How Assignments of Benefits (AOB) Impact Insurers

Assignment of benefits, commonly referred to as AOBs, are agreements that enable a third party to file an insurance claim, make certain decisions, and directly bill an insurer on behalf of a policyholder.

Faults with AOB

Companies can use AOB loopholes for their benefit to the detriment of policyholders. If you use an AOB with a contractor, an untrustworthy one may charge your insurance company for work that wasn’t necessary or for work they didn’t complete then pocket that extra money.

 Using an AOB is putting your insurance claim in the hands of others. The person who submits the claim on your behalf can claim whatever they like. So, if you’re signing an AOB, it is crucial to make sure that you trust the person who hands it in.

AOB in Healthcare

An assignment of health policy benefits is an agreement between a beneficiary and an insurance company, where the insurance company will pay the health benefit directly to the physician.

The AOB Full Form

The assignment of benefits form in Louisiana should include a few key details:

● Accurate personal details.

● Confirmatory terms, like ‘irrevocable.’

● Signature of the patient.

When signing an AOB, it’s important to note that there are a few cons to doing so. For example, the patient loses the power to negotiate because they are not involved in the payment process. The patient also no longer holds the right to sue the medical practitioner - instead, the healthcare provider has the right to sue the insurance provider.

Impact on Insurers

Much like there’s an impact on policyholders, also impacts the insurers. If an insurer decides to dispute an inflated AOB bill, they are fighting in an era of plaintiff-friendly court verdicts. Additionally, if an insurance company goes to court and loses, it must pay compensation to the plaintiff’s attorneys. But if they win, they are not owed compensation. Both options are cost-prohibitive and this is why many insurers choose to settle.

A high number of lawsuits and inflated claims drive up the legal costs for insurance companies. To pay those costs, insurers have no choice but to pass the higher fees onto their customers in the form of heightened premiums.

Contact an Expert

Our team of highly-trained attorneys at Montiel Hodge are experts in claims relating to Assignments of Benefits. Contact us today so we can get started on your case.