QuickLinks -- Click here to rapidly navigate through this document

Exhibit 12

MAGELLAN HEALTH SERVICES, INC AND CONSOLIDATED SUBSIDIARIES
COMBINED WITH UNCONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERENCE DIVIDENDS
(Dollars in thousands)

			For the Fiscal Year Ended
			September 30,
																		Nine months ended 6/30/2002
			1997			1998			1999			2000			2001
EARNINGS:
Income (loss) from continuing operations before income taxes, minority interest, and extraordinary items			$	(56,163	)	$	(8,931	)	$	37,457		$	17,698		$	69,740		$	29,537
	Less: Equity in (earnings) / loss from unconsolidated subsidiary			5,567			(12,795	)		(20,442	)		(9,792	)		(36,566	)		(7,664	)
		Income (loss) from continuing operations before income taxes, minority interest, extraordinary items and equity in (earnings) / loss of unconsolidated subsidiary		(50,596	)		(21,726	)		17,015			7,906			33,174			21,873
Add:
Interest expense				55,482			87,290			104,156			106,711			103,783			72,778
Portion of rents representative of interest factor				2,586			7,859			10,765			11,349			11,102			8,201
Cash Distributions from uncons subs				—			11,441			21,970			14,324			38,353			8,420
				58,068			106,590			136,891			132,384			153,238			89,399
Total earnings			$	7,472		$	84,864		$	153,906		$	140,290		$	186,412		$	111,272
FIXED CHARGES AND PREFERENCE DIVIDENDS:
Interest expense			$	55,482		$	87,290		$	104,156		$	106,711		$	103,783		$	72,778
Portion of rents representative of interest factor				2,586			7,859			10,765			11,349			11,102			8,201
Capitalized interest				—			513			673			—			—			—
Less:
Fixed charges of certain unconsolidated subsidiaries										—			—			—			—
Fixed charges before preference dividends				58,068			95,662			115,594			118,060			114,885			80,979
Preferred dividend requirement				—			—			—			3,802			5,049			3,842
Effective tax rate (1)				N/A			N/A			N/A			50.8	%		52.2	%		41.7	%
Preferred dividend factor on pre-tax basis				—			—			—			7,731			10,558			6,585
Combined fixed charges and preference dividends			$	58,068		$	95,662		$	115,594		$	125,790		$	125,443		$	87,565
Ratio (dollar amount of deficiency)			$	(50,596	)	$	(10,798	)		1.33			1.12			1.49			1.27

(1)

Represents income from continuing operations before provision for income taxes divided by income from continuing operations, which adjusts dividends on preferred stock to a pre-tax basis.

MAGELLAN HEALTH SERVICES, INC.
FIXED CHARGES
(in thousands)

		FY 97		FY 98		FY 99		FY 00		FY 01		Nine months ended 6/30/2002
I. INTEREST EXPENSE
Net interest per 10-K/Pro Formas		46,438		76,505		93,752		97,286		93,662		69,380
Less interest income		(9,044	)	(10,785	)	(10,404	)	(9,425	)	(10,121	)	(3,399	)
	Total interest expense	55,482		87,290		104,156		106,711		103,783		72,779
	Non- Cash Int exp	1,710		2,935		3,843		4,376		5,078		4,010
	Net CASH INT EXPENSE	53,772		84,355		100,313		102,335		98,705		68,769
II. RENTS REPRESENTATIVE OF INTEREST FACTOR
Rent expense — continuing ops		7,759		23,577		32,296		34,046		33,306		24,604
Factor (1/3 of rent expense)		2,586		7,859		10,765		11,349		11,102		8,201
Rent expense — uncons.:
	NONE
Total rent expense		—		—		—		—		—		—
Factor (1/3 of rent expense)		—		—		—		—		—		—
Effective Tax Rate Continuing Oper
Pre-tax income cont ops								17,698		69,740		29,537
Provision for income taxes cont ops								8,994		36,388		12,305
Effective tax rate (ETR)								50.8	%	52.2	%	41.7	%
Preferred dividend rate (1-ETR)								49.2	%	47.8	%	58.3	%
preferred div								3,802		5,049		3,842
Dividend Requirement								7,731		10,558		6,585

QuickLinks

Exhibit 12 Comptation of Ratio of Earnings