In response to the effects of the managed care environment on patient flow and care, the department of psychiatry and behavioral sciences of the Johns Hopkins School of Medicine developed and has been managing a capitated behavioral health care program. The program is responsible for providing mental health and substance abuse services for 22,000 members of the TRICARE Uniformed Services Family Health Plan (USFHP), directed by the U.S. Department of Defense. The integration of primary care and behavioral health care is a major feature of the USFHP/TRICARE program. The authors describe the transition from a carve-out for-profit managed care organization to the integrated program managed by the department. During the first two years of the program, access to services increased and use of inpatient services decreased without the need to deny service use. To supplement previous reports of the involvement of academic psychiatry departments in behavioral health care, the authors supply utilization and financial data that may serve as benchmarks for similar efforts by other departments.