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Mass Department of Mental Health The advent of managed-care health care services has been among the most notable changes in the U.S. health care delivery of the past two decades. This case describes the policy andmanagement tensions which arise when the managed care approach is applied to patients cared for through the Massachusetts Department of Mental Health and formerly housed in traditional hospital settingsùand who were accounting for a disproportionate share of the state''s overall mental health expenditures. The case focuses on the proposed extension of managed care to a severely mentally ill population. It approaches the potential tensions between fiscal and clinical goals through the vehicle of a proposed agreement which a new Massachusetts Commissioner of Mental Health must decide whether to sign with the state''s Division of Medical Assistance, the financial unit which would use public Medicaid funds as the basis of the proposed managed care system. The case allows for discussion of the pluses and minuses of the agreement and, by extension, the tradeoffs-both for the severely mentally ill and for others affected by the state''s mental health system-implied by managed care.