The co-occurrence of mental illness and chronic medical conditions represents a formidable and escalating public health challenge. Patients with these comorbidities experience a synergistic burden of illness, leading to poorer clinical outcomes, reduced quality of life, and significantly increased mortality compared to those with either condition alone. Traditional healthcare systems, historically fragmented into separate silos for physical and mental health, are fundamentally ill-equipped to manage this complex patient population, resulting in care that is inefficient, costly, and often iatrogenic. This comprehensive review synthesizes the current evidence on integrated care models as the superior standard of care for this population. We first examine the profound epidemiological scale and bidirectional pathophysiology of comorbidity, exploring the shared biological mechanisms, including systemic inflammation and hypothalamic-pituitary-adrenal (HPA) axis dysregulation, that link mind and body. We then delineate the severe clinical and economic consequences of fragmented care, including the staggering mortality gap and the pervasive problem of polypharmacy. Subsequently, we outline the foundational components of effective integrated care, such as patient-centered planning, measurement-based care, and comprehensive medication management. A critical analysis of evidence-based models including the Collaborative Care Model (CoCM), the Primary Care Behavioral Health (PCBH) model, and Assertive Community Treatment (ACT) is presented, highlighting their distinct applications across a continuum of patient acuity. Finally, we address key implementation challenges and future directions, emphasizing the critical roles of technology, policy reform, and the transition to value-based payment models. The evidence overwhelmingly indicates that a systemic shift toward integrated, whole-person care is not merely an option but a clinical and fiscal imperative.