Developing a continuum of care is considered to be one of the first steps in the process of implementing managed care strategies. This study summarizes the results of a final survey that focused on the ability of Colorado community mental health centers (CMHCs) to build service capacity and create new programs as a result of Medicaid capitation financing. Capitated agencies, compared to those that remained fee-for- service during the study period, reported a much greater ability to develop services as a result of capitation. Decreases in services were minimal for all agencies. Some differences in managed care organizational models were noted, as were differences in the speed of implementation. Gaps in some services still remain. These findings point to important program implementation issues for publicly funded managed care.