No Fault Assignment of Benefits AOB

An AOB, the No-Fault Assignment of Benefits form, is considered a legal and binding contract, in which the healthcare provider-assignee (i.e., the physician) assumes all of the legal rights and privileges of the injured party-assignor (i.e., the patient).  To better explain the AOB, it is wise to shed some light on the Personal Injury Protection (“PIP”) portion of automobile insurance policies.  

PIP is an extension of car insurance.  In case of injury due to a car accident, PIP covers medical expenses and, in some cases, lost wages and other damages. PIP is sometimes referred to as “No-Fault Coverage” because the statutes enacting it are generally known as “No-Fault” Laws.

PIP is designed to be paid without regard to “fault.”  That is, PIP will be paid to a person injured in a car accident even if that person was legally liable for causing the accident. PIP is also referred to as “No-Fault” because, by definition, a claimant’s or insured’s insurance premium should not increase due to a PIP claim.

When a patient wishes to receive medical treatment from a physician for injuries sustained in a car accident, he or she executes an AOB.  With the execution of this form, the treating physician assumes the benefits of the Personal Injury Protection “PIP” portion of his or her patient’s automobile policy.

Necessity and Requirement of Assignment of Benefits

The AOB form must be submitted to insurance carriers for no-fault medical treatment. It is very important that the AOB be executed properly with signatures and dates.

Can a physician bill the no-fault patient directly?

A physician who has accepted a no-fault assignment of benefits from a no-fault patient may NOT pursue the patient directly for payment even if the no-fault insurance carrier denies payment for services based upon a determination that the services were not medically necessary.  

The AOB is considered a legal contract, wherein the health provider assumes all of the legal rights and privileges of the injured party. The provider cannot arbitrarily disregard the provisions of a previously accepted no-fault assignment.   

What are a physician’s options if he or she is in disagreement with an insurer’s denial of claim?

 If the provider accepts a no-fault AOB, and the no-fault insurer denies continued treatment based on lack of medical necessity, the provider is legally bound to resolve this question of fact through either no-fault arbitration or a court of competent jurisdiction.   

What if the physician chooses not to exercise these remedies?  

Failure to exercise these remedies constitutes an acceptance of the insurer’s determination that medical services rendered to the patient were not necessary.  Under the terms of the AOB, the healthcare provider may not then bill the patient for services rendered.

Possible Revocation of Assignment of Benefits

The AOB is considered revoked if the assignor (i.e., the patient) commits a policy violation.  Insurance carriers are entitled to certain cooperation from the patient to verify submitted no-fault claims. This cooperation can include, but is not limited to, answering questions, either under oath or otherwise.  It can also include a medical examination by an independent medical examiner, commonly known as an “IME.”

If the patient refuses to cooperate with the insurance carrier (e.g., by failing to appear for an IME), or in cases where there is lack of coverage, the insurance carrier may deny the entire PIP portion of the patient’s insurance policy. In that case, the AOB will be considered revoked.  Physicians will then be able to pursue payment directly from the patient.

The possibility of revoking an AOB was clearly set forth in a May 12, 2006 opinion letter issued by the Office of General Counsel for theNew York State Insurance Department.   The relevant portion of the opinion letter states:

The assignment language found in Regulation 68-C, NYS Form NF-3 and NYS Form NF-AOB precludes the assignee from pursuing the assignor for medically unnecessary health services, unless the denial of benefits is based on a lack of coverage or violation of policy based on the conduct of the assignor.

Can the AOB Form Be Modified?

There is no need to try to get creative with the New York State AOB form.  Modifying the form to include language that would make the patient responsible to pay for services the provider renders is prohibited and will be given no legal effect.  According to the Office of General Counsel for New York State’s Insurance Department:

Statements within assignments such as “in the event that the No-Fault carrier fails or refuses to pay for the services provided then I, the patient, agree that I will be responsible for the value of services rendered by said Doctor,” are prohibited under the No-Fault regulation. Such language should be given no legal effect and the assignee may not pursue the assignor directly for unnecessary services.

To download a sample Assignment of Benefits (AOB)  form, please see our Download Section.

We are specialists in no-fault billing and collection.  To learn more from us about Assignments of Benefits, please call (516) 427-5400 for an immediate, free consultation.  

*1, http://www.dfs.ny.gov/insurance/ogco2006/rg060507.htm

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  3. Assignments & Authorizations to Pay No-Fault Benefits

    The optional authorization language in NYS Forms NF-3, NF-4 and NF-5 state: "I authorize payment of health benefits to the undersigned health care provider or supplier of services described below. I retain all rights, privileges and remedies to which I am entitled under Article 51 (the No-Fault provision) of the Insurance Law. " (Emphasis added).

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  6. No Fault Assignment of Benefits AOB

    An AOB, the No-Fault Assignment of Benefits form, is considered a legal and binding contract, in which the healthcare provider-assignee (i.e., the physician) assumes all of the legal rights and privileges of the injured party-assignor (i.e., the patient). To better explain the AOB, it is wise to shed some light on the Personal Injury Protection ...

  7. PDF New York Motor Vehicle No-fault Insurance Law Assignment of Benefits

    NEW YORK MOTOR VEHICLE NO-FAULT INSURANCE LAW ASSIGNMENT OF BENEFITS FORM (FOR ACCIDENTS OCCURRING ON AND AFTER 3/1/02) (Print patient's name) Claim Number: Title: Second Amendment to Regulation 68-C (11 NYCRR Part 65-3): Appendix 13 - No-Fault Inurance Law: Cover Letter Author:

  8. PDF NY Motor Vehicle No-Fault Inurance Law Cover Letter

    If box number 3 ("Policy not in force on date of accident") on the front of this form is checked as a reason for this denial, you may be entitled to No-Fault benefits from the Motor Vehicle Accident Indemnification Corporation (M.V.A.I.C.) (646-205-7800) located at 100 William Street, New York, New York 10038.

  9. PDF New York State Motor Vehicle No-fault Insurance Law (Assignment of

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  16. PDF no fault

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  17. PDF NY No-Fault Frequently Asked Questions

    What is an assignment of benefits? The New York State No-Fault system provides for certain benefits to qualified persons injured in automobile accidents. An assignment of benefits form, signed by the patient, transfers the benefits and responsibilities that are associated with the No-Fault claim from the injured person to the health service ...

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  19. PDF NY Motor Vehicle No-Fault Inurance Law Cover Letter

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  20. PDF New York Motor Vehicle No-fault Insurance Law Verification of Treatment

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