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third-party reimbursement

A general term applied to health care benefit payments. It derives from the fact that under normal market transactions, there are only two parties, the consumer and the supplier, but under a benefit plan, a third party (e.g., government, an insurance company, an employer, etc.) is ultimately responsible to pay the costs of services provided to covered persons.

Definition extracted with permission from American Academy of Family Physicians: Family Physicians and Managed Care

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