Insurance Assignment Definition

For each of your patients in Therabill, you have the ability to indicate whether or not you Accept Assignment.  This option can be found on the add / edit insurance card form for a patient.  The options for accepting assignment are yes or no.

What does accept assignment mean?

Just to be clear up front.  This is NOT meant to be legal or coding advice.  You should always check with the individual insurance plan or program (especially if you are a participating or in-network provider).  If you are a participating (or in-network) provider for an insurance company, then you should always check the contract that you have with that payer.

It would nearly be impossible for Therabill to give a general definition of "Accept Assignment".  But if we were to give a general meaning for accept assignment, it would be as follows.  

  • You are indicating that the case is being assigned to you and payment should be sent to you.  If you indicate No, then you are indicating that payment should be sent to the patient.
  • You are accepting the payers rate for the service.  You may be paid at a lower rate than what you charge for that service.

Can I freely choose to accept assignment or not to accept assignment.

Usually, the answer is no.  If you are billing Medicare, then you usually have to accept assignment.  If you are an in-network provider, then you probably need to accept assignment.   You should call the payer to find out whether or not you can not accept assignment.

I accepted assignment and the payer still sent payment to the patient.

You should call the payer to find out why they are sending payment to the patient.  Indicating that you accept assignment and having Box 13 of the CMS-1500 filled with patient signature (or on file) should indicate to the payer to send payment to the billing provider (Box 33 of the CMS-1500).  However, there are always cases where the payer doesn't send payment to the billing provider even when you have the CMS-1500 filled in correctly. 

I did not accept assignment and payer still paid me.

You should call the payer to find out why they are sending payment to you instead of the patient.  Indicating that you do not accept assignment and not having Box 13 of the CMS-1500 filled with patient signature (or on file) should indicate to the payer to send payment to the patient  However, there are always cases where the payer sends payment to the billing provider even when you have the CMS-1500 filled in correctly. 

What does Therabill do when I do not accept assignment for a patient.

Therabill will fill out the CMS-1500 in the correct way to indicate that you do not accept assignment.  Box 13 will be left blank and Box 27 will be marked as NO on the CMS-1500.  However, Therabill also uses the accept assignment to automatically set the status of your sessions to Closed / Patient Due after you have billed the session out to insurance.  Here is an explanation.

Remember, Therabill keeps a status of all of your therapy sessions (charges) to help you with your revenue cycle management.  When you create a new session, and you indicate that you want to initially bill it to insurance, then the status of that session is considered open (open to insurance).  A session that is open to insurance will show up as a pending charge on the client statement (billing your patient using Therabill).  If you send a session in to the bill insurance area for a patient that you did not accept assignment for, then once you actually create the insurance claim, Therabill will automatically change the status of the session (charge) to closed.  A closed session is a session that is closed to insurance and the patient owes the remaining balance due (the balance due is the charge amount minus any payments and adjustments applied to it).

Where do I indicate that I do not accept assignment for a patient.

This is on the add / edit insurance card form for a patient.  At the bottom of the add / edit insurance card form (in the Advanced section), you will see an option to indicate whether you accept assignment.  Make your selection there for the insurance card and then apply the edits.  IMPORTANT:  Always remember to save the client before you close the edit client form.

Can I set a default accept assignment?

Yes.  By default, Therabill will always mark Accept Assignment as Yes when you are adding a new patient in Therabill.  If you would like Therabill to automatically choose No when you are adding a new patient, then you will want to change your global settings for the clients.  To do this, in the top navigation bar of Therabill, hover your mouse over Admin and then in the drop down menu, put your mouse over Defaults/Settings.  In the sub-menu that appears, choose "Client Settings".  In the client settings page, put No next to Accept Assignment and then (important) Save.

NOTE: Changing the default accept assignment does not change anything you already have entered in to Therabill.  If you have already entered clients, and those clients were entered with accept assignment as Yes, then changing the default accept assignment to "No" will not change the accept assignment on those already entered patients.

This is a very common question among business owners applying for a bank loan. Let's look at an example.

Bob wants to borrow $2 million from his local bank, to expand his business. His banker agrees to lend him the money, but wants to have life insurance in place on Bob's life. Why? Because if Bob tragically dies before the loan is paid off, his banker doesn't want to have to chase his wife or his estate for the money.

So, the race is on for Bob to get a policy. He wants that coverage quickly so he can close the loan and get his money. He gets prequalified for coverage, finds a company that will give him good underwriting, and submits an application. The application is approved, the policy is delivered, he pays for it, and the coverage is put into force.

Now he is ready to execute a collateral assignment. He gets a form from his bank, or from the insurance company – whichever the bank prefers – and completes it. His wife is the beneficiary, and the bank is the assignee. He gets the money from the bank and sinks it into his business.

Now let's suppose he unfortunately meets his demise a year later. His wife files a claim. The claims department of the insurance company pulls the file and notices that the benefit has been collaterally assigned to the bank. They contact the bank and ask for documentation of any outstanding balance on the loan. The bank provides this, gets paid, and then Bob's wife gets the rest of the death benefit.

The use of a collateral assignment makes sure the lender gets paid only what they are due. If the bank had been made the beneficiary, they would've been given the full death benefit, even if some of the loan had already been paid off. They would've been overpaid, and Bob's wife would've been given nothing.

If you are applying for life insurance to secure your own business loan, remember that there is no reason to make the lender the beneficiary. Use a collateral assignment and make sure your broker walks you through its execution.

Please feel free to contact me with additional questions.

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