In healthcare administration, the acronym AOR often appears on medical bills or registration forms. In the context of medical billing and insurance, AOR primarily stands for “Assignment of Rights,” though it is frequently used interchangeably with “Assignment of Benefits” (AOB). This legal mechanism is a standard procedure designed to streamline the financial transaction between the patient, the healthcare provider, and the insurance company.
Defining Assignment of Rights
Assignment of Rights is a formal, legal agreement that transfers the patient’s right to receive payment from their insurance company directly to the healthcare provider. When a patient purchases a health insurance policy, they are the primary beneficiary entitled to the claim payment for covered services. The AOR document changes this dynamic by giving the provider the legal standing to pursue and collect that payment on the patient’s behalf.
By signing this document, the patient authorizes the insurer to send the reimbursement check straight to the doctor, clinic, or hospital. This transfer of rights is crucial because, without it, the insurance company would, by default, be obligated to send the payment to the patient. The provider’s ability to receive payment directly from the payer is entirely dependent on this signed authorization.
How AOR Facilitates Payment
The core function of the Assignment of Rights is to simplify the financial pathway for all parties involved in the transaction. For the healthcare provider, requiring an AOR is a standard business practice that helps to secure and accelerate the revenue cycle. It reduces the risk that a patient will receive the insurance payment but fail to forward it to the provider, which would force the provider to pursue collections from the patient.
Once the patient signs the AOR form, the provider submits the claim directly to the insurance company. The insurer then reviews the claim, determines the amount covered by the policy, and sends the payment directly to the provider’s billing office. This direct transfer of funds bypasses the patient as a financial intermediary, which leads to faster reimbursement for the provider, often within 30 to 45 days. This mechanism allows providers to maintain a more stable cash flow.
Patient Responsibility and Consent
While the AOR transfers the right to insurance payment to the provider, it does not absolve the patient of all financial responsibility. The patient remains personally liable for any costs that the insurance plan does not cover. This typically includes copayments, deductibles, and co-insurance amounts, which are the patient’s out-of-pocket obligations outlined in their policy.
The patient’s signature on the AOR form is a formal, legally significant act of consent. It explicitly authorizes the provider to communicate with the insurer and pursue the claim, sometimes including the right to appeal a denied claim. Because the AOR may also grant the provider the right to access necessary medical information for claim processing, patients must review the document carefully before signing. Understanding the terms ensures that the patient is aware of the exact scope of the rights being transferred and their remaining financial obligations.