Final answer:
A doctor who accepts an insurance company's fee as full payment for services is known as a Participating Provider. This works within fee-for-service and Health Maintenance Organization (HMO) systems and helps manage the costs of health care while addressing issues such as adverse selection.
Step-by-step explanation:
A doctor who agrees to accept an insurance company's fee as the maximum amount to be collected is called a Participating Provider. This term applies to health care providers who enter into an agreement with an insurance company to accept their specified fees for services as full payment. In compensation models such as fee-for-service and Health Maintenance Organization (HMO) plans, participating providers may take different roles. In a fee-for-service system, reimbursement is based on services provided, whereas in an HMO, compensation is based on a fixed amount per enrolled person.
Concerning insurance markets, adverse selection poses a risk of disproportionally attracting high-risk individuals, which can lead to imbalances that could affect providers and insured parties alike.
By becoming a participating provider, physicians can offer their services to more patients due to the arrangement with insurers, while also contributing to managing the costs of health care which could otherwise be affected by adverse selection.