How Assignments of Benefits (AOB) Impact Insurers
AOB
Understanding Assignment of Benefits (AOB)
Assignment of Benefits (AOB) allows a third party to file an insurance claim, make decisions, and bill an insurer directly on behalf of a policyholder.
Potential Pitfalls of AOB
While AOBs can streamline processes, they also present risks:
Exploitation of Loopholes: Untrustworthy contractors may exploit AOB agreements to charge for unnecessary or incomplete work, pocketing the excess funds.
Loss of Control: When you sign an AOB, you relinquish control over your insurance claim. The third party can potentially claim any amount they choose. It’s essential to trust whoever you authorize to act on your behalf.
AOB in Healthcare
An AOB in healthcare is an agreement where benefits are assigned to a physician, allowing the insurance company to pay the healthcare provider directly.
Key Details for AOB Forms
In Louisiana, an AOB form should include:
Accurate Personal Information: Ensure all details are correct.
Confirmatory Terms: Include terms such as "irrevocable."
Patient Signature: The patient must sign the form.
Drawbacks of Signing an AOB
Patients should be aware of several disadvantages:
Loss of Negotiation Power: Patients lose the ability to negotiate payment terms since they are not directly involved in the process.
Right to Sue: The right to sue the healthcare provider transfers from the patient to the provider, should disputes arise with the insurance company.
Impact on Insurers
AOBs also affect insurers:
Disputing Claims: If insurers challenge inflated AOB bills, they face the risk of losing in a frequently plaintiff-friendly legal environment, resulting in significant legal costs.
Cost of Litigation: Winning in court does not guarantee compensation for the insurer, making litigation expensive. Consequently, insurers often choose to settle to avoid high legal expenses.
Rising Premiums: The increased lawsuits and inflated claims lead to higher legal costs, which insurers may pass on to customers through increased premiums.
Contact an Expert
At Montiel Hodge, our team of experienced attorneys specializes in Assignment of Benefits claims. Contact us today to discuss your case and get the assistance you need.
