Final answer:
Managed care plans such as HMOs and PPOs generally utilize a pre-payment system, where providers are paid a fixed amount per enrolled patient, independent of the services rendered.
Step-by-step explanation:
Managed care plans like Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) typically use a pre-payment system. Unlike the fee-for-service system where medical care providers are reimbursed according to the services they provide, HMOs and PPOs operate on a fixed payment structure. They receive a set amount per person enrolled in the plan, regardless of how many services the patient uses. This approach is designed to mitigate issues like moral hazard and adverse selection, by aligning the incentives of patients and providers towards cost-effective care.