This chapter defines a management services organization (MSO), and discusses the goals and objectives of hospitals and physicians in creating an MSO and the advantages and disadvantages of an MSO. It stresses the necessity of developing a business plan in the formation of an MSO and discusses organizational forms and MSO activities, such as managed care contracting, billing, information systems, utilization management and review, the provision of supplies, medical office space, equipment, staff, and turnkey arrangements. In addition, it discusses the structuring of MSO fees and a number of organizational structures for MSOs and legal issues affecting them.