs to be answered when billing a claim is:

Who should get paid?

The CMS 1500 claim form is where you would tell the insurance carrier where the payment should go. The health insurance carrier will use the information that the medical biller enters on the claim form as a means to instruct them how they should issue the payment for the claim, either to the patient or to the medical provider directly. 

 Box 13 on the CMS 1500 claim form is where you make that designation.

Box 13 of the CMS form states “Insured or Authorized Person’s Signature: I authorize payment of medical benefits to the undersigned physician or supplier for services described below.”

Assigned billing means that all payments related to that claim will be paid to the physician or supplier. This is accomplished by having the signature of the authorized person in box 13 of the CMS 1500 Form. 

Unassigned billing means all payments related to that claim will be paid to the patient. This is accomplished by leaving box 13 of the CMS 1500 form blank.

Because the patient would have left the office when the CMS form is created, a “live” patient signature is usually not possible. To solve the problem of not having the patient available when a claim needs to be billed, the provider’s office will have the authorized person sign an Assignment of Benefits form (AOB) when they are in the office.

This signed Assignment of Benefit form will remain in the patient’s file unless revoked. To revoke, simply means to cancel the form out. The patient will contact the provider’s office to let them know that they want to change the Assignment of Benefit Form that they have on file. The old form will be replaced with the new and future claims will be handled in accordance with the new form.

Because a signed AOB form is on file, the notation “SIGNATURE ON FILE” is placed in Box 13 of the CMS 1500 form, instead of a signature. This means that in lieu of a signature, written permission is on file to have all payments made to the provider of service.

Failure to have a signed AOB form on file means that Box 13 must be left blank and all payments will be made to the patient.

In order for claims payments to be issued correctly, two things have to happen:

  • The Medical Biller is responsible for checking to make sure that all claims have the proper assignment; the CMS 1500 form must have the correct information in Box 13.
  • The health carrier must pay the claims based on the information that is in Box 13.

Box 13 may not be the only factor that affects the assignment of benefits, the carrier may have some rules that apply.

For Example:

  • In network providers are usually paid directly, in spite of the assignment.
  • Out of network provider benefits are usually paid to the patient in spite of the assignment.
  • Facility services, like hospitals are usually paid to the facility.

Any doubt, call the health carrier to confirm how the claim will be paid.

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