This study examined whether case management services, mandated under the managed care contract for adult clients in a medium-sized state psychiatric hospital in Tennessee between July 1996 and June 1997, were offered as specified, and the impact these services had on recidivism for individuals who were identified as having a severe or persistent mental illness. Although all of the clients were offered case management, 47% refused the service. Of the 14 who had one or more readmissions, six (43%) had case management. These findings demonstrate that health care providers must offer sufficient information to their clients so that they can use the managed care system more effectively.