Which refers to the contractual right of a third-party payer to recover health care expenses from a liable party?

Subrogation is the process that allows a third-party payer, such as an insurance company, to recover the costs of health care expenses they have paid from another party that is deemed liable for those expenses. This usually occurs in situations where an injury or illness is associated with an event involving another entity that is responsible for covering those costs.

For example, if a person is injured in a car accident due to another driver's negligence, the injured party's health insurance may initially cover their medical bills. However, the insurance company can then seek reimbursement from the at-fault driver or their insurance through subrogation. This prevents the injured party from being compensated twice and ensures that the party responsible for the bill ultimately pays.

Understanding subrogation is crucial for health care providers and billing professionals because it impacts how claims are processed and how funds are recovered, ensuring appropriate liability and account management. This knowledge is vital for proper billing practices and maximization of reimbursement.