1. Provision in an insurance contract in which the liability of one party is assumed by a second party, usually the insurance company. 2. Legal section often used in managed care contracts that states if either the managed care plan or participating provider is held liable for corporate malfeasance or malpractice, the provider agrees not to sue or make any claims against a plan member. 3. Legal paragraph in a managed care contract that prohibits a provider from billing members (patients) if the managed care plan becomes insolvent or fails to meet its financial obligations. This is required by some state regulations. Also called no balance billing clause . 4. In cancer hospitals, the financial protection that ensures the hospitals recover all losses because of differences in their ambulatory payment classification (APC) payments and the pre-APC payments for Medicare outpatient services.
***
Clause written into a contract by which one party agrees `to release another party from all legal liability, such as a retailer who agrees to release the manufacturer from legal liability if the product injures someone.