This study examines the perceptions of unit directors' regarding the effects of managed care on outpatient treatment and operations. Specifically, we propose that perceptions vary as a function of managed care penetration, managed care complexity, and the stringency of managed care oversight procedures. Data are from a nationally representative sample survey of 236 outpatient substance abuse treatment organizations conducted in 1995. Study findings support the thesis that directors' perceptions vary systematically with specific attributes of managed care. Specifically, directors' perceptions of positive managed care effects are associated with two managed care oversight procedures: (a) managed care limits on the number of sessions provided; and (b) managed care requirements for follow-up after treatment. Directors perceptions of negative effects of managed care are significantly related to (a) managed care penetration, (b) managed care complexity; and (c) four different managed care oversight procedures. These results have implications for treatment given the rapid growth in managed behavioral care.