SENATOR MOSS INTRODUCED THE HEARINGS BY DESCRIBING HIS EXPERIENCES POSING AS A MEDICAID PATIENT IN NEW YORK CITY CLINICS. SEVERAL SENATORS MADE STATEMENTS WHICH EMPHASIZED THE NEED FOR LEGISLATIVE AND ADMINISTRATIVE REFORM TO HALT FRAUDULENT PRACTICES WHICH ARE COSTLY TO THE TAXPAYER AND WHICH EXPLOIT THE POOR AND ELDERLY. THE ASSOCIATE COUNSEL FOR THE COMMITTEE ON AGING DESCRIBED THE METHODS USED IN THEIR INVESTIGATIONS, WHICH INCLUDED RESEARCHING RECORDS, INTERVIEWS, QUESTIONNAIRES SENT TO PHYSICIANS RECEIVING SUBSTANTIAL MEDICAID PAYMENTS, POSING AS MEDICAID PATIENTS, AND MONITORING A CHICAGO MEDICAID MILL. ADDITIONAL INFORMATION ON THE FINANCIAL OPERATIONS OF MEDICAID MILLS WAS COLLECTED BY STAFF MEMBERS POSING AS BUSINESSMEN INTERESTED IN BUYING MEDICAID FACILITIES. THE INVESTIGATION CONCLUDED THAT THE MAJORITY OF THE PROFITS FROM MEDICAID MILLS WENT TO BUSINESSMEN, NOT PRACTITIONERS, AND THAT MOST CLIENTS PROVIDED SUBSTANDARD MEDICAL CARE. DOLLAR ESTIMATES CONCERNING THE COSTS TO MEDICAID PROGRAMS OF FRAUDULENT PRACTICES BY MEDICAID MILLS WERE DETAILED. INDIVIDUALS WHO PARTICIPATED IN THE COMMITTEE'S INVESTIGATION TESTIFIED ABOUT THEIR EXPERIENCES WHILE POSING AS MEDICAID PATIENTS. A NEW YORK DOCTOR TESTIFIED IN REGARD TO HIS OBSERVATIONS OF ADMINISTRATORS AND PHYSICIANS IN A NEW YORK MEDICAID CLINIC. MOREOVER, NEW JERSEY'S INVESTIGATION OF PRACTITIONERS RECEIVING MEDICAID FUNDS CONCENTRATED ON MEDICAID CLINICS, FINDING ABUSES SIMILAR TO THOSE FOUND BY THE SENATE COMMITTEE STAFF. THE NEW JERSEY REPORT INCLUDED RECOMMENDATIONS FOR DETECTING ABUSES, SUCH AS INCREASING THE USE OF AGENT AND COMPUTERS. THE TEXT OF NEW JERSEY'S INVESTIGATIVE REPORT IS INCLUDED IN THE APPENDIX, ALONG WITH CORRESPONDENCE BETWEEN SENATOR MOSS AND MEDICAL SCHOOL DEANS, AND LETTERS FROM CONCERNED CITIZENS AND ORGANIZATIONS. (MJW)