Behavioral or psychiatric symptoms in Alzheimer's disease are strongly related to the use of health care services and result in a significant emotional and financial burden for families. This paper is an overview of major trends in the organization and funding of mental health services for people with Alzheimer's disease, emphasizing specific public policy and reimbursement initiatives that have affected acute and long-term care. Recent trends reflecting increased federal scrutiny of Medicare-reimbursed services and the current and future challenges in providing mental health services to people with Alzheimer's disease within managed care and capitated health plans are also addressed.