SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  SCHEDULE 13D

                   Under the Securities Exchange Act of 1934*

                                (Amendment No. 1)

                         Magellan Health Services, Inc.
--------------------------------------------------------------------------------
                                (Name of Issuer)

                Ordinary Common Stock, par value $0.01 per share
--------------------------------------------------------------------------------
                         (Title of Class of Securities)

                                    559079207
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                      (CUSIP Number of Class of Securities)

                                 Daniel S. Loeb
                      Third Point Management Company L.L.C.
                         360 Madison Avenue, 24th Floor
                               New York, NY 10017
                                 (212) 224-7400
--------------------------------------------------------------------------------
                  (Name, Address and Telephone Number of Person
                Authorized to Receive Notices and Communications)

                                   Copies to:
                              Jack H. Nusbaum, Esq.
                          Willkie Farr & Gallagher LLP
                               787 Seventh Avenue
                             New York, NY 10019-6099
                                 (212) 728-8000

                                 August 17, 2004
--------------------------------------------------------------------------------
                          (Date of Event which Requires
                            Filing of this Schedule)

If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box: [ ]

NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 240.13d-7 for other
parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).




                                  SCHEDULE 13D

-------------------                                            -----------------
CUSIP No. 559079207                                            Page 2 of 8 Pages
-------------------                                            -----------------

----------- --------------------------------------------------------------------
    1       NAME OF REPORTING PERSON
            I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

            Daniel S. Loeb
----------- --------------------------------------------------------------------
    2       CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP             (a) [ ]
                                                                         (b) [X]

----------- --------------------------------------------------------------------
    3       SEC USE ONLY

----------- --------------------------------------------------------------------
    4       SOURCE OF FUNDS*

            AF
----------- --------------------------------------------------------------------
    5       CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
            PURSUANT TO ITEMS 2(d) or 2(e)                                   [ ]

----------- --------------------------------------------------------------------
    6       CITIZENSHIP OR PLACE OF ORGANIZATION

            United States
--------------------- --------- ------------------------------------------------
                         7      SOLE VOTING POWER

                                0
                      --------- ------------------------------------------------
NUMBER OF                8      SHARED VOTING POWER
SHARES
BENEFICIALLY                    2,338,790
OWNED BY              --------- ------------------------------------------------
EACH                     9      SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH                     0
                      --------- ------------------------------------------------
                         10     SHARED DISPOSITIVE POWER

                                2,338,790
----------- --------------------------------------------------------------------
    11      AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

            2,338,790
----------- --------------------------------------------------------------------
    12      CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
            SHARES*                                                          [ ]

----------- --------------------------------------------------------------------
    13      PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

            8.7%
----------- --------------------------------------------------------------------
    14      TYPE OF REPORTING PERSON*

            IN
----------- --------------------------------------------------------------------




                                  SCHEDULE 13D

-------------------                                            -----------------
CUSIP No. 559079207                                            Page 3 of 8 Pages
-------------------                                            -----------------

----------- --------------------------------------------------------------------
    1       NAME OF REPORTING PERSON
            I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

            Third Point Management Company L.L.C.               I.D. #13-3922602
----------- --------------------------------------------------------------------
    2       CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP             (a) [ ]
                                                                         (b) [X]

----------- --------------------------------------------------------------------
    3       SEC USE ONLY

----------- --------------------------------------------------------------------
    4       SOURCE OF FUNDS*

            AF
----------- --------------------------------------------------------------------
    5       CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
            PURSUANT TO ITEMS 2(d) or 2(e)                                   [ ]

----------- --------------------------------------------------------------------
    6       CITIZENSHIP OR PLACE OF ORGANIZATION

            Delaware
--------------------- --------- ------------------------------------------------
                         7      SOLE VOTING POWER

                                0
                      --------- ------------------------------------------------
NUMBER OF                8      SHARED VOTING POWER
SHARES
BENEFICIALLY                    2,338,790
OWNED BY              --------- ------------------------------------------------
EACH                     9      SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH                     0
                      --------- ------------------------------------------------
                         10     SHARED DISPOSITIVE POWER

                                2,338,790
----------- --------------------------------------------------------------------
    11      AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

            2,338,790
----------- --------------------------------------------------------------------
    12      CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
            SHARES*                                                          [ ]

----------- --------------------------------------------------------------------
    13      PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

            8.7%
----------- --------------------------------------------------------------------
    14      TYPE OF REPORTING PERSON*

            OO
----------- --------------------------------------------------------------------




     This Amendment No. 1 (this "Amendment No. 1") amends the Schedule 13D filed
on January 13, 2004 (the "Schedule 13D"), and is being filed on behalf of Third
Point Management Company L.L.C., a Delaware limited liability company (the
"Management Company"), and Daniel S. Loeb, an individual ("Mr. Loeb" and,
together with the Management Company, the "Reporting Persons"). This Amendment
No. 1 relates to the Ordinary Common Stock, par value $0.01 per share, of
Magellan Health Services, Inc., a Delaware corporation (the "Company"). Unless
the context otherwise requires, references herein to the "Common Stock" are to
such Ordinary Common Stock of the Company. The Management Company is the
investment manager or adviser to a variety of hedge funds and managed accounts
(such funds and accounts, collectively, the "Funds"). The Funds directly own the
Common Stock to which this Amendment No. 1 relates, and the Reporting Persons
may be deemed to have beneficial ownership over such Common Stock by virtue of
the authority granted to them by the Funds to vote and to dispose of the
securities held by the Funds, including the Common Stock. Capitalized terms used
herein and not otherwise defined have the meanings ascribed thereto in the
Schedule 13D.

Item 3. Source and Amount of Funds or Other Consideration.

     Item 3 of the Schedule 13D is hereby amended by deleting the entirety of
the text thereof and replacing it with the following:

     The Funds expended an aggregate of approximately $44,166,429 of their own
investment capital to acquire the 2,338,790 shares of Common Stock held by them
(the "Shares"). The Shares were acquired in exchange for certain bonds and
rights held by the Funds in connection with the Company's reorganization under
Chapter 11 of Title 11 of the United States Code.

     The Funds effect purchases of securities primarily through margin accounts
maintained for them with Bear, Stearns Securities Corp. which may extend margin
credit to the Funds as and when required to open or carry positions in the
margin accounts, subject to applicable Federal margin regulations, stock
exchange rules and the firm's credit policies. In such instances, the positions
held in the margin accounts are pledged as collateral security for the repayment
of debit balances in the accounts.

Item 4. Purpose of Transaction.

     Item 4 of the Schedule 13D is hereby amended by deleting the entirety of
the text thereof and replacing it with the following:


                                       4




     The purpose of the acquisition of the Shares by the Funds is for
investment. The Funds recently acquired 23,790 shares based on a distribution
from prior bond holdings with conversion rights to equity. The Reporting Persons
may cause the Funds to make further acquisitions of Common Stock from time to
time or to dispose of any or all of the shares of Common Stock held by the Funds
at any time.

     The Reporting Persons are engaged in the investment business. In pursuing
this business, the Reporting Persons analyze the operations, capital structure
and markets of companies, including the Company, on a continuous basis through
analysis of documentation and discussions with knowledgeable industry and market
observers and with representatives of such companies (often at the invitation of
management). From time to time, one or more of the Reporting Persons may hold
discussions with third parties or with management of such companies in which the
Reporting Person may suggest or take a position with respect to potential
changes in the operations, management or capital structure of such companies as
a means of enhancing shareholder value. Such suggestions or positions may relate
to one or more of the transactions specified in clauses (a) through (j) of Item
4 of Schedule 13D of the Exchange Act, including, without limitation, such
matters as disposing of or selling all or a portion of the company or acquiring
another company or business, changing operating or marketing strategies,
adopting or not adopting certain types of anti-takeover measures and
restructuring the company's capitalization or dividend policy.

     Except as set forth above, and in the Schedule 13D, the Reporting Persons
do not have any present plans or proposals that relate to or would result in any
of the actions required to be described in Item 4 of Schedule 13D. Each of the
Reporting Persons may, at any time, review or reconsider its position with
respect to the Company and formulate plans or proposals with respect to any of
such matters, but has no present intention of doing so.

Item 5. Interest in Securities of the Issuer.

     Item 5 of the Schedule 13D is hereby amended by deleting the entirety of
the text thereof and replacing it with the following:

     (a) As of the date of this Amendment No. 1, the Management Company
beneficially owns 2,338,790 shares of Common Stock. The Management Company
shares voting and dispositive power over such holdings with Mr. Loeb and with
the Funds. The Shares represent 8.7% of the approximate total of 26.9 million
shares of Common Stock outstanding as reported in the Company's Form 10-Q for
the period ended June 30, 2004. None of the individual Funds owns a


                                       5




number of shares of Common Stock equal to or greater than 5% of such total
Common Stock outstanding.

     (b) The Management Company and Mr. Loeb share voting and dispositive power
over the 2,338,790 shares of Common Stock held directly by the Funds.

     (c) Schedule A hereto sets forth certain information with respect to
transactions by the Funds, at the direction of the Reporting Persons, in the
Common Stock during the past sixty days.

     All of the transactions set forth on Schedule A were effected directly with
the Company as part of the Company's reorganization.

     Except as set forth above, since the filing of the Schedule 13D there were
no transactions in the Common Stock effected by the Reporting Persons, nor, to
the best of their knowledge, any of their directors, executive officers, general
partners or members.

     (d) Other than the Funds which directly hold the Shares, and except as set
forth in this Item 5, no person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the Shares.

     (e) Not applicable.

Item 7. Material to be Filed as Exhibits.

     1. Joint Filing Agreement, dated as of January 13, 2004, by and between the
Reporting Persons, incorporated herein by reference to Exhibit 1 of the Schedule
13D.


                                       6




                                   Schedule A
                                   ----------

                   (Transactions by the Funds in Common Stock
            during the sixty days prior to the date requiring filing)


----------------------- --------------- --------------------- ------------------
         Date             Transaction          Shares          Price Per Share
----------------------- --------------- -------------------- -------------------
      6/18/2004               BUY               2,800              32.9500
----------------------- --------------- -------------------- -------------------
      6/30/2004               BUY              30,050              33.5000
----------------------- --------------- -------------------- -------------------
      6/30/2004              SELL             (30,050)             33.5000
----------------------- --------------- -------------------- -------------------
       7/7/2004               BUY              17,200              31.9826
----------------------- --------------- -------------------- -------------------
       7/7/2004               BUY              15,000              31.7333
----------------------- --------------- -------------------- -------------------
      7/22/2004               BUY              20,000              30.0065
----------------------- --------------- -------------------- -------------------
      7/28/2004               BUY              10,000              29.4968
----------------------- --------------- -------------------- -------------------
      7/31/2004               BUY              31,900              33.7500
----------------------- --------------- -------------------- -------------------
      7/31/2004              SELL             (31,900)             33.7500
----------------------- --------------- -------------------- -------------------
      8/17/2004               BUY              23,790
----------------------- --------------- -------------------- -------------------




                                   SIGNATURES
                                   ----------

     After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.


Dated: August 20, 2004

                                        THIRD POINT MANAGEMENT
                                        COMPANY L.L.C.

                                        By: /s/ Daniel S. Loeb
                                            ------------------------------
                                            Name:  Daniel S. Loeb
                                            Title: Managing Member


                                        /s/ Daniel S. Loeb
                                        ------------------------------
                                        Daniel S. Loeb















               [SIGNATURE PAGE TO AMENDMENT NO. 1 TO SCHEDULE 13D
                                 WITH RESPECT TO
                         MAGELLAN HEALTH SERVICES, INC.]