The third-party payment (TPP) mechanism is a model where insured patients are not required to pay the cost of health services covered by the insurance at the time the services are rendered. While the TTP (also called "cashless") mechanism is not new in health insurance, setting up and managing a TPP mechanism for a health microinsurance scheme presents unique challenges. Briefing Note #11 draws on the experience of various health microinsurance schemes and presents the pros and cons of using a TPP mechanism. It also presents key issues to address when establishing and managing a TPP mechanism, as well as tips and solutions collected from cases studies and experts' interviews.