1. Prepayment health care program in which a specified set of health benefits is provided in exchange for a yearly fee or fixed periodic payments to the provider by the plan. This category of third-party payers includes health maintenance organizations (HMOs), preferred provider organizations (PPOs), and independent or individual practice associations (IPAs). 2. Under the Medicare program, type of prepaid medical plan that must cover all Medicare Part A and Part B health care. Some managed care plans cover extra benefits such as extra days in the hospital. In most cases, a type of Medicare Advantage Plan that is available in some areas of the country. Cost to the patient may be lower than in the Original Medicare Plan.