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Abstract: Jails across the country are struggling to meet the increasing demand for mental health care and to contain the resulting escalating costs. Most larger jails provide some level of mental health care such as suicide screening and psychopharmacological treatment, but services such as psychotherapy, counseling, and behavioral treatment are less frequently available. This article outlines a systems approach employed at one large jail that used managed care methods to contain costs while delivering a high quality of mental health care. Managed care strategies utilized include medication formularies, medical necessity and level-of-care guidelines, preauthorization, provider profiling, treatment algo-rithms, and case management for challenging inmates. Outcomes on cost reductions and how the provider met challenges related to changing to a managed care model are discussed