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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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MIC-Info: RSA-MD5,RSA,
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<SEC-DOCUMENT>0001181431-06-031452.txt : 20060518
<SEC-HEADER>0001181431-06-031452.hdr.sgml : 20060518
<ACCEPTANCE-DATETIME>20060518163453
ACCESSION NUMBER:		0001181431-06-031452
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20060516
FILED AS OF DATE:		20060518
DATE AS OF CHANGE:		20060518

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MAGELLAN HEALTH SERVICES INC
		CENTRAL INDEX KEY:			0000019411
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-HOSPITALS [8060]
		IRS NUMBER:				581076937
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		6950 COLUMBIA GATEWAY
		STREET 2:		STE 400
		CITY:			COLUMBIA
		STATE:			MD
		ZIP:			21046
		BUSINESS PHONE:		4109531000

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CHARTER MEDICAL CORP
		DATE OF NAME CHANGE:	19920703

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			SHULMAN STEVEN J
		CENTRAL INDEX KEY:			0001245353

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-06639
		FILM NUMBER:		06852503

	BUSINESS ADDRESS:	
		STREET 1:		6950 COLUMBIA GATEWAY DR
		STREET 2:		SUITE 400
		CITY:			COLUMBIA
		STATE:			MD
		ZIP:			21046
		BUSINESS PHONE:		4109531000

	MAIL ADDRESS:	
		STREET 1:		1564 NE EXPRESSWAY
		STREET 2:		ATTN: BJ PURCELL
		CITY:			ATLANTA
		STATE:			GA
		ZIP:			30329
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>rrd118419.xml
<DESCRIPTION>2006 OPTION AND STOCK GRANT
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2006-05-16</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000019411</issuerCik>
        <issuerName>MAGELLAN HEALTH SERVICES INC</issuerName>
        <issuerTradingSymbol>MGLN</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001245353</rptOwnerCik>
            <rptOwnerName>SHULMAN STEVEN J</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>55 NOD ROAD</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>AVON</rptOwnerCity>
            <rptOwnerState>CT</rptOwnerState>
            <rptOwnerZipCode>06001</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Chairman and CEO</officerTitle>
        </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Option (right to buy)</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>38.52</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2006-05-16</value>
                <footnoteId id="F1"/>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>276106</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0</value>
                    <footnoteId id="F3"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F2"/>
            </exerciseDate>
            <expirationDate>
                <value>2016-02-24</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>276106</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>276106</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
                <value>Restricted Stock Units</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <footnoteId id="F4"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2006-05-16</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>35144</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0</value>
                    <footnoteId id="F3"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F5"/>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F3"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>35144</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>35144</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">The option grant was approved by the Board of Directors of the Issuer on February 24, 2006, subject to shareholder approval of the 2006 Management Incentive Plan under which the options were granted. The shareholders of the Issuer approved the Plan on May 16, 2006. As per the Plan, the exercise price of the options was the fair market value on the date of grant determined by using the average of the opening and closing price of the Issuer's Ordinary Common Stock on NASDAQ on February 24, 2006.</footnote>
        <footnote id="F2">Options vest and become exercisable in one-third increments on February 24, of each of 2007, 2008 and 2009, subject to satisfaction of certain performance requirements for certain of such options.</footnote>
        <footnote id="F3">Not applicable.</footnote>
        <footnote id="F4">The restricted stock unit award was approved by the Board of Directors of the Issuer on February 24, 2006, subject to shareholder approval of the 2006 Management Incentive Plan under which the restricted stock units were granted.  The shareholders of the Issuer approved the Plan on May 16, 2006. Each restricted stock unit represents a contingent right to receive one share of Magellan common stock.</footnote>
        <footnote id="F5">Restricted Stock Units shall vest in one-third increments on February 24, of each of 2007, 2008 and 2009, subject to satisfaction of certain performance requirements.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Steven J. Shulman</signatureName>
        <signatureDate>2006-05-17</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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