I’m going to discuss the concept of assignment of benefit and how important it is in the long-term care (LTC) world. It’s important for a couple of reasons. Number one, when an individual needs care and they have a policy, if the provider, meaning the registry or agency does not take an assignment, that means the individual has to start paying out of pocket until the insurance company begins to reimburse. People can’t afford to do that so they’d be stuck having to find money in order to get their care commenced.
What the assignment does is it gives the provider, agency or registry, the capacity to commence care immediately without having to get money from the insured person and then start billing and corresponding and dealing with the insurance company directly. So, that means the individual can start getting care right away, and never have to be involved in the paperwork because the assignment gives the agency or registry the ability to correspond and transact directly with the insurance company. So it takes the hassle away from the person receiving the care, and dealing with invoices and writing checks and waiting for reimbursement and dealing with the paperwork associated with these claims.
For the agency and registry, it’s my belief from my experience in dealing with some of the largest agencies and registries in the state, that it is critical for those companies to take an assignment because the assignment gives the entity the strength of being an insured entity. In other words, the assignment allows the entity to stand in the shoes of the insured person and receive the same rights and benefits under the policy as the insured person. What that does is protects the entities receivables in a way that are not otherwise protected in the absence of the assignment. In other words, without the assignment, the only recourse an agency or registry has would be against their own client, the insured person. For reasons I stated before, you don’t want to sue your own client for the following reasons: 1) You never want to sue your clients; 2) You’re going after elderly people to pay you money-it just doesn’t feel good; 3) Oftentimes they don’t the funds to pay; 4) It’s expensive to file and prosecute and lawsuit; and 5) With an assignment, you don’t need to.
With an assignment, the agency has the capacity to protect its receivables and go after the insurance company directly if there are short pays or problems with payment. Also, in Florida there is a law that requires the insurance company to pay attorney fees and costs if an insured or assignee of an insured prevails. On the other hand, if they were successful in collecting money from their own client, they’re going to have to pay their own attorney fees and costs. So for all those reasons, the assignment is a critical part of the process of facilitating care and facilitating payment for the care.
With the registries and agencies I’ve represented, we’ve been able to utilize the assignments where there was a short pay or some controversy over invoicing and we recovered in excess of 1 million dollars in receivables that our clients had written off as uncollected. It was because of the strength of the assignment that we were able to go in and force these companies to pay what was due and owing. Notably, because of the attorney fee provision in the Florida, the rate of recovery net of fees and costs was in excess of 90%.