What is Assignment of Benefits (AOB) in Medical Billing?

If you’ve ever dealt with insurance claims, you already know—it’s not for the faint of heart. The back-and-forth, the paperwork, the waiting... It’s a grind. But there’s one little document that can turn the whole game in your favor: the Assignment of Benefits, or AOB.

At Thrive Medical Billing, we’ve seen how this single form can shave weeks off the payment cycle, reduce stress for patients, and give providers a clearer shot at getting paid—accurately and on time.

Let’s break it down, in plain language.

So, What is an AOB?

Put simply, the Assignment of Benefits is a form that says:

“Hey, dear insurance company—skip the patient and send the check directly to the provider.”

It’s a legal agreement that patients sign, giving their healthcare provider permission to deal with the insurer and collect payment on their behalf.

Without an AOB? You’re asking the patient to:

Pay everything upfront
Chase their insurance company
Wait (and wait) for reimbursement

That’s a terrible experience for both sides. With AOB, we cut out the mess and make sure the money goes where it’s supposed to—fast.

Here’s How the AOB Process Actually Works

We’ve handled thousands of claims that use AOB. Here’s what the real-world workflow looks like:

Step 1: Patient Signs AOB at Registration

Once registered, patients fill out various forms and sign their AOB; that one signature gives you legal authority to submit claims directly and be paid.

Step 2: Provider Delivers Care & Submits the Claim

Services are rendered and documented. CPT/ICD codes for services provided (as appropriate) and submission of claims directly to insurance companies is done as soon as possible.

Step 3: Insurance Reviews and Sends Payment

Once submitted, insurance company reviews your claim. If everything checks out as expected, then the amount comes immediately to your bank account.

Step 4: Patient Gets Their EOB

The patient still receives an Explanation of Benefits (EOB), showing what was covered and what’s still their responsibility—like a co-pay, deductible, or any non-covered items.

What’s Actually in the AOB Form?

Not all AOBs are created equal. A solid one includes:

Patient Info: Name, DOB, insurance details
Provider Info: Your legal business name and NPI
Authorization Clause: Legal language saying you're authorized to bill directly
Scope of Services: What the AOB covers
Patient Signature: Proof of consent
Optional: An irrevocability clause, preventing the patient from taking it back later

And yes, we review these forms for you if you’re unsure whether your version is airtight.

Why AOB is a Win-Win?

You’d be surprised how much smoother things run when the AOB is in place.

For Patients:

No Upfront Payment Stress: They don’t need to empty their savings or max out a credit card just to get care.
No Chasing Reimbursement: We deal with the insurer, not them.
Better Access to Care: Less friction = faster treatment decisions.

For Providers:

Faster Cash Flow: Payments come directly to you—no middleman, no awkward patient collection.
Less Collection Headache: You don’t have to hound patients for money.
Cleaner Claims, Fewer Denials: AOB gives you more control over how the claim is submitted, coded, and followed up on.

In fact, clinics that rely on AOBs often report getting paid 30% faster and seeing fewer claim denials. We’re not surprised—we see it happen all the time.

But Wait: Is There a Catch?

As with everything in healthcare, there may be hidden terms.

For Patients:

Loss of Control: For them, relinquishing control can be frustrating and they may prefer handling their claim on their own.
Risk of Balance Billing: If your out-of-network provider and insurance payment doesn't cover everything, the patient may receive a balance billing invoice to make up any shortfalls in coverage.
Fraud Risks: Accountable Office Budgets have occasionally been exploited by unsavory providers, so we always advocate for transparency and honest billing practices.

For Providers:

Your fate rests with the Insurance Timeline: Should they postpone or deny, your wait may only lengthen further.
Policy Complexity: Every insurer has different rules. If you don’t know them, you might mess up the claim.
Disputes Still Happen: Just because you got the AOB doesn’t mean the insurance company won’t push back on the claim.

We’ve seen providers lose out on tens of thousands just because the AOB form was outdated or improperly worded. Don’t let that happen. Thrive Medical Billing makes sure your documents—and your process—are accurate.

AOB and Revenue Cycle Management: Why It Matters

AOB isn’t just a form—it’s a strategy. A well-managed AOB process can tighten up your entire revenue cycle, from claim submission to payment posting. Fewer payment delays. Fewer denials. Better predictability in your monthly revenue.

And if you’re using automated systems (like ERA integrations), AOB makes it easier to track and match payments with claims.

At Thrive, we treat AOB like a first line of defense for revenue leaks.

Final Word: Use AOBs the Right Way—or Lose Money

AOBs are the unsung heroes of healthcare billing. They streamline payments, reduce stress for your patients, and give you more control over the billing process. But if you’re not using them correctly—or worse, not using them at all—you’re probably leaving money on the table.

Thrive Medical Billing doesn’t just file claims—we optimize the entire system. From onboarding the patient to collecting the last dollar, we make sure your AOBs are rock solid and working in your favor.