<PAGE>

        As filed with the Securities and Exchange Commission on July 25, 1996

                                                      Registration No. 333-

                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, DC  20549
                                       FORM S-8

               REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                   MHM SERVICES, INC.
                   ----------------------------------------
                (Exact name of registrant as specified in its charter)

         Delaware                                                 52-1223048
- -------------------------------                             -------------------
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)

                  7601 Lewinsville Road, Suite 200, McLean, VA 22102
            ------------------------------------------------------
                 (Address of Principal Executive Offices)  (Zip Code)

                Mental Health Management, Inc. 1993 Stock Option Plan
Mental Health Management, Inc. 1993 Stock Option Plan for Non-Employee Directors
    Mental Health Management, Inc. Non-Employee Directors' Stock Option Plan
    ------------------------------------------------------------------------
                              (Full title of the plans)

                            Michael S. Pinkert, President
                                  MHM Services, Inc.
                  7601 Lewinsville Road, Suite 200, McLean, VA 22102
                                     (703) 749-4600
                    --------------------------------------
                        (Name, address, and telephone number,
                      including area code, of agent for service)

                                       copy to:

   Michael P. Gallagher, Esq.                        Steven J. Feder, Esq.
Ballard Spahr Andrews & Ingersoll             Ballard Spahr Andrews & Ingersoll
  1735 Market St., 51st Floor                    1735 Market St., 51st Floor
    Philadelphia, PA 19103                          Philadelphia, PA 19103

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
                              Calculation of Registration Fee
- ----------------------------------------------------------------------------------------------------
                                      Proposed maximum       Proposed Maximum          Amount of
 Title of securities    Amount to be   offering price            aggregate         Registration fee
 to be registered      registered (1)   per share (2)       offering price (2)
- ----------------------------------------------------------------------------------------------------
<S>                    <C>            <C>                   <C>                    <C>
 Common Stock,         750,000 shares       $ (2)              $1,549,321.88             $534.25
 par value $.01
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>

(1)  Pursuant to Rule 416(a) under the Securities Act of 1933, as amended, this
     Registration Statement shall be deemed to cover an indeterminate number of
     additional shares of Common Stock issuable in the event the number of
     outstanding shares of MHM Services, Inc. is increased by split-up,
     reclassification, stock dividend or the like.

(2)  In accordance with Securities and Exchange Commission Rule 457(h)(1), 
     the price shown is based upon (i) 292,100 shares offered pursuant to 
     options outstanding exercisable at the following prices: 159,600 shares 
     at $3.75 per share, 51,000 shares at $3.00 per share, 50,000 shares at 
     $4.25 per share, 12,500 at $1.25 per share, 10,000 shares at $2.5625 
     per share and 9,000 shares at $1.625 per share; and (ii) 457,900 shares 
     reserved for issuance upon exercise of options to be granted in the 
     future, the proposed offering price of which has been determined based 
     upon the average of the high and low price per share of Common Stock on 
     July 19, 1996, as reported by the American Stock Exchange.

<PAGE>


                                        PART I


INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

         The documents containing the information required to be included in
Part I of this Registration Statement will be provided to all persons who are
selected to participate in the Mental Health Management, Inc. 1993 Stock Option
Plan, the Mental Health Management, Inc. 1993 Stock Option Plan for Non-Employee
Directors, or the Mental Health Management, Inc. Non-Employee Directors' Stock
Option Plan.


RESALE PROSPECTUS

         The following Prospectus is to be used by directors, officers, and key
employees of MHM Services, Inc. who are "affiliates" (as defined in Rule 405
promulgated under the Securities Act of 1933, as amended), in connection with
the sale of Common Stock acquired upon the exercise of stock options granted
pursuant to the Mental Health Management, Inc. 1993 Stock Option Plan, the
Mental Health Management, Inc. 1993 Stock Option Plan for Non-Employee
Directors, or the Mental Health Management, Inc. Non-Employee Directors' Stock
Option Plan.


<PAGE>


PROSPECTUS


                                  MHM SERVICES, INC.

                            750,000 SHARES OF COMMON STOCK

         This Prospectus is to be used in connection with the sale by certain
directors, officers, and key employees of MHM Services, Inc. (the "Selling
Stockholders") of an aggregate of up to 750,000 shares of the common stock, par
value $.01 per share (the "Common Stock"), of MHM Services, Inc. (the "Company")
which have been acquired by such Selling Stockholders upon the exercise of stock
options granted by the Company pursuant to the Mental Health Management, Inc.
1993 Stock Option Plan, the Mental Health Management, Inc. 1993 Stock Option
Plan for Non-Employee Directors, or the Mental Health Management, Inc. Non-
Employee Directors' Stock Option Plan (collectively, the "Plans").  See "Selling
Stockholders."  The shares of Common Stock offered hereby may be sold from time
to time in ordinary brokerage transactions at prevailing market prices by the
Selling Stockholders.  See "Plan of Distribution."  The price at which any
Selling Stockholder may sell shares and the brokerage commissions, if any, paid
in connection with a sale are unknown and may vary from transaction to
transaction.

         The Company will pay no underwriting discounts or commissions and will
receive none of the proceeds from the sale of the Common Stock by the Selling
Stockholders.  The expenses of the registration under the Securities Act of
1933, as amended (the "Securities Act"), of the shares of Common Stock offered
hereby will be borne by the Company.

         The Common Stock of the Company is traded on the American Stock
Exchange under the symbol "MHM."  On July 23, 1996, the closing price of the
Common Stock on the American Stock Exchange was $1.4375 per share.

                                ____________________


            PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE DISCUSSION
                           UNDER "RISK FACTORS" ON PAGE 3.

            THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
              SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
                    PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
                       PROSPECTUS.  ANY REPRESENTATION TO THE
                           CONTRARY IS A CRIMINAL OFFENSE.

                                ____________________


                    The date of this Prospectus is July 25, 1996.


<PAGE>

                                AVAILABLE INFORMATION

         The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission").  Reports, proxy
statements, and other information concerning the Company filed with the
Commission may be inspected and copied at the public reference facilities
maintained by the Commission at its office at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as at the Regional Offices of the Commission at
Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois
60661-2551 and 7 World Trade Center, 13th Floor, New York, NY 10048.  Copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.  The Common Stock is listed on the American Stock Exchange.  Such
reports, proxy and information statements and other information can also be
inspected and copied at the offices of the American Stock Exchange, 86 Trinity
Place, New York, NY 10006-1881.

         The Company has filed a registration statement on Form S-8 (herein,
together with all amendments and exhibits thereto, referred to as the
"Registration Statement") under the Securities Act with respect to the
securities offered pursuant to this Prospectus.  This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission.  For further information, reference is made to the Registration
Statement and the exhibits filed as a part thereof.  Statements contained herein
concerning any document filed as an exhibit are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement.  Each such statement is qualified in its
entirety by such reference.

                   INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         The Company (File No. 1-12238) hereby incorporates by reference into
this Registration Statement the following documents: (i) the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 1995; (ii) the
Company's Current Report on Form 8-K filed November 9, 1995; (iii) the Company's
first amendment to its Annual Report, filed on Form 10-K/A on January 29, 1996;
(iv) the Company's Quarterly Report on Form 10-Q for the quarter ended December
31, 1995; (v) the Company's Current Report on Form 8-K filed February 12, 1996;
(vi) the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1996; (vii) the Company's Current Report on Form 8-K filed April 17, 1996 (as
amended by the Company's Current Report on Form 8-K/A filed June 19, 1996);
(viii) the Company's Current Report on Form 8-K filed May 31, 1996; (ix) the
Company's Current Report on Form 8-K filed June 17, 1996 (as amended by the
Company's Current Report on Form 8-K/A filed June 25, 1996); and (x) the
description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-B, filed with the Commission by the Company on
January 27, 1995 (by which the Company succeeded to a Registration Statement on
Form 10, filed with the Commission on August 19, 1993).

         All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the dates of filing of such documents.

         The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, on the written request of
any such person, a copy of any or all of the information which has been or may
be incorporated by reference into this Prospectus, other than exhibits to such
documents.  Written requests for such copies should be directed to MHM Services,
Inc., 7601 Lewinsville Road, Suite 200, McLean, Virginia 22102, Attn: Investor
Relations, telephone (703) 749-4600.

                              [INSIDE FRONT COVER]


                                       2


<PAGE>


                           FORWARD-LOOKING STATEMENTS

    THIS PROSPECTUS INCLUDES FORWARD-LOOKING STATEMENTS BASED ON THE COMPANY'S
CURRENT PLANS AND EXPECTATIONS RELATING TO, AMONG OTHER MATTERS, THE ANTICIPATED
USE OF PROCEEDS FROM THE SALE OF CERTAIN ASSETS OF THE COMPANY, THE PROPOSED
BUSINESS ACTIVITIES OF THE COMPANY AND THE PROPOSED ACTIVITIES OF THE COMPANY
RELATING TO IMPROVING ITS LIQUIDITY.  SUCH STATEMENTS INVOLVE RISKS AND
UNCERTAINTIES WHICH MAY CAUSE ACTUAL FUTURE ACTIVITIES AND RESULTS OF OPERATIONS
TO BE MATERIALLY DIFFERENT FROM THAT SUGGESTED IN THIS PROSPECTUS, INCLUDING,
AMONG OTHERS, THE POSSIBLE NEED TO USE THE NET CASH PROCEEDS FROM THE SALE OF
CERTAIN COMPANY ASSETS FOR THE RETIREMENT OF CERTAIN INDEBTEDNESS.  FOR
ADDITIONAL INFORMATION, SEE "RISK FACTORS" AND "THE COMPANY."


                                  RISK FACTORS

    PRIOR LOSSES.  The Company incurred losses of $4,023,000 for the fiscal
year ended September 30, 1995, and there can be no assurance that the Company
will return to profitability, or that the losses will not be higher for fiscal
year 1996 and future periods.

    CHANGES IN MENTAL HEALTH INDUSTRY.  Recently, the health care industry, in
general, and the mental health industry, in particular, have been the subject of
substantial uncertainty as a result of anticipated and on-going governmental and
other third-party payor efforts to contain health care costs.  The Company's
management believes that a fundamental change has already occurred in the mental
health industry, reflecting a permanent departure from inpatient
hospitalization, upon which the Company's business has been substantially
dependent, as the primary service method in favor of more cost-effective
alternatives.  This change is reflected in decreases in patient days, occupancy
rates, lengths of stay, and reimbursement rates for inpatient care.  The
resulting impact has materially adversely affected the Company's operating
results as well as the Company's efforts to expand its present operations.
While the Company is taking steps to contain present and future operating costs,
there can be no assurance that such cost containment efforts will not have
further material adverse effects on the Company.  See "The Company."

    UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN.  As a result of the
Company's continued negative operating results, as well as reduced collections
of accounts receivable, the Company has been experiencing difficulty generating
sufficient cash flows to meet its obligations and sustain its operations.  The
report of the Company's independent auditors on the Company's financial
statements at September 30, 1995, included an explanatory paragraph which stated
that such conditions raise substantial doubt as to the Company's ability to
continue as a going concern.  In an effort to improve this situation for both
the immediate future and the long-term, the Company has sold certain assets
relating to its Hospital Division, taking steps to reduce operating expenses,
attempting to raise additional capital, and working to improve its cash flows.
Nevertheless, there can be no assurance that the Company's efforts will result
in positive effects on the Company's financial condition.  See "The Company."

    INCREASED DEPENDENCE ON EXTENDED CARE SERVICES DIVISION.  Of the Company's
two operating divisions, the Company's Hospital Division and the operation of
its seven freestanding behavioral healthcare treatment facilities historically
represented the majority of the Company's business.  Overall, the freestanding
facilities represented 87%, 67%, and 59% of the Company's net revenues in the
fiscal years ended September 30, 1995, 1994, and 1993, respectively, and


                                       3


<PAGE>


77%, 65%, and 67% of the Company's total assets as of September 30, 1995, 1994,
and 1993, respectively.  The Company's freestanding facilities contributed
significantly to the Company's cash flows and helped to absorb certain
corporate-related expenses.

    Recently, in an attempt to improve the Company's financial condition, the
Company sold six of its seven freestanding facilities and is currently pursuing
opportunities to sell the remaining facility.  Upon the sale of the seventh
freestanding facility, the Company's only remaining business will be the
Extended Care Services Division.  If the Extended Care Services Division is
unable to accomplish its growth objectives or produce positive earnings, the
sale of the Hospital Division's freestanding facilities could be disadvantageous
to the stockholders of the Company and could have a materially adverse effect on
the results of the Company's operations.  The Company's Extended Care Services
Division, since its founding in October 1993, has generated only 13% and 3% of
net revenues for the years ended September 30, 1995 and 1994, respectively and
26% of net revenues for the first six months of fiscal 1996.  In addition, the
rapid expansion of the Extended Care Services Division has resulted in increased
costs, and thus, with the allocation of overhead related to the operations of
the Extended Care Services Division, the Extended Care Services Division has not
yet achieved profitable results.  The Company formed its Extended Care Services
Division to pursue opportunities to provide on-site care to nursing home
residents and other patients needing less acute care.  In November 1993, the
Company acquired the assets of Atlanta-based ICH Services, L.L.C. (successor to
HCI Services, Inc.), which provides behavioral health and other specialized
medical services to residents of extended care facilities, such as nursing
homes, skilled nursing facilities, and assisted living facilities.  The focus of
the Company's on-site medical and behavioral healthcare service programs is to
arrange for the provision of clinically-appropriate cost-effective care to
residents of extended care facilities.

    While the Company intends to utilize a portion of the proceeds from the
sale of the freestanding facilities to expand the Extended Care Services
Division through acquisitions and internal growth, no assurances can be given
that the Company will have funds available for such purpose or that the Company
will be successful in selling its remaining freestanding facility, or in the
event acquisitions are consummated that the Company will be successful in
generating profits from the Extended Care Services Division, or that the
strategy of focusing on growing the Extended Care Services Division through
internal expansion and acquisitions will not result in further increased costs.
See "The Company."

    POSSIBLE NEED TO USE PROCEEDS FROM THE SALE OF THE FREESTANDING FACILITIES
TO REPAY THE MEDIQ NOTE.  As of July 10, 1996, the Company had $10,861,110
outstanding under its note payable to MEDIQ Incorporated ("MEDIQ") (original
principal amount of $11,500,000) that was executed in connection with the
distribution of the Company's stock to MEDIQ's stockholders (the "MEDIQ Note").
The MEDIQ Note bears interest at prime plus 1.5% per annum, with monthly
payments of interest only through September 1995, and then monthly principal and
interest payments for the following three years, based on a fifteen year
amortization period, with the remaining balance due in August 1998.  The MEDIQ
Note may be prepaid in whole or in part without penalty.  The MEDIQ Note is
collateralized by a note receivable obtained by the Company as partial
consideration for the sale of the Oakview Treatment Center, one of the Company's
former freestanding facilities.  The Company pledged the note receivable to
MEDIQ in connection with obtaining a waiver from MEDIQ of an event of default
provision of the MEDIQ Note relating to the sale of the assets of a significant
subsidiary.  See "The Company."


                                       4


<PAGE>


    The Company does not anticipate that cash flows from operations will be
sufficient to repay the MEDIQ Note upon maturity in 1998.  In addition, as
reflected in the financial statements of the Company for the fiscal year ended
September 30, 1995, and the report of the Company's independent auditors
thereon, the Company has been experiencing difficulty generating sufficient cash
flows to meet its obligations and sustain its operations and, as a result, may
not be able to meet the monthly principal and interest obligations under the
MEDIQ Note.  A portion of the net proceeds from the BHC Sale (as hereinafter
defined; see "The Company") is available to the Company to fund the monthly
obligations and a portion of the principal obligations upon maturity, if
necessary, of the MEDIQ Note.  MEDIQ has pledged the MEDIQ Note as collateral
for certain of its indebtedness to a third party unaffiliated with MEDIQ or the
Company.  In the event of default by MEDIQ on such indebtedness, such third
party would obtain all of MEDIQ's rights under the MEDIQ Note, including the
right to the payment of principal and interest as and when due in accordance
with the terms of the MEDIQ Note.

    The MEDIQ Note also provides for certain events of default, including:
"The . . . sale of all or substantially all of the assets of [the Company] . .
 ."  In an attempt to preclude the possibility of a dispute as to whether the BHC
Sale constitutes the sale of all or substantially all of the assets of the
Company for purposes of the MEDIQ Note, the Company, prior to the sale, sent
MEDIQ a letter requesting a waiver of this provision in connection therewith.
MEDIQ sent the Company a letter in which MEDIQ declined to grant such a waiver.
Since the completion of the BHC Sale, the Company has not received any notice of
default under the MEDIQ Note on this basis.  Nevertheless, in the event MEDIQ
attempts to accelerate the MEDIQ Note, the Company intends to aggressively
defend its position in any legal proceeding.  There can be no assurances that
the Company would be able to obtain a favorable decision in such a legal
proceeding.  In the event the Company were to receive an adverse decision on
this matter, the outstanding principal balance on the MEDIQ Note would become
immediately due and payable in full.  In that event, the Company may be required
to apply the remainder of the net proceeds from the BHC Sale toward the
repayment of the outstanding principal of the MEDIQ Note, obtain alternative
sources of cash with which to satisfy such obligation, or obtain from MEDIQ a
modification to the MEDIQ Note.  The current balance of the net proceeds from
the BHC Sale is insufficient to repay the entire outstanding principal balance
of the MEDIQ Note.  There can be no assurance that the Company will have
sufficient cash to repay the outstanding principal balance of the MEDIQ Note or
that other sources of cash will be available to the Company in the event the
Company was to receive an adverse decision on such matter.  In such event, the
Company may be unable to fulfill its debt obligations and also sustain
operations at a level at which the Company could continue as a going concern.

    RELATIONSHIPS OF CERTAIN PERSONS WITH MEDIQ.  Michael F. Sandler, in
addition to being a member of the Company's Board of Directors, is also a
director, Senior Vice President - Finance, Treasurer, and Chief Financial
Officer, and a stockholder of MEDIQ.  In addition, H. Scott Miller, also a
member of the Company's Board of Directors, is a director of MEDIQ and provides
financial advisory services to the trust described in the next paragraph.
Consequently, Mr. Sandler's and Mr. Miller's relationships with MEDIQ may be
adverse to the interests of stockholders of the Company generally.

    In addition, approximately 29% of the outstanding shares of the Common
Stock are beneficially owned by Bessie G. Rotko.  Mrs. Rotko is the lifetime
income beneficiary of a trust which holds approximately 19% and 56% of MEDIQ's
outstanding common stock and preferred stock, respectively.  The Trustees,
Bessie G. Rotko, Michael J. Rotko, Judith M. Shipon, John Iskrant and PNC Bank,
National Association, share voting and investment power with respect to the
shares in the trust.  As a result, Mrs. Rotko, together with several other
trustees, may


                                       5


<PAGE>


have effective control over all matters requiring approval by the stockholders
of the Company.  The address of the trustees is c/o MEDIQ Incorporated, One
MEDIQ Plaza, Pennsauken, NJ 08110.  Mrs. Rotko is the mother of Michael J. Rotko
and Judith M. Shipon.  In addition, Michael J. Rotko and Judith M. Shipon each
own approximately 2% and 7% of MEDIQ's outstanding common stock and preferred
stock, respectively.  Michael J. Rotko is also the Chairman of the Board of
Directors of MEDIQ.

    REIMBURSEMENT FOR MENTAL HEALTH SERVICES.  A significant portion of the
Company's revenues are derived from reimbursement from government programs such
as Medicare and Medicaid, which are highly regulated and subject to change.
Future changes in reimbursement could have a material effect on the Company's
operating results.

    COMPETITION.  Competition in the mental health industry is intense.  The
Company currently competes with companies that are larger and have greater
resources than the Company.  Any material adverse change in the competitive
environment could have a material adverse effect on the Company's results of
operations and financial condition.

    DILUTION.  The Company's business strategy includes pursuing possible
acquisition opportunities, which has involved, and may involve in the future,
using shares of the Common Stock as consideration for business transactions.
The issuance of additional shares of the Common Stock in such transactions could
have a dilutive effect on the shares outstanding.

    DEPENDENCE UPON EXISTING MANAGEMENT.  The Company's business and operations
are dependent, in part, upon the continued services of existing senior
management, in particular Michael S. Pinkert, President, Chief Executive Officer
and a Director.  The loss of Mr. Pinkert's services would have a material
adverse effect on the Company.

    DIVIDEND POLICY.  The Company has not declared any dividends on the Common
Stock and does not anticipate the declaration and payment of cash dividends in
the future.  It is the present intention of the Company to retain any future
earnings to support the continued growth of the business.  Any future
determination to pay cash dividends will be at the discretion of the Board of
Directors and will be dependent upon the Company's financial condition, results
of operations, capital requirements and such other factors as the Board of
Directors shall deem relevant.

                                 THE COMPANY

    The Company offers, arranges for and manages behavioral healthcare services
primarily through extended care treatment settings.  Since its founding, the
Company's goal has been to offer the highest quality, cost-effective care in the
industry.  Prior to the recent sales of six of the Company's freestanding
facilities, the Company's Hospital Division operated seven psychiatric and
substance abuse facilities, delivering a full spectrum of behavioral health
services ranging from traditional inpatient care to alternative care programs,
such as partial hospitalization and outpatient treatment.  These seven
freestanding facilities generated 87% of net revenue for fiscal 1995 and
comprised 77% of the Company's total assets at the end of fiscal 1995.  The
Company's Extended Care Services Division provides specialized medical and
behavioral health services to approximately 795 nursing homes in twelve states.
The Extended Care Services Division also provides behavioral health care to more
than 2,000 Medicaid patients residing in nursing homes under a contract with the
State of Georgia.


                                       6


<PAGE>


    Historically, the Company's principal businesses were the operation of
freestanding behavioral healthcare facilities and the management of behavioral
healthcare programs under contracts with acute care hospitals.  The market for
behavioral healthcare has undergone dramatic changes in recent years.  Pressure
on providers to reduce costs has resulted in an increase in the development and
utilization of alternatives to long-term in-patient care, and a decrease in the
utilization of in-patient care and reimbursement rates.  With market forces
emphasizing managed care approaches to healthcare, this trend is anticipated to
continue.

    In response to these changes and their adverse impact on the Company's
operating results, significant changes have been made in the structure of the
Company's operations.  In August 1994, the Company merged its contract
management business (which represented 29% of the Company's net revenues in
fiscal 1994) with a competitor through the creation of a joint venture.  In
March 1995, the Company sold its interest in the joint venture to such
competitor.  In addition, the Company decided to pursue a growth strategy
focused on its Extended Care Services Division (which represented 13% of the
Company's net revenues in fiscal 1995) through the pursuit of non-physician
practice acquisition and management opportunities.  Finally, the Company is
pursuing opportunities to sell its remaining freestanding behavioral healthcare
facility.

    On April 5, 1996, the Company sold Oakview Treatment Center to a non-profit
corporation affiliated with a privately-owned operator of two psychiatric
hospitals for $50,000 in cash and $2,150,000 evidenced by two promissory notes
payable to the Company.  The notes are payable in monthly installments of
principal and interest (at prime) based on a fifteen year amortization, with the
remaining principal due in five years (or earlier under certain circumstances).
In connection with obtaining a waiver from MEDIQ of an event of default
provision of the MEDIQ Note relating to the sale of the assets of a significant
subsidiary, the Company pledged one of the notes receivable (with a principal
balance of $1,875,000) as collateral for the Company's obligations under the
MEDIQ Note.

    On May 31, 1996, the Company sold certain assets, consisting principally of
five of its freestanding behavioral healthcare facilities, to Behavioral
Healthcare Corporation ("BHC"), a Delaware corporation, with its principal
offices located in Nashville, Tennessee, pursuant to an Asset Purchase
Agreement, dated as of January 24, 1996, and amended as of April 11, 1996, by
and between the Company and BHC (the "BHC Sale").  The Hospitals were sold for
approximately $10,222,700, consisting of $8,864,500 in cash and $1,358,200 in
assumed liabilities of the freestanding facilities.  The sale price is subject
to certain post-closing adjustments, pursuant to the terms of the Asset
Purchase Agreement, as amended.

    The Company used a portion of the proceeds from the BHC Sale for (i) the
repayment of the principal amount outstanding under the Company's revolving
credit facility ($2,515,000, including related early termination fees of
$174,000); (ii) the extinguishment of a portion of the indebtedness not to be
assumed by BHC paid at the closing of the sale ($692,000, including early
termination fees of $139,000), which consisted primarily of indebtedness secured
by certain of the assets (particularly a facility and certain equipment)
acquired by BHC; and (iii) the funding of the Company's obligation to complete
repairs to two of the freestanding facilities in the amount of $284,000 (which
amount was placed in escrow).  The Company anticipates using the remainder of
the proceeds from the BHC Sale for general working capital, which the Company
anticipates will include expansion of the Extended Care Services Division.  See
"Risk Factors - POSSIBLE NEED TO USE PROCEEDS FROM THE SALE OF THE FREESTANDING
FACILITIES TO REPAY THE MEDIQ NOTE."


                                       7


<PAGE>


    The Company has not entered into any definitive agreement to sell its
remaining freestanding facility.  Accordingly, there can be no assurance that
the Company will be successful in selling the facility.

    The Company was incorporated in 1981 in Virginia, and changed its state of
incorporation to Delaware in 1994.  From 1986 to August 1993, the Company was a
wholly-owned subsidiary of MEDIQ.  In August 1993, MEDIQ distributed the stock
of the Company to MEDIQ's stockholders.  The Company's principal executive
offices are located at 7601 Lewinsville Road, Suite 200, McLean, Virginia 22102,
and its telephone number is (703) 749-4600.


                                USE OF PROCEEDS

         The Company will receive none of the proceeds from the sale of the
shares of Common Stock offered hereby.  The Selling Stockholders are certain
directors, officers, and key employees of the Company and all net proceeds from
the sale of the shares of Common Stock offered hereby will belong to such
Selling Stockholders.  See "Selling Stockholders."  The shares of Common Stock
being offered hereby by the Selling Stockholders have been acquired by the
Selling Stockholders from the Company upon exercise of stock options granted by
the Company pursuant to the Plans.


                                       8


<PAGE>


                              SELLING STOCKHOLDERS

         This Prospectus is to be used in connection with the sale by certain
directors, officers, and key employees of the Company of shares of Common Stock
which have been or may be acquired by such directors, officers, and key
employees upon the exercise of stock options granted by the Company pursuant to
the Plans.  The following persons may offer the following numbers of shares of
Common Stock pursuant to this Prospectus:

<TABLE>
<CAPTION>

- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
                                                                                 Number of
                                                                                 shares of
                                                                                 Common Stock
                                                                                 (and percent
                                                      Number of                  of the
                                                      shares of     Maximum      class)
                                                      Common Stock  Number of    beneficially
                                                      beneficially  shares of    owned after
                          Principal Position with     owned prior   Common       completion
 Name of Selling          the Company during the      to the        Stock being  of the
 Stockholder              past 3 years                offering (1)  offered (2)  offering (3)
- -----------------------------------------------------------------------------------------------
<S>                       <C>                         <C>           <C>          <C>
 Abraham D. Gosman        Director                     13,583(4)    12,500        1,083 *
- -----------------------------------------------------------------------------------------------
 Vicki S. Hammond         Senior Vice President,       61,900(4)     54,000        7,900 *
                          Treasurer, Chief
                          Financial Officer, and
                          Secretary (5)
- -----------------------------------------------------------------------------------------------
 Kenneth A. Kessler, M.D. Director                     92,500        12,500       80,000(2.4%)
- -----------------------------------------------------------------------------------------------
 Bernard J. Korman        Director                    256,720(4)     12,500      244,220(7.7%)
- -----------------------------------------------------------------------------------------------
 Eugene N. Langen         Vice President               13,599        10,000        3,599 *
                          Development and Secretary
- -----------------------------------------------------------------------------------------------
 H. Scott Miller          Director                     13,287(6)     12,500          787*(6)
- -----------------------------------------------------------------------------------------------
 Michael S. Pinkert       President and Chief         204,374(4)     90,000      114,374(3.4%)
                          Executive Officer
- -----------------------------------------------------------------------------------------------
 Michael F. Sandler       Director                     13,583        12,500        1,083 *
- -----------------------------------------------------------------------------------------------
 Bruce Waldo              Executive Vice               20,000        20,000          -0- *
                          President - Hospital
                          Division
- -----------------------------------------------------------------------------------------------
 Carolyn Zimmerman        Vice President                7,379(4)      6,200        1,179 *
                          and Chief
                          Financial Officer
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------

</TABLE>

 *   Represents less than 1% of the outstanding shares of Common Stock.
(1)  Includes all shares of the Common Stock subject to stock options, including
     non-vested options as of the date of filing.
(2)  Each Selling Stockholder may offer less than the number of shares
     indicated.
(3)  Assumes all shares obtained upon exercise of options are sold.
(4)  Includes shares held in retirement accounts.
(5)  Ms. Hammond resigned from the Company as of June 28, 1996.
(6)  Includes shares held by Mr. Miller's spouse.

                                       9


<PAGE>


                              PLAN OF DISTRIBUTION

         The shares of Common Stock offered by the Selling Stockholders from
time to time may be sold on the American Stock Exchange, at prices and at terms
then prevailing, or in negotiated transactions or otherwise.  The shares will be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act.  In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate.  Brokers
or dealers will receive commissions or discounts from the Selling Stockholders
in amounts to be negotiated immediately prior to the sale.  Such brokers or
dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales.  In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this Prospectus.  The amount of Common Stock which may be offered or sold by
means of Rule 144 by each Selling Stockholder, and any other persons with whom
he or she is acting in concert for the purpose of selling such securities, may
not exceed in any three month period one percent of the outstanding shares of
the Company's Common Stock (33,104 shares, based upon the number of outstanding
shares of the Company's Common Stock as of July 23, 1996).

         The Company has furnished to each Selling Stockholder or will furnish
each Selling Stockholder with a copy of this Prospectus and has informed or will
inform each Selling Stockholder of the possible need for delivery of this
Prospectus upon sales made hereunder.

                   INDEMNIFICATION OF DIRECTORS AND OFFICERS

         The Company has adopted the provisions of Section 102(b)(7) of the
Delaware General Corporation Act (the "Delaware Act") which eliminate or limit
the personal liability of a director to the Company or its stockholders for
monetary damages for breach of fiduciary duty under certain circumstances.
Furthermore, under Section 145 of the Delaware Act, the Company shall indemnify
each of its directors and officers against expenses (including reasonable costs,
disbursements, and counsel fees) in connection with any proceeding involving
such person by reason of having been an officer or director, to the extent such
person acted in good faith and in a manner reasonably believed to be in, or not
opposed to, the best interest of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such person's conduct
was unlawful.  The determination of whether indemnification is proper under the
circumstances, unless made by a court, shall be made by a majority of a quorum
of disinterested members of the Company's Board of Directors, independent legal
counsel, or the stockholders of the Company.  The Company has purchased
directors' and officers' liability insurance in an amount totalling $5,000,000,
subject to certain deductibles.


                                       10


<PAGE>


         Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.  In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer, or controlling person of the Company in the successful
defense of any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.


                                       11


<PAGE>


         This Prospectus does not constitute an offer to sell, or the 
solicitation of an offer to buy, the securities to which this Prospectus 
relates in any jurisdiction or to any person to whom it is unlawful to make 
such an offer or solicitation in such jurisdiction.  No person has been 
authorized to give any information or to make any representations, other than 
as set forth in this Prospectus, in connection with the offering contained 
herein, and, if given or made, such information or representations must not 
be relied upon as having been authorized by the Company.  Neither the 
delivery of this Prospectus nor any sale made hereunder shall, under any 
circumstances, create any implication that there has been no change in the 
affairs of the Company since the date hereof.


                                 July 25, 1996

                               MHM SERVICES, INC.

                                 750,000 Shares
                                  Common Stock
                                ($.01 par value)

                               TABLE OF CONTENTS

                                                                            PAGE

AVAILABLE INFORMATION........................................................  2

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..............................  2

RISK FACTORS.................................................................  3

THE COMPANY..................................................................  6

USE OF PROCEEDS..............................................................  8

SELLING STOCKHOLDERS.........................................................  9

PLAN OF DISTRIBUTION......................................................... 10

INDEMNIFICATION OF DIRECTORS AND OFFICERS.................................... 10



                                      12


<PAGE>


                                    PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


Item 3.  INCORPORATION OF DOCUMENTS BY REFERENCE

    MHM Services, Inc. (the "Company") (File No. 1-12238) hereby incorporates
by reference into this Registration Statement the following documents:

    (a)  The Company's Annual Report on Form 10-K for the fiscal year ended
         September 30, 1995.

    (b)  The Company's Current Report on Form 8-K filed November 9, 1995.

    (c)  The Company's first amendment to its Annual Report, filed on
         Form 10-K/A on January 29, 1996.

    (d)  The Company's Quarterly Report on Form 10-Q for the quarter ended
         December 31, 1995.

    (e)  The Company's Current Report on Form 8-K filed February 12, 1996.

    (f)  The Company's Quarterly Report on Form 10-Q for the quarter ended
         March 31, 1996.

    (g)  The Company's Current Report on Form 8-K filed April 17, 1996 (as
         amended by the Company's Current Report on Form 8-K/A filed
         June 19, 1996).

    (h)  The Company's Current Report on Form 8-K filed May 31, 1996.

    (i)  The Company's Current Report on Form 8-K filed June 17, 1996 (as
         amended by the Company's Current Report on Form 8-K/A filed
         June 25, 1996).

    (j)  The description of the Company's Common Stock contained in the
         Company's Registration Statement on Form 8-B, filed with the
         Commission by the Company on January 27, 1995 (by which the Company
         succeeded to a Registration Statement on Form 10, filed with the
         Commission on August 19, 1993).

    All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934,
as amended, prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing of such
document.


                                     II-1


<PAGE>


Item 4.  DESCRIPTION OF SECURITIES

         Not applicable.

Item 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL

         Not applicable.

Item 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

    The Company has adopted the provisions of Section 102(b)(7) of the Delaware
General Corporation Act (the "Delaware Act") which eliminate or limit the
personal liability of a director to the Company or its stockholders for monetary
damages for breach of fiduciary duty under certain circumstances.  Furthermore,
under Section 145 of the Delaware Act, the Company shall indemnify each of its
directors and officers against expenses (including reasonable costs,
disbursements, and counsel fees) in connection with any proceeding involving
such person by reason of having been an officer or director, to the extent such
person acted in good faith and in a manner reasonably believed to be in, or not
opposed to, the best interest of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such person's conduct
was unlawful.  The determination of whether indemnification is proper under the
circumstances, unless made by a court, shall be made by a majority of a quorum
of disinterested members of the Company's Board of Directors, independent legal
counsel, or the stockholders of the Company.  The Company has purchased
directors' and officers' liability insurance in an amount totalling $5,000,000,
subject to certain deductibles.

    Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers, and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, as amended, and is, therefore, unenforceable.  In the event that a claim
for indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer, or controlling
person of the Company in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.

Item 7.  EXEMPTION FROM REGISTRATION CLAIMED

         Not applicable.


                                     II-2


<PAGE>


Item 8.  EXHIBITS

    4.1  Specimen copy of Common Stock Certificate (incorporated by reference
         to the Company's Registration Statement on Form 8-B, filed with the
         Commission by the Company on January 27, 1995 (by which the Company
         succeeded to a Registration Statement on Form 10, filed with the
         Commission on August 19, 1993))

    4.2  The Company's Restated Certificate of Incorporation (incorporated by
         reference to the Company's Annual Report on Form 10-K for the fiscal
         year ended September 30, 1995, as amended)

    4.3  The Company's Amended Bylaws (incorporated by reference to the
         Company's Annual Report on Form 10-K for the fiscal year ended
         September 30, 1995, as amended)

    5    Opinion of Ballard Spahr Andrews & Ingersoll

    23.1 Consent of Deloitte & Touche LLP

    23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5)

    24   Power of Attorney (included on signature page)

    99.1 Mental Health Management, Inc. 1993 Stock Option Plan (incorporated by
         reference to the Company's Annual Report on Form 10-K for the fiscal
         year ended September 30, 1993, as amended)

    99.2 Amendment No. 1 to the Mental Health Management, Inc. 1993 Stock
         Option Plan

    99.3 Mental Health Management, Inc. 1993 Stock Option Plan for Non-Employee
         Directors (incorporated by reference to the Company's Annual Report of
         Form 10-K for the fiscal year ended September 30, 1993, as amended)

    99.4 Mental Health Management, Inc. Non-Employee Directors' Stock Option
         Plan


                                     II-3

<PAGE>


Item 9.  UNDERTAKINGS

         The Company hereby undertakes:

              (1)  To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:

                     (i)     To include any prospectus required by Section
         10(a)(3) of the Securities Act of 1933, as amended;

                    (ii)     To reflect in the prospectus any facts or events
         arising after the effective date of this Registration Statement (or
         the most recent post-effective amendment thereof) which, individually
         or in the aggregate, represent a fundamental change in the information
         set forth in this Registration Statement.  Notwithstanding the
         foregoing, any increase or decrease in the volume of securities
         offered (if the total dollar value of securities offered would not
         exceed that which was registered) and any deviation from the low or
         high end of the estimated maximum offering range may be reflected in
         the form of prospectus filed with the Commission pursuant to Rule
         424(b) if, in the aggregate, the changes in volume and price represent
         no more than a 20% change in the maximum aggregate offering price set
         forth in the "Calculation of Registration Fee" table in the effective
         Registration Statement.

                   (iii)     To include any material information with respect
         to the plan of distribution not previously disclosed in this
         Registration Statement or any material change in such information in
         this Registration Statement;

                 Provided, however, that paragraphs (1)(i) and (1)(ii) do not
         apply if the information required to be included in a post-effective
         amendment by those paragraphs is contained in periodic reports filed
         with or furnished to the Commission by the Company pursuant to Section
         13 or Section 15(d) of the Securities Exchange Act of 1934, as
         amended, that are incorporated by reference in this Registration
         Statement.

              (2)  That, for the purpose of determining any liability under the
    Securities Act of 1933, as amended, each such post-effective amendment
    shall be deemed to be a new registration statement relating to the
    securities offered therein, and the offering of such securities at that
    time shall be deemed to be the initial bona fide offering thereof.

              (3)  To remove from any registration by means of a post-effective
    amendment any of the securities being registered which remain unsold at the
    termination of the offering.

         The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, as amended, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended,


                                     II-4


<PAGE>


that is incorporated by reference in this Registration Statement shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

         Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended, and is, therefore,
unenforceable.  In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933, as amended, and will be governed by the
final adjudication of such issue.


                                    II-5
<PAGE>


                                   SIGNATURES


         Pursuant to the requirements of the Securities Act of 1933, as 
amended, the Company certifies that it has reasonable grounds to believe that 
it meets all of the requirements for filing on Form S-8 and has duly caused 
this Registration Statement to be signed on its behalf by the undersigned, 
thereunto duly authorized in the County of Fairfax, Commonwealth of Virginia, 
on the date below:

Dated:   July 25, 1996                 MHM Services, Inc.

                             By:  /s/ Michael S. Pinkert
                                  ----------------------------------------------
                                  Michael S. Pinkert, President
                                  and Chief Executive Officer

                             By:  /s/ Carolyn Zimmerman
                                 ----------------------------------------------
                                  Carolyn Zimmerman
                                  Vice President and
                                  Chief Financial Officer



                               POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael S. Pinkert, as true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign the
Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.


Signature                        Title                                Date
- ---------                        -----                                ----

/s/ Michael S. Pinkert      President, Chief Executive Officer,   July 25, 1996
- ------------------------    and Director
Michael S. Pinkert

/s/ Carolyn Zimmerman       Vice President and                    July 25, 1996
- ------------------------    Chief Financial Officer
Carolyn Zimmerman

/s/ Abraham D. Gosman       Director                              July 25, 1996
- ------------------------
Abraham D. Gosman

/s/ Kenneth A. Kessler      Director                              July 25, 1996
- ------------------------
Kenneth A. Kessler, M.D.

/s/ H. Scott Miller         Director                              July 25, 1996
- ------------------------
Scott Miller

/s/ Michael F. Sandler      Director                              July 25, 1996
- ------------------------
Michael F. Sandler



<PAGE>


                                 EXHIBIT INDEX



EXHIBIT NO.                       DESCRIPTION                               PAGE
- -----------                       -----------                               ----

    4.1  Specimen copy of Common Stock Certificate (incorporated by
         reference to the Company's Registration Statement on Form 8-B,
         filed with the Commission by the Company on January 27, 1995 (by
         which the Company succeeded to a Registration Statement on Form
         10, filed with the Commission on August 19, 1993))

    4.2  The Company's Restated Certificate of Incorporation (incorporated
         by reference to the Company's Annual Report on Form 10-K for the
         fiscal year ended September 30, 1995, as amended)

    4.3  The Company's Amended Bylaws (incorporated by reference to the
         Company's Annual Report on Form 10-K for the fiscal year ended
         September 30, 1995, as amended)

    5    Opinion of Ballard Spahr Andrews & Ingersoll

    23.1 Consent of Deloitte & Touche LLP

    23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5)

    24   Power of Attorney (included on signature page)

    99.1 Mental Health Management, Inc. 1993 Stock Option Plan
         (incorporated by reference to the Company's Annual Report on Form
         10-K for the fiscal year ended September 30, 1993, as amended)

    99.2 Amendment No. 1 to the Mental Health Management, Inc. 1993 Stock
         Option Plan

    99.3 Mental Health Management, Inc. 1993 Stock Option Plan for
         Non-Employee Directors (incorporated by reference to the
         Company's Annual Report of Form 10-K for the fiscal year
         ended September 30, 1993, as amended)

    99.4 Mental Health Management, Inc. Non-Employee Directors' Stock
         Option Plan
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 61159}]
{"company-data": {"conformed-name": "MHM SERVICES INC", "cik": "0000910408", "assigned-sic": "8062", "irs-number": "521223048", "state-of-incorporation": "DE", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-08849", "film-number": "96599019"}, "business-address": {"street1": "7601 LEWINSVILLE RD", "street2": "STE 200", "city": "MCLEAN", "state": "VA", "zip": "22102", "phone": "7037494600"}, "mail-address": {"street2": "7601 LEWINSVILLE ROAD STE 200", "city": "MCLEAN", "state": "VA", "zip": "22102"}, "former-company": {"former-conformed-name": "MENTAL HEALTH MANAGEMENT INC /VA/", "date-changed": "19930809"}}
As filed with the Securities and Exchange Commission on July 25, 1996

                                                      Registration No. 333-

                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, DC  20549
                                       FORM S-8

               REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                   MHM SERVICES, INC.
                   ----------------------------------------
                (Exact name of registrant as specified in its charter)

         Delaware                                                 52-1223048
- -------------------------------                             -------------------
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)

                  7601 Lewinsville Road, Suite 200, McLean, VA 22102
            ------------------------------------------------------
                 (Address of Principal Executive Offices)  (Zip Code)

                Mental Health Management, Inc. 1993 Stock Option Plan
Mental Health Management, Inc. 1993 Stock Option Plan for Non-Employee Directors
    Mental Health Management, Inc. Non-Employee Directors' Stock Option Plan
    ------------------------------------------------------------------------
                              (Full title of the plans)

                            Michael S. Pinkert, President
                                  MHM Services, Inc.
                  7601 Lewinsville Road, Suite 200, McLean, VA 22102
                                     (703) 749-4600
                    --------------------------------------
                        (Name, address, and telephone number,
                      including area code, of agent for service)

                                       copy to:

   Michael P. Gallagher, Esq.                        Steven J. Feder, Esq.
Ballard Spahr Andrews & Ingersoll             Ballard Spahr Andrews & Ingersoll
  1735 Market St., 51st Floor                    1735 Market St., 51st Floor
    Philadelphia, PA 19103                          Philadelphia, PA 19103
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
                              Calculation of Registration Fee
- ----------------------------------------------------------------------------------------------------
                                      Proposed maximum       Proposed Maximum          Amount of
 Title of securities    Amount to be   offering price            aggregate         Registration fee
 to be registered      registered (1)   per share (2)       offering price (2)
- ----------------------------------------------------------------------------------------------------
Common Stock,         750,000 shares       $ (2)              $1,549,321.88             $534.25
 par value $.01
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
(1)  Pursuant to Rule 416(a) under the Securities Act of 1933, as amended, this
     Registration Statement shall be deemed to cover an indeterminate number of
     additional shares of Common Stock issuable in the event the number of
     outstanding shares of MHM Services, Inc. is increased by split-up,
     reclassification, stock dividend or the like.

(2)  In accordance with Securities and Exchange Commission Rule 457(h)(1), 
     the price shown is based upon (i) 292,100 shares offered pursuant to 
     options outstanding exercisable at the following prices: 159,600 shares 
     at $3.75 per share, 51,000 shares at $3.00 per share, 50,000 shares at 
     $4.25 per share, 12,500 at $1.25 per share, 10,000 shares at $2.5625 
     per share and 9,000 shares at $1.625 per share; and (ii) 457,900 shares 
     reserved for issuance upon exercise of options to be granted in the 
     future, the proposed offering price of which has been determined based 
     upon the average of the high and low price per share of Common Stock on 
     July 19, 1996, as reported by the American Stock Exchange.
PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

         The documents containing the information required to be included in
Part I of this Registration Statement will be provided to all persons who are
selected to participate in the Mental Health Management, Inc. 1993 Stock Option
Plan, the Mental Health Management, Inc. 1993 Stock Option Plan for Non-Employee
Directors, or the Mental Health Management, Inc. Non-Employee Directors' Stock
Option Plan.

RESALE PROSPECTUS

         The following Prospectus is to be used by directors, officers, and key
employees of MHM Services, Inc. who are "affiliates" (as defined in Rule 405
promulgated under the Securities Act of 1933, as amended), in connection with
the sale of Common Stock acquired upon the exercise of stock options granted
pursuant to the Mental Health Management, Inc. 1993 Stock Option Plan, the
Mental Health Management, Inc. 1993 Stock Option Plan for Non-Employee
Directors, or the Mental Health Management, Inc. Non-Employee Directors' Stock
Option Plan.
PROSPECTUS

                                  MHM SERVICES, INC.

                            750,000 SHARES OF COMMON STOCK

         This Prospectus is to be used in connection with the sale by certain
directors, officers, and key employees of MHM Services, Inc. (the "Selling
Stockholders") of an aggregate of up to 750,000 shares of the common stock, par
value $.01 per share (the "Common Stock"), of MHM Services, Inc. (the "Company")
which have been acquired by such Selling Stockholders upon the exercise of stock
options granted by the Company pursuant to the Mental Health Management, Inc.
1993 Stock Option Plan, the Mental Health Management, Inc. 1993 Stock Option
Plan for Non-Employee Directors, or the Mental Health Management, Inc. Non-
Employee Directors' Stock Option Plan (collectively, the "Plans").  See "Selling
Stockholders."  The shares of Common Stock offered hereby may be sold from time
to time in ordinary brokerage transactions at prevailing market prices by the
Selling Stockholders.  See "Plan of Distribution."  The price at which any
Selling Stockholder may sell shares and the brokerage commissions, if any, paid
in connection with a sale are unknown and may vary from transaction to
transaction.

         The Company will pay no underwriting discounts or commissions and will
receive none of the proceeds from the sale of the Common Stock by the Selling
Stockholders.  The expenses of the registration under the Securities Act of
1933, as amended (the "Securities Act"), of the shares of Common Stock offered
hereby will be borne by the Company.

         The Common Stock of the Company is traded on the American Stock
Exchange under the symbol "MHM."  On July 23, 1996, the closing price of the
Common Stock on the American Stock Exchange was $1.4375 per share.

                                ____________________

            PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE DISCUSSION
                           UNDER "RISK FACTORS" ON PAGE 3.

            THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
              SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
                    PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
                       PROSPECTUS.  ANY REPRESENTATION TO THE
                           CONTRARY IS A CRIMINAL OFFENSE.

                                ____________________

                    The date of this Prospectus is July 25, 1996.
AVAILABLE INFORMATION

         The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission").  Reports, proxy
statements, and other information concerning the Company filed with the
Commission may be inspected and copied at the public reference facilities
maintained by the Commission at its office at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as at the Regional Offices of the Commission at
Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois
60661-2551 and 7 World Trade Center, 13th Floor, New York, NY 10048.  Copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.  The Common Stock is listed on the American Stock Exchange.  Such
reports, proxy and information statements and other information can also be
inspected and copied at the offices of the American Stock Exchange, 86 Trinity
Place, New York, NY 10006-1881.

         The Company has filed a registration statement on Form S-8 (herein,
together with all amendments and exhibits thereto, referred to as the
"Registration Statement") under the Securities Act with respect to the
securities offered pursuant to this Prospectus.  This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission.  For further information, reference is made to the Registration
Statement and the exhibits filed as a part thereof.  Statements contained herein
concerning any document filed as an exhibit are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement.  Each such statement is qualified in its
entirety by such reference.

                   INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         The Company (File No. 1-12238) hereby incorporates by reference into
this Registration Statement the following documents: (i) the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 1995; (ii) the
Company's Current Report on Form 8-K filed November 9, 1995; (iii) the Company's
first amendment to its Annual Report, filed on Form 10-K/A on January 29, 1996;
(iv) the Company's Quarterly Report on Form 10-Q for the quarter ended December
31, 1995; (v) the Company's Current Report on Form 8-K filed February 12, 1996;
(vi) the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1996; (vii) the Company's Current Report on Form 8-K filed April 17, 1996 (as
amended by the Company's Current Report on Form 8-K/A filed June 19, 1996);
(viii) the Company's Current Report on Form 8-K filed May 31, 1996; (ix) the
Company's Current Report on Form 8-K filed June 17, 1996 (as amended by the
Company's Current Report on Form 8-K/A filed June 25, 1996); and (x) the
description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-B, filed with the Commission by the Company on
January 27, 1995 (by which the Company succeeded to a Registration Statement on
Form 10, filed with the Commission on August 19, 1993).

         All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the dates of filing of such documents.

         The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, on the written request of
any such person, a copy of any or all of the information which has been or may
be incorporated by reference into this Prospectus, other than exhibits to such
documents.  Written requests for such copies should be directed to MHM Services,
Inc., 7601 Lewinsville Road, Suite 200, McLean, Virginia 22102, Attn: Investor
Relations, telephone (703) 749-4600.

                              [INSIDE FRONT COVER]

                                       2
FORWARD-LOOKING STATEMENTS

    THIS PROSPECTUS INCLUDES FORWARD-LOOKING STATEMENTS BASED ON THE COMPANY'S
CURRENT PLANS AND EXPECTATIONS RELATING TO, AMONG OTHER MATTERS, THE ANTICIPATED
USE OF PROCEEDS FROM THE SALE OF CERTAIN ASSETS OF THE COMPANY, THE PROPOSED
BUSINESS ACTIVITIES OF THE COMPANY AND THE PROPOSED ACTIVITIES OF THE COMPANY
RELATING TO IMPROVING ITS LIQUIDITY.  SUCH STATEMENTS INVOLVE RISKS AND
UNCERTAINTIES WHICH MAY CAUSE ACTUAL FUTURE ACTIVITIES AND RESULTS OF OPERATIONS
TO BE MATERIALLY DIFFERENT FROM THAT SUGGESTED IN THIS PROSPECTUS, INCLUDING,
AMONG OTHERS, THE POSSIBLE NEED TO USE THE NET CASH PROCEEDS FROM THE SALE OF
CERTAIN COMPANY ASSETS FOR THE RETIREMENT OF CERTAIN INDEBTEDNESS.  FOR
ADDITIONAL INFORMATION, SEE "RISK FACTORS" AND "THE COMPANY."

                                  RISK FACTORS

    PRIOR LOSSES.  The Company incurred losses of $4,023,000 for the fiscal
year ended September 30, 1995, and there can be no assurance that the Company
will return to profitability, or that the losses will not be higher for fiscal
year 1996 and future periods.

    CHANGES IN MENTAL HEALTH INDUSTRY.  Recently, the health care industry, in
general, and the mental health industry, in particular, have been the subject of
substantial uncertainty as a result of anticipated and on-going governmental and
other third-party payor efforts to contain health care costs.  The Company's
management believes that a fundamental change has already occurred in the mental
health industry, reflecting a permanent departure from inpatient
hospitalization, upon which the Company's business has been substantially
dependent, as the primary service method in favor of more cost-effective
alternatives.  This change is reflected in decreases in patient days, occupancy
rates, lengths of stay, and reimbursement rates for inpatient care.  The
resulting impact has materially adversely affected the Company's operating
results as well as the Company's efforts to expand its present operations.
While the Company is taking steps to contain present and future operating costs,
there can be no assurance that such cost containment efforts will not have
further material adverse effects on the Company.  See "The Company."

    UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN.  As a result of the
Company's continued negative operating results, as well as reduced collections
of accounts receivable, the Company has been experiencing difficulty generating
sufficient cash flows to meet its obligations and sustain its operations.  The
report of the Company's independent auditors on the Company's financial
statements at September 30, 1995, included an explanatory paragraph which stated
that such conditions raise substantial doubt as to the Company's ability to
continue as a going concern.  In an effort to improve this situation for both
the immediate future and the long-term, the Company has sold certain assets
relating to its Hospital Division, taking steps to reduce operating expenses,
attempting to raise additional capital, and working to improve its cash flows.
Nevertheless, there can be no assurance that the Company's efforts will result
in positive effects on the Company's financial condition.  See "The Company."

    INCREASED DEPENDENCE ON EXTENDED CARE SERVICES DIVISION.  Of the Company's
two operating divisions, the Company's Hospital Division and the operation of
its seven freestanding behavioral healthcare treatment facilities historically
represented the majority of the Company's business.  Overall, the freestanding
facilities represented 87%, 67%, and 59% of the Company's net revenues in the
fiscal years ended September 30, 1995, 1994, and 1993, respectively, and

                                       3
77%, 65%, and 67% of the Company's total assets as of September 30, 1995, 1994,
and 1993, respectively.  The Company's freestanding facilities contributed
significantly to the Company's cash flows and helped to absorb certain
corporate-related expenses.

    Recently, in an attempt to improve the Company's financial condition, the
Company sold six of its seven freestanding facilities and is currently pursuing
opportunities to sell the remaining facility.  Upon the sale of the seventh
freestanding facility, the Company's only remaining business will be the
Extended Care Services Division.  If the Extended Care Services Division is
unable to accomplish its growth objectives or produce positive earnings, the
sale of the Hospital Division's freestanding facilities could be disadvantageous
to the stockholders of the Company and could have a materially adverse effect on
the results of the Company's operations.  The Company's Extended Care Services
Division, since its founding in October 1993, has generated only 13% and 3% of
net revenues for the years ended September 30, 1995 and 1994, respectively and
26% of net revenues for the first six months of fiscal 1996.  In addition, the
rapid expansion of the Extended Care Services Division has resulted in increased
costs, and thus, with the allocation of overhead related to the operations of
the Extended Care Services Division, the Extended Care Services Division has not
yet achieved profitable results.  The Company formed its Extended Care Services
Division to pursue opportunities to provide on-site care to nursing home
residents and other patients needing less acute care.  In November 1993, the
Company acquired the assets of Atlanta-based ICH Services, L.L.C. (successor to
HCI Services, Inc.), which provides behavioral health and other specialized
medical services to residents of extended care facilities, such as nursing
homes, skilled nursing facilities, and assisted living facilities.  The focus of
the Company's on-site medical and behavioral healthcare service programs is to
arrange for the provision of clinically-appropriate cost-effective care to
residents of extended care facilities.

    While the Company intends to utilize a portion of the proceeds from the
sale of the freestanding facilities to expand the Extended Care Services
Division through acquisitions and internal growth, no assurances can be given
that the Company will have funds available for such purpose or that the Company
will be successful in selling its remaining freestanding facility, or in the
event acquisitions are consummated that the Company will be successful in
generating profits from the Extended Care Services Division, or that the
strategy of focusing on growing the Extended Care Services Division through
internal expansion and acquisitions will not result in further increased costs.
See "The Company."

    POSSIBLE NEED TO USE PROCEEDS FROM THE SALE OF THE FREESTANDING FACILITIES
TO REPAY THE MEDIQ NOTE.  As of July 10, 1996, the Company had $10,861,110
outstanding under its note payable to MEDIQ Incorporated ("MEDIQ") (original
principal amount of $11,500,000) that was executed in connection with the
distribution of the Company's stock to MEDIQ's stockholders (the "MEDIQ Note").
The MEDIQ Note bears interest at prime plus 1.5% per annum, with monthly
payments of interest only through September 1995, and then monthly principal and
interest payments for the following three years, based on a fifteen year
amortization period, with the remaining balance due in August 1998.  The MEDIQ
Note may be prepaid in whole or in part without penalty.  The MEDIQ Note is
collateralized by a note receivable obtained by the Company as partial
consideration for the sale of the Oakview Treatment Center, one of the Company's
former freestanding facilities.  The Company pledged the note receivable to
MEDIQ in connection with obtaining a waiver from MEDIQ of an event of default
provision of the MEDIQ Note relating to the sale of the assets of a significant
subsidiary.  See "The Company."

                                       4
The Company does not anticipate that cash flows from operations will be
sufficient to repay the MEDIQ Note upon maturity in 1998.  In addition, as
reflected in the financial statements of the Company for the fiscal year ended
September 30, 1995, and the report of the Company's independent auditors
thereon, the Company has been experiencing difficulty generating sufficient cash
flows to meet its obligations and sustain its operations and, as a result, may
not be able to meet the monthly principal and interest obligations under the
MEDIQ Note.  A portion of the net proceeds from the BHC Sale (as hereinafter
defined; see "The Company") is available to the Company to fund the monthly
obligations and a portion of the principal obligations upon maturity, if
necessary, of the MEDIQ Note.  MEDIQ has pledged the MEDIQ Note as collateral
for certain of its indebtedness to a third party unaffiliated with MEDIQ or the
Company.  In the event of default by MEDIQ on such indebtedness, such third
party would obtain all of MEDIQ's rights under the MEDIQ Note, including the
right to the payment of principal and interest as and when due in accordance
with the terms of the MEDIQ Note.

    The MEDIQ Note also provides for certain events of default, including:
"The . . . sale of all or substantially all of the assets of [the Company] . .
 ."  In an attempt to preclude the possibility of a dispute as to whether the BHC
Sale constitutes the sale of all or substantially all of the assets of the
Company for purposes of the MEDIQ Note, the Company, prior to the sale, sent
MEDIQ a letter requesting a waiver of this provision in connection therewith.
MEDIQ sent the Company a letter in which MEDIQ declined to grant such a waiver.
Since the completion of the BHC Sale, the Company has not received any notice of
default under the MEDIQ Note on this basis.  Nevertheless, in the event MEDIQ
attempts to accelerate the MEDIQ Note, the Company intends to aggressively
defend its position in any legal proceeding.  There can be no assurances that
the Company would be able to obtain a favorable decision in such a legal
proceeding.  In the event the Company were to receive an adverse decision on
this matter, the outstanding principal balance on the MEDIQ Note would become
immediately due and payable in full.  In that event, the Company may be required
to apply the remainder of the net proceeds from the BHC Sale toward the
repayment of the outstanding principal of the MEDIQ Note, obtain alternative
sources of cash with which to satisfy such obligation, or obtain from MEDIQ a
modification to the MEDIQ Note.  The current balance of the net proceeds from
the BHC Sale is insufficient to repay the entire outstanding principal balance
of the MEDIQ Note.  There can be no assurance that the Company will have
sufficient cash to repay the outstanding principal balance of the MEDIQ Note or
that other sources of cash will be available to the Company in the event the
Company was to receive an adverse decision on such matter.  In such event, the
Company may be unable to fulfill its debt obligations and also sustain
operations at a level at which the Company could continue as a going concern.

    RELATIONSHIPS OF CERTAIN PERSONS WITH MEDIQ.  Michael F. Sandler, in
addition to being a member of the Company's Board of Directors, is also a
director, Senior Vice President - Finance, Treasurer, and Chief Financial
Officer, and a stockholder of MEDIQ.  In addition, H. Scott Miller, also a
member of the Company's Board of Directors, is a director of MEDIQ and provides
financial advisory services to the trust described in the next paragraph.
Consequently, Mr. Sandler's and Mr. Miller's relationships with MEDIQ may be
adverse to the interests of stockholders of the Company generally.

    In addition, approximately 29% of the outstanding shares of the Common
Stock are beneficially owned by Bessie G. Rotko.  Mrs. Rotko is the lifetime
income beneficiary of a trust which holds approximately 19% and 56% of MEDIQ's
outstanding common stock and preferred stock, respectively.  The Trustees,
Bessie G. Rotko, Michael J. Rotko, Judith M. Shipon, John Iskrant and PNC Bank,
National Association, share voting and investment power with respect to the
shares in the trust.  As a result, Mrs. Rotko, together with several other
trustees, may

                                       5
have effective control over all matters requiring approval by the stockholders
of the Company.  The address of the trustees is c/o MEDIQ Incorporated, One
MEDIQ Plaza, Pennsauken, NJ 08110.  Mrs. Rotko is the mother of Michael J. Rotko
and Judith M. Shipon.  In addition, Michael J. Rotko and Judith M. Shipon each
own approximately 2% and 7% of MEDIQ's outstanding common stock and preferred
stock, respectively.  Michael J. Rotko is also the Chairman of the Board of
Directors of MEDIQ.

    REIMBURSEMENT FOR MENTAL HEALTH SERVICES.  A significant portion of the
Company's revenues are derived from reimbursement from government programs such
as Medicare and Medicaid, which are highly regulated and subject to change.
Future changes in reimbursement could have a material effect on the Company's
operating results.

    COMPETITION.  Competition in the mental health industry is intense.  The
Company currently competes with companies that are larger and have greater
resources than the Company.  Any material adverse change in the competitive
environment could have a material adverse effect on the Company's results of
operations and financial condition.

    DILUTION.  The Company's business strategy includes pursuing possible
acquisition opportunities, which has involved, and may involve in the future,
using shares of the Common Stock as consideration for business transactions.
The issuance of additional shares of the Common Stock in such transactions could
have a dilutive effect on the shares outstanding.

    DEPENDENCE UPON EXISTING MANAGEMENT.  The Company's business and operations
are dependent, in part, upon the continued services of existing senior
management, in particular Michael S. Pinkert, President, Chief Executive Officer
and a Director.  The loss of Mr. Pinkert's services would have a material
adverse effect on the Company.

    DIVIDEND POLICY.  The Company has not declared any dividends on the Common
Stock and does not anticipate the declaration and payment of cash dividends in
the future.  It is the present intention of the Company to retain any future
earnings to support the continued growth of the business.  Any future
determination to pay cash dividends will be at the discretion of the Board of
Directors and will be dependent upon the Company's financial condition, results
of operations, capital requirements and such other factors as the Board of
Directors shall deem relevant.

                                 THE COMPANY

    The Company offers, arranges for and manages behavioral healthcare services
primarily through extended care treatment settings.  Since its founding, the
Company's goal has been to offer the highest quality, cost-effective care in the
industry.  Prior to the recent sales of six of the Company's freestanding
facilities, the Company's Hospital Division operated seven psychiatric and
substance abuse facilities, delivering a full spectrum of behavioral health
services ranging from traditional inpatient care to alternative care programs,
such as partial hospitalization and outpatient treatment.  These seven
freestanding facilities generated 87% of net revenue for fiscal 1995 and
comprised 77% of the Company's total assets at the end of fiscal 1995.  The
Company's Extended Care Services Division provides specialized medical and
behavioral health services to approximately 795 nursing homes in twelve states.
The Extended Care Services Division also provides behavioral health care to more
than 2,000 Medicaid patients residing in nursing homes under a contract with the
State of Georgia.

                                       6
Historically, the Company's principal businesses were the operation of
freestanding behavioral healthcare facilities and the management of behavioral
healthcare programs under contracts with acute care hospitals.  The market for
behavioral healthcare has undergone dramatic changes in recent years.  Pressure
on providers to reduce costs has resulted in an increase in the development and
utilization of alternatives to long-term in-patient care, and a decrease in the
utilization of in-patient care and reimbursement rates.  With market forces
emphasizing managed care approaches to healthcare, this trend is anticipated to
continue.

    In response to these changes and their adverse impact on the Company's
operating results, significant changes have been made in the structure of the
Company's operations.  In August 1994, the Company merged its contract
management business (which represented 29% of the Company's net revenues in
fiscal 1994) with a competitor through the creation of a joint venture.  In
March 1995, the Company sold its interest in the joint venture to such
competitor.  In addition, the Company decided to pursue a growth strategy
focused on its Extended Care Services Division (which represented 13% of the
Company's net revenues in fiscal 1995) through the pursuit of non-physician
practice acquisition and management opportunities.  Finally, the Company is
pursuing opportunities to sell its remaining freestanding behavioral healthcare
facility.

    On April 5, 1996, the Company sold Oakview Treatment Center to a non-profit
corporation affiliated with a privately-owned operator of two psychiatric
hospitals for $50,000 in cash and $2,150,000 evidenced by two promissory notes
payable to the Company.  The notes are payable in monthly installments of
principal and interest (at prime) based on a fifteen year amortization, with the
remaining principal due in five years (or earlier under certain circumstances).
In connection with obtaining a waiver from MEDIQ of an event of default
provision of the MEDIQ Note relating to the sale of the assets of a significant
subsidiary, the Company pledged one of the notes receivable (with a principal
balance of $1,875,000) as collateral for the Company's obligations under the
MEDIQ Note.

    On May 31, 1996, the Company sold certain assets, consisting principally of
five of its freestanding behavioral healthcare facilities, to Behavioral
Healthcare Corporation ("BHC"), a Delaware corporation, with its principal
offices located in Nashville, Tennessee, pursuant to an Asset Purchase
Agreement, dated as of January 24, 1996, and amended as of April 11, 1996, by
and between the Company and BHC (the "BHC Sale").  The Hospitals were sold for
approximately $10,222,700, consisting of $8,864,500 in cash and $1,358,200 in
assumed liabilities of the freestanding facilities.  The sale price is subject
to certain post-closing adjustments, pursuant to the terms of the Asset
Purchase Agreement, as amended.

    The Company used a portion of the proceeds from the BHC Sale for (i) the
repayment of the principal amount outstanding under the Company's revolving
credit facility ($2,515,000, including related early termination fees of
$174,000); (ii) the extinguishment of a portion of the indebtedness not to be
assumed by BHC paid at the closing of the sale ($692,000, including early
termination fees of $139,000), which consisted primarily of indebtedness secured
by certain of the assets (particularly a facility and certain equipment)
acquired by BHC; and (iii) the funding of the Company's obligation to complete
repairs to two of the freestanding facilities in the amount of $284,000 (which
amount was placed in escrow).  The Company anticipates using the remainder of
the proceeds from the BHC Sale for general working capital, which the Company
anticipates will include expansion of the Extended Care Services Division.  See
"Risk Factors - POSSIBLE NEED TO USE PROCEEDS FROM THE SALE OF THE FREESTANDING
FACILITIES TO REPAY THE MEDIQ NOTE."

                                       7
The Company has not entered into any definitive agreement to sell its
remaining freestanding facility.  Accordingly, there can be no assurance that
the Company will be successful in selling the facility.

    The Company was incorporated in 1981 in Virginia, and changed its state of
incorporation to Delaware in 1994.  From 1986 to August 1993, the Company was a
wholly-owned subsidiary of MEDIQ.  In August 1993, MEDIQ distributed the stock
of the Company to MEDIQ's stockholders.  The Company's principal executive
offices are located at 7601 Lewinsville Road, Suite 200, McLean, Virginia 22102,
and its telephone number is (703) 749-4600.

                                USE OF PROCEEDS

         The Company will receive none of the proceeds from the sale of the
shares of Common Stock offered hereby.  The Selling Stockholders are certain
directors, officers, and key employees of the Company and all net proceeds from
the sale of the shares of Common Stock offered hereby will belong to such
Selling Stockholders.  See "Selling Stockholders."  The shares of Common Stock
being offered hereby by the Selling Stockholders have been acquired by the
Selling Stockholders from the Company upon exercise of stock options granted by
the Company pursuant to the Plans.

                                       8
SELLING STOCKHOLDERS

         This Prospectus is to be used in connection with the sale by certain
directors, officers, and key employees of the Company of shares of Common Stock
which have been or may be acquired by such directors, officers, and key
employees upon the exercise of stock options granted by the Company pursuant to
the Plans.  The following persons may offer the following numbers of shares of
Common Stock pursuant to this Prospectus:
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
                                                                                 Number of
                                                                                 shares of
                                                                                 Common Stock
                                                                                 (and percent
                                                      Number of                  of the
                                                      shares of     Maximum      class)
                                                      Common Stock  Number of    beneficially
                                                      beneficially  shares of    owned after
                          Principal Position with     owned prior   Common       completion
 Name of Selling          the Company during the      to the        Stock being  of the
 Stockholder              past 3 years                offering (1)  offered (2)  offering (3)
- -----------------------------------------------------------------------------------------------
Abraham D. Gosman        Director                     13,583(4)    12,500        1,083 *
- -----------------------------------------------------------------------------------------------
 Vicki S. Hammond         Senior Vice President,       61,900(4)     54,000        7,900 *
                          Treasurer, Chief
                          Financial Officer, and
                          Secretary (5)
- -----------------------------------------------------------------------------------------------
 Kenneth A. Kessler, M.D. Director                     92,500        12,500       80,000(2.4%)
- -----------------------------------------------------------------------------------------------
 Bernard J. Korman        Director                    256,720(4)     12,500      244,220(7.7%)
- -----------------------------------------------------------------------------------------------
 Eugene N. Langen         Vice President               13,599        10,000        3,599 *
                          Development and Secretary
- -----------------------------------------------------------------------------------------------
 H. Scott Miller          Director                     13,287(6)     12,500          787*(6)
- -----------------------------------------------------------------------------------------------
 Michael S. Pinkert       President and Chief         204,374(4)     90,000      114,374(3.4%)
                          Executive Officer
- -----------------------------------------------------------------------------------------------
 Michael F. Sandler       Director                     13,583        12,500        1,083 *
- -----------------------------------------------------------------------------------------------
 Bruce Waldo              Executive Vice               20,000        20,000          -0- *
                          President - Hospital
                          Division
- -----------------------------------------------------------------------------------------------
 Carolyn Zimmerman        Vice President                7,379(4)      6,200        1,179 *
                          and Chief
                          Financial Officer
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
*   Represents less than 1% of the outstanding shares of Common Stock.
(1)  Includes all shares of the Common Stock subject to stock options, including
     non-vested options as of the date of filing.
(2)  Each Selling Stockholder may offer less than the number of shares
     indicated.
(3)  Assumes all shares obtained upon exercise of options are sold.
(4)  Includes shares held in retirement accounts.
(5)  Ms. Hammond resigned from the Company as of June 28, 1996.
(6)  Includes shares held by Mr. Miller's spouse.

                                       9
PLAN OF DISTRIBUTION

         The shares of Common Stock offered by the Selling Stockholders from
time to time may be sold on the American Stock Exchange, at prices and at terms
then prevailing, or in negotiated transactions or otherwise.  The shares will be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act.  In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate.  Brokers
or dealers will receive commissions or discounts from the Selling Stockholders
in amounts to be negotiated immediately prior to the sale.  Such brokers or
dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales.  In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this Prospectus.  The amount of Common Stock which may be offered or sold by
means of Rule 144 by each Selling Stockholder, and any other persons with whom
he or she is acting in concert for the purpose of selling such securities, may
not exceed in any three month period one percent of the outstanding shares of
the Company's Common Stock (33,104 shares, based upon the number of outstanding
shares of the Company's Common Stock as of July 23, 1996).

         The Company has furnished to each Selling Stockholder or will furnish
each Selling Stockholder with a copy of this Prospectus and has informed or will
inform each Selling Stockholder of the possible need for delivery of this
Prospectus upon sales made hereunder.

                   INDEMNIFICATION OF DIRECTORS AND OFFICERS

         The Company has adopted the provisions of Section 102(b)(7) of the
Delaware General Corporation Act (the "Delaware Act") which eliminate or limit
the personal liability of a director to the Company or its stockholders for
monetary damages for breach of fiduciary duty under certain circumstances.
Furthermore, under Section 145 of the Delaware Act, the Company shall indemnify
each of its directors and officers against expenses (including reasonable costs,
disbursements, and counsel fees) in connection with any proceeding involving
such person by reason of having been an officer or director, to the extent such
person acted in good faith and in a manner reasonably believed to be in, or not
opposed to, the best interest of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such person's conduct
was unlawful.  The determination of whether indemnification is proper under the
circumstances, unless made by a court, shall be made by a majority of a quorum
of disinterested members of the Company's Board of Directors, independent legal
counsel, or the stockholders of the Company.  The Company has purchased
directors' and officers' liability insurance in an amount totalling $5,000,000,
subject to certain deductibles.

                                       10
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.  In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer, or controlling person of the Company in the successful
defense of any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

                                       11
This Prospectus does not constitute an offer to sell, or the 
solicitation of an offer to buy, the securities to which this Prospectus 
relates in any jurisdiction or to any person to whom it is unlawful to make 
such an offer or solicitation in such jurisdiction.  No person has been 
authorized to give any information or to make any representations, other than 
as set forth in this Prospectus, in connection with the offering contained 
herein, and, if given or made, such information or representations must not 
be relied upon as having been authorized by the Company.  Neither the 
delivery of this Prospectus nor any sale made hereunder shall, under any 
circumstances, create any implication that there has been no change in the 
affairs of the Company since the date hereof.

                                 July 25, 1996

                               MHM SERVICES, INC.

                                 750,000 Shares
                                  Common Stock
                                ($.01 par value)

                               TABLE OF CONTENTS

                                                                            PAGE

AVAILABLE INFORMATION........................................................  2

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..............................  2

RISK FACTORS.................................................................  3

THE COMPANY..................................................................  6

USE OF PROCEEDS..............................................................  8

SELLING STOCKHOLDERS.........................................................  9

PLAN OF DISTRIBUTION......................................................... 10

INDEMNIFICATION OF DIRECTORS AND OFFICERS.................................... 10

                                      12
PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  INCORPORATION OF DOCUMENTS BY REFERENCE

    MHM Services, Inc. (the "Company") (File No. 1-12238) hereby incorporates
by reference into this Registration Statement the following documents:

    (a)  The Company's Annual Report on Form 10-K for the fiscal year ended
         September 30, 1995.

    (b)  The Company's Current Report on Form 8-K filed November 9, 1995.

    (c)  The Company's first amendment to its Annual Report, filed on
         Form 10-K/A on January 29, 1996.

    (d)  The Company's Quarterly Report on Form 10-Q for the quarter ended
         December 31, 1995.

    (e)  The Company's Current Report on Form 8-K filed February 12, 1996.

    (f)  The Company's Quarterly Report on Form 10-Q for the quarter ended
         March 31, 1996.

    (g)  The Company's Current Report on Form 8-K filed April 17, 1996 (as
         amended by the Company's Current Report on Form 8-K/A filed
         June 19, 1996).

    (h)  The Company's Current Report on Form 8-K filed May 31, 1996.

    (i)  The Company's Current Report on Form 8-K filed June 17, 1996 (as
         amended by the Company's Current Report on Form 8-K/A filed
         June 25, 1996).

    (j)  The description of the Company's Common Stock contained in the
         Company's Registration Statement on Form 8-B, filed with the
         Commission by the Company on January 27, 1995 (by which the Company
         succeeded to a Registration Statement on Form 10, filed with the
         Commission on August 19, 1993).

    All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934,
as amended, prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing of such
document.

                                     II-1
Item 4.  DESCRIPTION OF SECURITIES

         Not applicable.

Item 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL

         Not applicable.

Item 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

    The Company has adopted the provisions of Section 102(b)(7) of the Delaware
General Corporation Act (the "Delaware Act") which eliminate or limit the
personal liability of a director to the Company or its stockholders for monetary
damages for breach of fiduciary duty under certain circumstances.  Furthermore,
under Section 145 of the Delaware Act, the Company shall indemnify each of its
directors and officers against expenses (including reasonable costs,
disbursements, and counsel fees) in connection with any proceeding involving
such person by reason of having been an officer or director, to the extent such
person acted in good faith and in a manner reasonably believed to be in, or not
opposed to, the best interest of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such person's conduct
was unlawful.  The determination of whether indemnification is proper under the
circumstances, unless made by a court, shall be made by a majority of a quorum
of disinterested members of the Company's Board of Directors, independent legal
counsel, or the stockholders of the Company.  The Company has purchased
directors' and officers' liability insurance in an amount totalling $5,000,000,
subject to certain deductibles.

    Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers, and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, as amended, and is, therefore, unenforceable.  In the event that a claim
for indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer, or controlling
person of the Company in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.

Item 7.  EXEMPTION FROM REGISTRATION CLAIMED

         Not applicable.

                                     II-2
Item 8.  EXHIBITS

    4.1  Specimen copy of Common Stock Certificate (incorporated by reference
         to the Company's Registration Statement on Form 8-B, filed with the
         Commission by the Company on January 27, 1995 (by which the Company
         succeeded to a Registration Statement on Form 10, filed with the
         Commission on August 19, 1993))

    4.2  The Company's Restated Certificate of Incorporation (incorporated by
         reference to the Company's Annual Report on Form 10-K for the fiscal
         year ended September 30, 1995, as amended)

    4.3  The Company's Amended Bylaws (incorporated by reference to the
         Company's Annual Report on Form 10-K for the fiscal year ended
         September 30, 1995, as amended)

    5    Opinion of Ballard Spahr Andrews & Ingersoll

    23.1 Consent of Deloitte & Touche LLP

    23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5)

    24   Power of Attorney (included on signature page)

    99.1 Mental Health Management, Inc. 1993 Stock Option Plan (incorporated by
         reference to the Company's Annual Report on Form 10-K for the fiscal
         year ended September 30, 1993, as amended)

    99.2 Amendment No. 1 to the Mental Health Management, Inc. 1993 Stock
         Option Plan

    99.3 Mental Health Management, Inc. 1993 Stock Option Plan for Non-Employee
         Directors (incorporated by reference to the Company's Annual Report of
         Form 10-K for the fiscal year ended September 30, 1993, as amended)

    99.4 Mental Health Management, Inc. Non-Employee Directors' Stock Option
         Plan

                                     II-3
Item 9.  UNDERTAKINGS

         The Company hereby undertakes:

              (1)  To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:

                     (i)     To include any prospectus required by Section
         10(a)(3) of the Securities Act of 1933, as amended;

                    (ii)     To reflect in the prospectus any facts or events
         arising after the effective date of this Registration Statement (or
         the most recent post-effective amendment thereof) which, individually
         or in the aggregate, represent a fundamental change in the information
         set forth in this Registration Statement.  Notwithstanding the
         foregoing, any increase or decrease in the volume of securities
         offered (if the total dollar value of securities offered would not
         exceed that which was registered) and any deviation from the low or
         high end of the estimated maximum offering range may be reflected in
         the form of prospectus filed with the Commission pursuant to Rule
         424(b) if, in the aggregate, the changes in volume and price represent
         no more than a 20% change in the maximum aggregate offering price set
         forth in the "Calculation of Registration Fee" table in the effective
         Registration Statement.

                   (iii)     To include any material information with respect
         to the plan of distribution not previously disclosed in this
         Registration Statement or any material change in such information in
         this Registration Statement;

                 Provided, however, that paragraphs (1)(i) and (1)(ii) do not
         apply if the information required to be included in a post-effective
         amendment by those paragraphs is contained in periodic reports filed
         with or furnished to the Commission by the Company pursuant to Section
         13 or Section 15(d) of the Securities Exchange Act of 1934, as
         amended, that are incorporated by reference in this Registration
         Statement.

              (2)  That, for the purpose of determining any liability under the
    Securities Act of 1933, as amended, each such post-effective amendment
    shall be deemed to be a new registration statement relating to the
    securities offered therein, and the offering of such securities at that
    time shall be deemed to be the initial bona fide offering thereof.

              (3)  To remove from any registration by means of a post-effective
    amendment any of the securities being registered which remain unsold at the
    termination of the offering.

         The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, as amended, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended,

                                     II-4
that is incorporated by reference in this Registration Statement shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

         Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended, and is, therefore,
unenforceable.  In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933, as amended, and will be governed by the
final adjudication of such issue.

                                    II-5
SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as 
amended, the Company certifies that it has reasonable grounds to believe that 
it meets all of the requirements for filing on Form S-8 and has duly caused 
this Registration Statement to be signed on its behalf by the undersigned, 
thereunto duly authorized in the County of Fairfax, Commonwealth of Virginia, 
on the date below:

Dated:   July 25, 1996                 MHM Services, Inc.

                             By:  /s/ Michael S. Pinkert
                                  ----------------------------------------------
                                  Michael S. Pinkert, President
                                  and Chief Executive Officer

                             By:  /s/ Carolyn Zimmerman
                                 ----------------------------------------------
                                  Carolyn Zimmerman
                                  Vice President and
                                  Chief Financial Officer

                               POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael S. Pinkert, as true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign the
Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.

Signature                        Title                                Date
- ---------                        -----                                ----

/s/ Michael S. Pinkert      President, Chief Executive Officer,   July 25, 1996
- ------------------------    and Director
Michael S. Pinkert

/s/ Carolyn Zimmerman       Vice President and                    July 25, 1996
- ------------------------    Chief Financial Officer
Carolyn Zimmerman

/s/ Abraham D. Gosman       Director                              July 25, 1996
- ------------------------
Abraham D. Gosman

/s/ Kenneth A. Kessler      Director                              July 25, 1996
- ------------------------
Kenneth A. Kessler, M.D.

/s/ H. Scott Miller         Director                              July 25, 1996
- ------------------------
Scott Miller

/s/ Michael F. Sandler      Director                              July 25, 1996
- ------------------------
Michael F. Sandler
EXHIBIT INDEX

EXHIBIT NO.                       DESCRIPTION                               PAGE
- -----------                       -----------                               ----

    4.1  Specimen copy of Common Stock Certificate (incorporated by
         reference to the Company's Registration Statement on Form 8-B,
         filed with the Commission by the Company on January 27, 1995 (by
         which the Company succeeded to a Registration Statement on Form
         10, filed with the Commission on August 19, 1993))

    4.2  The Company's Restated Certificate of Incorporation (incorporated
         by reference to the Company's Annual Report on Form 10-K for the
         fiscal year ended September 30, 1995, as amended)

    4.3  The Company's Amended Bylaws (incorporated by reference to the
         Company's Annual Report on Form 10-K for the fiscal year ended
         September 30, 1995, as amended)

    5    Opinion of Ballard Spahr Andrews & Ingersoll

    23.1 Consent of Deloitte & Touche LLP

    23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5)

    24   Power of Attorney (included on signature page)

    99.1 Mental Health Management, Inc. 1993 Stock Option Plan
         (incorporated by reference to the Company's Annual Report on Form
         10-K for the fiscal year ended September 30, 1993, as amended)

    99.2 Amendment No. 1 to the Mental Health Management, Inc. 1993 Stock
         Option Plan

    99.3 Mental Health Management, Inc. 1993 Stock Option Plan for
         Non-Employee Directors (incorporated by reference to the
         Company's Annual Report of Form 10-K for the fiscal year
         ended September 30, 1993, as amended)

    99.4 Mental Health Management, Inc. Non-Employee Directors' Stock
         Option Plan