What does the term 'assignment' mean in health insurance?

In health insurance, the term 'assignment' commonly refers to the process whereby a policyholder options to transfer their rights to receive benefits directly to a medical provider. This means that instead of the insurance company paying the policyholder, it pays the healthcare provider directly for the services rendered. This is often beneficial for both the patient and the provider. The patient does not need to come out of pocket for the full cost upfront, and the provider can be assured of payment for their services from the insurance company.

This practice is prevalent in many health insurance scenarios, especially with procedures that require upfront payment or where patients may find it challenging to handle the payment logistics themselves. By assigning benefits directly to providers, it simplifies the billing process and often leads to better cash flow for healthcare entities.