In healthcare billing, what does the 'assignment of benefits' prevent?

The assignment of benefits is a crucial concept in healthcare billing that allows healthcare providers to directly receive payment from the insurance company for the services they render to patients. When a patient signs an assignment of benefits form, they authorize their insurance provider to make payments directly to the provider instead of to the patient. This prevents direct payments to health providers when the assignment is not executed, thus ensuring that the provider is compensated promptly and reducing the likelihood of the patient encountering financial burdens upfront.

It's important to recognize that the primary purpose of this arrangement is to streamline the payment process and improve cash flow for healthcare providers, as it minimizes the necessity for patients to pay upfront and then seek reimbursement from the insurer. Consequently, this assignment is foundational to effective billing practices and helps maintain continuity of care for patients by facilitating timely payments for services rendered.