Final answer:
A Health Maintenance Organization (HMO) is the entity that provides health care services to enrolled members for a fixed prepayment and uses an exclusive provider panel.
Step-by-step explanation:
An entity which, in return for a prepayment, undertakes to provide or arrange for, or provide access to, the provision of a limited health service to enrollees through an exclusive panel of providers is known as a Health Maintenance Organization (HMO). An HMO receives a fixed payment per enrolled individual, regardless of how many services the individual uses. This model contrasts with the fee-for-service system, where providers are reimbursed based on the individual services they provide to patients. HMOs are designed to focus on prevention and efficient healthcare delivery, which can help reduce moral hazards and adverse selection in the health insurance market by aligning the incentives of providers with the overall cost containment and health outcomes.