The Center for Health Care Strategies was commissioned by the United Hospital Fund to identify best practices for organizing, financing, and delivering behavioral health services for managed care beneficiaries in New York State with serious and persistent mental illness (SPMI). The resulting report examines the need to provide more integrated physical and behavioral health care for Medicaid beneficiaries and explores best practices around the country for integrating physical and behavioral health services and reducing avoidable high-cost services. It outlines the ideal elements for integrated care, including such items as an electronic system that shares data with physical and behavioral health providers, standardized protocols and evidence-based guidelines, and mechanisms for rewarding high-quality care and for sharing savings across physical and behavioral care delivery systems.