I’m going to discuss the concept of assignment of benefit and how important it is in the long-term care 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 that the individual can start getting their care right away and they 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 as well, 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 they have the same rights and benefits under the policy as the insured person. What that does is protect their account receivables in a way that they are not otherwise protected if they don’t have the assignment. In other words, without the assignment, the only recourse an agency or registry has would be against their own client, against the insured person and for reasons I stated before you don’t want to sue your own client. You never want to sue your customers number one and number two, you’re going after elderly people to pay you money, it just doesn’t feel good; and number three oftentimes they don’t have money. We have to wait for them to die and pursue an estate and it doesn’t work well.
The assignment gives the agency the capacity to protect their receivables and go after the insurance company directly if there are short pays or problems with payment. And they also benefits from the fee shifting statute. The statute in Florida that says if they have to sue for policy benefits, the insurance company has to pay their fees if they prevail. On the other hand, if they were successful in collecting money from their own customer or patient, they’re going to have to pay their own attorney fees to go after their customer or client. 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 assignment, the registries and agencies I’ve represented, we’ve been able to take assignments in many cases where there was a short pay or some controversy over invoices and we were able to collect hundreds of thousands, really in excess of millions of dollars in receivables that the agencies and registries had written off as uncollectable. 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. And the collection rate was very high. Collection rate was high and the fee exposure to the registry and agencies has been very low so it’s been a very positive outcome.