With the closure of a number of provincial psychiatric hospitals planned, the Ministry of Health of Ontario has commissioned a series of planning projects to identify alternative placements for current hospital patients. The goal is to match need to care in the least restrictive setting. A systematic, clinically driven planning process was implemented that involved three steps: development of a continuum of levels of care representing increasingly intensive and more restrictive supports, development of criteria and decision rules for placement, and comprehensive needs assessment of current patients using the Colorado Client Assessment Record. Results showed that only 10% of current inpatients need to remain in the hospital, and over 60% could live independently in the community with appropriate supports. Evidence supports concurrent validity of the planning model, but further work is needed to assess whether recommended levels of care effectively meet consumer needs in the least restrictive setting.