Assignment of Benefits

Assignment of benefits is a signed authorization from a dental patient or subscriber that directs the insurance carrier to remit payment for covered services directly to the treating dental provider rather than to the policyholder. This legal document transfers the right to receive insurance proceeds from the patient to the practice, establishing a direct payment relationship between the carrier and the provider. The AOB is typically included as part of the new patient intake paperwork and remains in effect for all claims submitted on the patient's behalf until revoked in writing.

The AOB plays an important role in the financial relationship between providers, patients, and payers. When an AOB is in effect, the practice can bill the insurance carrier and receive payment directly, only needing to collect the patient's cost-sharing portion such as deductibles, coinsurance, or copayments at the time of service. Without an AOB, the carrier sends the full benefit payment to the patient, and the practice must collect the entire fee from the patient and rely on the patient to submit for reimbursement independently. Some insurance plans, particularly certain indemnity and out-of-network arrangements, may not honor assignment of benefits regardless of the patient's authorization.

For dental practices, maintaining current AOB forms is a foundational element of revenue cycle management. A missing or expired AOB can result in insurance payments being misdirected to the patient, creating significant collection challenges and delaying cash flow. Billing teams should verify that an AOB is on file before submitting claims and should flag any patients whose plans do not accept assignment. Practices that treat a high volume of out-of-network patients should have a clear financial policy addressing how collections are handled when assignment is not accepted by the carrier.