This monograph examines issues in the field of psychosocial/psychiatric rehabilitation (PSR) services for people with serious mental illness, placed in the context of a debate within the field about trends toward managed behavioral health care companies. Four main issues are addressed: (1) the degree to which managed behavioral health care companies will assume responsibility for the delivery of rehabilitation services for persons with serious psychiatric disabilities (evidence suggests relatively little involvement); (2) what effects, if any, involvement in PSR by managed behavioral health care companies will have on the nature of PSR services; (3) the security of future funding for PSR services; and (4) whether the basic values and concern for accountability that underlie managed behavioral health care and PSR are sufficiently congruent to permit effective collaboration. The paper concludes that rehabilitation services for persons with serious mental illness are at risk of a diminished financial base, programmatic changes born of cost control imperatives incompatible with the fundamental values of PSR, and the possibility of these services becoming the neglected stepchild of the mental health delivery system. Decision making concerning these issues is seen to lie not at the federal but at the state and local levels. Communication and cooperation among localities are urged. (Contains 14 references.) (DB)