Managed health care is becoming increasingly common as the demands of cost containment are placed on providers of care. This article defines managed health care, illustrates its continued growth, demonstrates its effect on clinical decision making and reimbursement issues, and suggests strategies for optimal positioning in the managed care marketplace. The hand therapy specialist, whether based in a hospital, an institution-based ambulatory care setting, or a private practice, must be aware of a managed plan's contractual limitations. Parameters discussed are patient length of stay, documentation, reimbursement, patient responsibility, alternatives to conventional treatment protocols, and the potential effects of utilization review on patient treatment. A heightened awareness of managed health care is critical for the manager and practitioner, especially because national health care reform is on the horizon. A provider must be well prepared to ensure delivery of quality care within the myriad restrictions imposed by managed care regulations.