Exhibit 99.1

MAGELLAN HEALTH SERVICES REPORTS

THIRD QUARTER 2011 FINANCIAL RESULTS

- Increases 2011 Net Income and EPS Guidance -

- Board of Directors Authorizes $200 Million Share Repurchase Program -

AVON, Conn. — October 27, 2011 — Magellan Health Services Inc. (NASDAQ: MGLN) today reported financial results for the third quarter of 2011, as summarized below. For the quarter ended September 30, 2011, the company reported net revenue of $686.8 million, segment profit of $55.5 million, and net income of $31.4 million or $1.03 per diluted common share.  Segment profit represents income from operations before stock compensation expense, depreciation and amortization, interest expense, interest income, gain on sale of assets, special charges or benefits, and income taxes.

Financial Results

As of September 30, 2011, the company had unrestricted cash and investments of $242.4 million. In addition, under its current $450 million authorization, Magellan reported share repurchases through October 24, 2011 of approximately 8.9 million shares for a total cost of $435 million.

“Magellan posted solid overall results in the third quarter,” said René Lerer, M.D., chairman and chief executive officer.  “We achieved these results despite selective rate and margin pressures, particularly in our behavioral health units.  We also experienced strong cost of care results in our radiology segment, as well as good performance in our pharmacy businesses.  Throughout the quarter, we continued to focus on growth, and our success was evident in several new awards related to both Medicaid and non-Medicaid business across our product lines. These included public sector behavioral health wins in Louisiana and New York.

“Our strategy is centered on innovating and expanding in our current business areas, with particular focus in pharmacy and Medicaid.  The creation of our new pharmacy business unit, Magellan Pharmacy Solutions, better aligns our current pharmacy businesses and positions us well as we prepare to launch our new drug benefit management product, Total Drug SolutionsSM, and expand our already significant presence in the dynamic pharmaceutical landscape.”

Magellan Health Services—55 Nod Road, Avon CT 06001—www.MagellanHealth.com

“I’m particularly pleased with our new sales during the quarter,” said Karen S. Rohan, Magellan’s president.  “The degree of success we’ve achieved demonstrates that customers recognize Magellan can provide solutions to drive better quality at lower costs.  We also appreciate the confidence the state of Louisiana has shown by choosing Magellan to help create a new approach to the management and delivery of behavioral health care services.  With an increased level of opportunity in state sponsored programs across all of our businesses, we have invested in additional resources dedicated solely to business development in that sector.  Looking ahead, our goal is to maintain a strong level of execution, deliver on our care management initiatives, implement new business and create new growth.”

“With our results for the quarter and year-to-date, Magellan is on track to meet our segment profit guidance for the year,” said Jonathan N. Rubin, chief financial officer.  “Our financial position remains solid which, combined with our strong cash flow, ensures sufficient liquidity to pursue additional avenues for growth.  We’ve nearly completed our existing $450 million share repurchase program, which enhances shareholder value and has contributed to the increase in EPS guidance.  Our Board of Directors has authorized a new share repurchase program of up to $200 million over a two year period.

Outlook

“We are reaffirming our 2011 guidance ranges for segment profit of $255 million to $275 million, and cash flow from operations of $180.5 million to $211.5 million, excluding the net shift of restricted funds between cash and investments.  We are also updating guidance for full-year net income to $116.5 million to $135.5 million and diluted earnings per share to a range of $3.73 to $4.34 per share based on share repurchases through the close of business on October 24, 2011, but excluding any potential repurchases that may occur during the remainder of the year.

“Looking ahead, after reducing the current 2011 guidance range for approximately $20 million of favorable year-to-date out-of-period adjustments, we expect to see moderately higher segment profit in 2012.  This expectation is driven by several factors including the impact of new business and our care management initiatives, which will be partially offset by contract terminations, and continued margin pressure resulting from economic strains on health plan and state clients.  We will provide detailed guidance during our December call.”

Earnings Results Conference Call

Management will host a conference call at 10:00 a.m. Eastern Time on Thursday, October 27, 2011.  To participate in the conference call, interested parties should call 1-888-566-8408 and reference the pass code Third Quarter Earnings Call 2011 approximately 15 minutes before the start of the call.  The conference call will also be available via a live Webcast at Magellan’s investor relations page at www.MagellanHealth.com.

About Magellan Health Services:  Headquartered in Avon, Conn., Magellan Health Services Inc. is a leading specialty health care management organization with expertise in managing behavioral health, radiology and specialty pharmaceuticals, as well as public sector pharmacy benefits programs. Magellan delivers innovative solutions to improve quality outcomes and optimize the cost of care for those we serve.  Magellan’s customers include health plans, employers and government agencies, serving approximately 31.2 million members in our behavioral health business, 16.3 million members in our radiology benefits management segment, and 5.5 million members in our medical pharmacy management product.  In addition, the specialty pharmaceutical segment serves 41 health plans and several pharmaceutical manufacturers and state Medicaid programs.  The company’s

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Medicaid Administration segment serves 25 states and the District of Columbia.  For more information, visit www.MagellanHealth.com.

Cautionary Statement

This release contains forward-looking statements within the meaning of the Securities Exchange Act of 1934 and the Securities Act of 1933, as amended, which involve a number of risks and uncertainties.  All statements, other than statements of historical information provided herein, may be deemed to be forward-looking statements including, without limitation, statements regarding estimates of 2011 net income, segment profit, earnings per share, cash flow from operations, 2012 segment profit, and strategy. These statements are based on management’s analysis, judgment, belief and expectation only as of the date hereof, and are subject to uncertainty and changes in circumstances. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “may,” “should,” “could,” “estimate,” “intend” and other similar expressions are intended to identify forward-looking statements. Actual results could differ materially due to, among other things, the possible election of certain of the company’s customers to manage the health care services of their members directly; changes in rates paid to and/or by the company by customers and/or providers; higher utilization of health care services by the company’s risk members; delays, higher costs or inability to implement new business or other company initiatives; the impact of changes in the contracting model for Medicaid contracts; termination or non-renewal of customer contracts; the impact of new or amended laws or regulations; governmental inquiries; litigation; competition; operational issues; health care reform; and general business conditions. Additional factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, the risks discussed in the “Risk Factors” section included within the company’s Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission on February 25, 2011, and the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, expected to be filed with the Securities and Exchange Commission and posted on the company’s website later today.  Readers are cautioned not to place undue reliance on these forward-looking statements. The company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of this release. Segment profit information referred to herein may be considered a non-GAAP financial measure.  Further information regarding this measure, including the reasons management considers this information useful to investors, are included in the company’s most recent Annual Report on Form 10-K and on subsequent Form 10-Qs.

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MAGELLAN HEALTH SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

(1)  For a more detailed discussion of Magellan’s results for the quarter ended September 30, 2011, refer to the Company’s Quarterly Report on Form 10-Q, which will be filed with the SEC on October 27, 2011, and the live broadcast or taped replay of the Company’s earnings conference call on October 27, 2011, which will be available at www.MagellanHealth.com.

(2)  Includes stock compensation expense of $3,596 and $4,425 for the three months ended September 30, 2010 and 2011, respectively, and $11,830 and $13,408 for the nine months ended September 30, 2010 and 2011, respectively.

MAGELLAN HEALTH SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

(1)  The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 will be filed with the SEC on October 27, 2011.

(2)  Includes the net shift of restricted funds between cash and investments that results in an operating cash flow change that is directly offset by an investing cash flow change.  During the nine months ended September 30, 2010, restricted cash of $29,086 was shifted to restricted investments that resulted in an operating cash flow source.  During the nine months ended September 30, 2011, restricted investments of $45,749 were shifted to restricted cash that resulted in an operating cash flow use.

MAGELLAN HEALTH SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED OPERATING RESULTS BY BUSINESS SEGMENT

(Unaudited)

(In thousands)

(1)  The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 will be filed with the SEC on October 27, 2011.

(2)  Effective September 1, 2010, Public Sector has subcontracted with Medicaid Administration to provide pharmacy benefits management services on a limited risk basis for one of Public Sector’s customers.  As such, revenue and cost of care related to this intersegment arrangement are eliminated.

(3)  Stock compensation expense is included in direct service costs and other operating expenses; however, this amount is excluded from the computation of segment profit since it is managed on a consolidated basis.