Everything You Need To Know About AOB In The Medical Billing Process?

| Updated on March 27, 2024

Medical billing is a wholesome process that consists of a multitude of terms and steps. Some people might think that it is a simple procedure that involves only a data entry task. Although it isn’t the reality. 

A complete medical billing process starts as soon as the patient walks into the clinic, hospital or any other healthcare facility to get its medical condition treated. It goes on from information processing to claim submission and ends up on when the doctor collects complete reimbursements. 

So in order to understand the nitty-gritty terms involved in this procedure, I’ve mentioned a complete guide that can help you understand a quite particular aspect involved in the medical billing process_ Assignment Of Benefits. 


It is an official document that is used to send requests to the healthcare insurance companies on the behalf of the respective healthcare provider. Patients/plan’s members sign this document to request the insurance companies so they could pay for their health benefits. 

However, healthcare insurance companies do not honor this request in order to accept it. But they can accept this request depending upon the patient’s or member’s health benefits contract or State Law. 

Impact of State Law:

It is the “Contract” that allows or prohibits the insurance companies to pay for the health benefits for that particular patient. While there are some states that have laws that allow insurance to honor AOB, even the contract of members prohibits them to do so; such as in Florida.  

In that case, even if the contract has prohibited the assignment of benefits, but State Laws like Florida and Louisiana would accept this request and approve AOB. Even prohibited in the contract, patients will get the payment of health benefits. 

In such a scenario, healthcare practitioners can claim for their services from the patients and their insurance payers. Even though those providers who have outsourced their medical billing and coding procedures can also avail this opportunity. Because healthcare BPO companies can assist healthcare practices in such complicated cases as well. 

Impact On Medical Billing Process:

Assignment Of Benefits allows healthcare providers to directly claim the payment from the insurance company of the respective patient. It occurs only after the healthcare insurance company receives and accepts the medical claim from a  particular healthcare facility. 

Since the Assignment of Benefits means that the patients are demanding for payment of their health benefits. So the insurance companies have to transfer payment to the doctor in the form of reimbursements for their services. 

Although some healthcare facilities interpret AOB as a means to automatically transfer their benefits. Hence, they find it as a real catalyst that boosts their medical billing process. Ultimately, it enables them to collect more revenue in less time that streamlines revenue cycle management. 

Because AOB reduces the need to prepare explicit bills for each service on distinctive transactions. That somehow can be appealing to some patients as well. Certainly, it is only to get rid of their healthcare expenditures. 

Only the medical care practitioners who belong to the following specialties can accept the Assignment of Benefits; 

  1. Home dialysis supplies and equipment paid under Method II.
  2. Clinical diagnostic laboratory services.
  3. Simplified Billing Roster for influenza virus vaccine and pneumococcal vaccine. 
  4. Physician services to individuals dually entitled to Medicare and Medicaid.
  5. Drugs and biologicals.
  6. Ambulatory surgical center services for covered ASC procedures.
  7. Ambulance services.
  8. Services of physician assistants, nurse practitioners, clinical nurse specialists, nurse midwives, certified registered nurse anesthetists, clinical psychologists, and clinical social workers. 

Point To Ponder:

Always remember that every patient has signed some contract. Even if the patient’s contract allows AOB, still a healthcare insurance company can deny honoring the request. It only depends on the consent of the patients. So if a patient would sign for a contract, only in that case, it would get accepted by the insurance payers. 

It seems quite complicated, isn’t it? Therefore most healthcare facilities don’t prefer to indulge in administrative responsibilities and they outsource medical billing services to professional medical billing companies. In this way, healthcare BPO companies assist healthcare practices to deal with insurance payers and patients’ problems related to the medical billing system. 

While healthcare practitioners enjoy their comfort and pay more attention to provide quality care services to their patients. It not only streamlines their business operations but also elevates their customer base. All of these factors collectively contribute to their business growth and lead them to their success goals. 

Want to improve your revenue cycle management system to an advanced level? Medcare MSO is a reliable medical billing company that has been helping more than thousands of practitioners with highly supportive medical billing solutions. Get in touch with us to make a difference for your business today!.

Priyam Ghosh

Tech and Internet Writer

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