Some managed care organizations are composed of physicians; others are a combination of doctors, other providers and hospitals. Concrete examples are Independent Practice Associations (APIs), Preferred Provider Organizations (PPOs), and Hospital Physician Organizations (OPOs). Typically, physicians enter into contracts (directly or indirectly) with a managed care organization that require physicians to accept reduced fees for their services, and in exchange for their consent to provide services at lower prices, the managed care unit is responsible for “referring” patients to physicians. A physician or group of physicians` offices may enter into a contract with an API or PHO, which in turn will break down contracts with an OPP, health insurance company, or significant employee into a relationship that allows an external “payer” (an insurer or employer or employer health plan that pays for health care) to pay the provider when a “claim” is filed for care. of a patient…