The organization, financing, and delivery of publicly funded behavioral health services are undergoing massive changes nationwide. Managed care principles and practices are being implemented widely and are being relied on increasingly to meet the challenges of containing costs and improving service effectiveness. To meet these goals, comprehensive systems are under development for measuring and reporting outcomes experienced by individuals who received services and for assessing the impact of managed care strategies on the service delivery system. This article presents an example from the Prepaid Mental Health Program in New York State. It highlights the development, implementation, and early experiences with the plan's performance management system for public sector managed behavioral health, a basis for continuous quality improvement activities and information reporting products such as report cards. Policy, administrative, and financial implications are illuminated.