Assignment of benefits: when a rider's insurer pays the transportation company directly

How an assignment works

Three parties are involved. The rider, or a person allowed to consent for the rider, is the assignor. Your company is the assignee. The insurer that owes the benefit is the one that changes who it pays. Once the insurer holds a valid assignment, it sends the money to you instead of the rider. Ride companies run into this mostly after car crashes, when a rider’s auto policy may owe for trips to treatment, and the guide to billing auto insurance for rides covers which states pay for those trips at all.

Timing matters because insurers are allowed to pay the person they believe is owed. Michigan’s no-fault law says a good-faith payment to the injured person discharges the insurer to that extent, unless the insurer was told in writing that someone else has a claim (MCL 500.3112). An assignment the insurer has never seen does not stop that payment, so send a copy to the adjuster with your first bill.

An assignment is also different from a simple authorization to pay. New York’s no-fault regulation separates the two: signing an authorization to pay benefits does not transfer all of the injured person’s rights to the provider, while a properly executed assignment on the state’s form does (11 NYCRR 65-3.11).

Where a ride company can and cannot use one

State auto law decides whether your rides can be assigned at all, and the answer is often narrower than owners expect.

• New York. An insurer may pay a provider under an assignment only when that provider delivers health care services covered by Insurance Law 5102(a)(1). The regulation’s notice to policyholders files trips to medical appointments under other reasonable and necessary expenses instead, so the benefit for rides goes to the rider.
• Michigan. An agreement to hand over benefits that will come due later is void (MCL 500.3143), so take a fresh assignment for each batch of completed rides. Since June 11, 2019, Michigan has let a health care provider listed in section 3157 sue the insurer directly for overdue benefits. If you are not sure your company counts as one, an assignment for completed rides is the safer route.
• Virginia. The statute lists the medical expenses its auto benefit pays, including services from an emergency medical services vehicle. It does not name wheelchair van rides, so confirm with the adjuster that rides are covered before you rely on an assignment there.

A lawyer’s promise to pay your bill from a settlement is a separate arrangement, a letter of protection, and it is not an assignment.

Why Medicaid trips need none

Medicaid already pays the provider. 42 CFR 447.10 lets a state pay only the provider, an eligible beneficiary in limited cases, a government agency the provider reassigns to, whoever a court order names, or a billing agent paid for its processing costs rather than a share of what it bills or collects. A few more exceptions cover individual practitioners paid through an employer or facility. That rule is why Medicaid receivables cannot simply be sold, as the factoring guide explains, and why a Medicaid rider never needs to sign one for you.

What the signed form should say

Virginia’s statute spells out, item by item, what makes an assignment of auto medical expense benefits valid, and the list makes a sound checklist even where no statute requires it. A Virginia AOB is valid only if:

1. It is in writing (paper or electronic), dated, and signed by the rider or a person authorized to consent for them.
2. It states plainly that the rider is not required to sign it.
3. It carries the notice the statute writes out word for word, in the form or in a separate page the rider initials, in type no smaller than 8 points.
4. A copy goes to the auto insurer.

An assignment that misses any of these is void in Virginia, and the rider can never be required to assign benefits.

Add the details any adjuster needs to match the form to a bill: the insurer, the claim number, the accident date, and the dates of the rides the assignment covers. Keep the signed original with the trip records for those rides. Whether the rider owes a balance the insurer refuses is a separate agreement, and the private pay guide covers how to set private rates and collect them.

Keeping the balance straight

When a payer covers only part of a bill, the rest still has to be tracked. In HealthRide, a partial payment recorded against an invoice, including a check entered by hand, lowers that invoice’s balance, and one ledger ties every payment to its invoice and trip, so the amount still owed is easy to see.