However, third-party payer systems became more popular with the increased bureaucratization of healthcare, particularly with the spread of HMOs and their complex paperwork for referrals. The use of third-party payers means "the processing of payments for insurance and other duties are handled" by another agency that is responsible for collecting premium payments and issuing reimbursements (Easey 2009).

It has been alleged that the use of such third parties means that individuals not well-versed in medical needs are making decisions about when reimbursements are valid regarding treatment and care, and are often looking for reasons not to pay for care, rather than to provide customers with the medical services they require as patients. It also creates another level of red tape between the patient and his or her doctor and insurance provider. An example of such an abuse might be an individual denied coverage because of forgetting to disclose a relatively...
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