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Introduction As the number of Americans covered by managed care plans grows, it becomes more important to understand how managed care organizations (MCOs) control costs and how these controls affect access, quality, and health outcomes. This paper will examine patterns in referrals from primary care physicians (PCPs) to specialists in order to evaluate physicians’ satisfaction with this inter-physician communication and to identify problems in the referral process. Prior authorizations will also be studied in order to learn the criteria considered when deciding if a treatment or medication is medically necessary and appropriate. The reasons prior authorization systems are utilized and their effectiveness in controlling costs and constraining access will also be examined. Case management as a function of utilization management and methods for measuring quality and patient satisfaction will be discussed. Historical patterns of case management will be studied in order to evaluate the effecti veness of case management in managing costs. The implications of referral and prior authorizations systems for all stakeholders, MCOs, purchasers, providers, and consumers will be considered. Background/Understanding In MCOs, there are a variety of processes that are used to influence the practice style of a PCP. The method that causes one of the most controversial and frustrating aspects of managed care for the members and their PCP is the use of referral systems (Grumbach et al, 1998). A referral system is the process in which PCPs determine whether services that are performed outside of their office are medically necessary and appropriate. These referrals are used to send members to other physicians in order to gain the excess amount of care t... ...spects of care including, rehabilitation, home care, and health education. MCOs can also utilize disease management, which is a specialized form of case management to monitor and control certain individuals with specialized needs. Like case management, disease management is targeted at specific high risk and high cost medical cases but with a focus on diseases. Disease management is unique because it offers patients access to not only physicians but also other types of health care professionals including pharmacists and dieticians. The idea behind this is to provide each patient with all available resources to help control or eliminate their disease. Pharmacists can provide specialized knowledge on medication techniques and types while dietitians can provide information on healthy eating habits that can help ease symptoms of particular diseases (Kongstvedt, 2009).