IN HIS OPENING REMARKS, SENATOR MOSS NOTED THAT FRAUDULENT PRACTICES DEPRIVED RECIPIENTS OF 10 PERCENT OF ALL MEDICAID FUNDS. HE ALSO RELEASED A REPORT FROM THE GOVERNMENT ACCOUNTING OFFICE (GAO) AUDIT OF NURSING HOMES IN NEW YORK, CALIFORNIA, MISSOURI, MICHIGAN, AND FLORIDA WHICH UNCOVERED ABUSES OF PATIENTS' FUNDS. A REPRESENTATIVE FROM THE U.S. ATTORNEY'S OFFICE IN NEW YORK TESTIFIED ON EFFORTS TO INVESTIGATE AND PROSECUTE CASES OF MEDICAID FRAUD. ALTHOUGH MANY TYPES OF ABUSES WERE UNCOVERED, INVESTIGATIONS CONCENTRATED ON PROVING THAT SERVICES WHICH CLINICS CLAIMED THEY HAD PROVIDED WERE IN FACT NEVER RENDERED. THE WITNESS EMPHASIZED THE NEED FOR MORE TRAINED INVESTIGATORS, STIFFER PENALTIES FOR FRAUD, AND THE INCREASED ROLE OF COMPUTERS IN ANALYZING THE LARGE VOLUME OF CLAIMS SUBMITTED TO MEDICAID PROGRAMS. THE WITNESS WAS QUESTIONED ABOUT THE ROLE OF NEW YORK MEDICAL SOCIETIES, NEW YORK CITY'S RECORDKEEPING PROCESSES, AND FISCAL PROBLEMS IN THE STATE WHICH INHIBIT INVESTIGATIONS. TWO DOCTORS WHO HAD PLEADED GUILTY TO MEDICAL FRAUD INDICTMENTS IN NEW YORK CITY TESTIFIED ON METHODS OF DEFRAUDING MEDICAID PROGRAMS AND PROGRAM AREAS WHICH ENCOURAGE ABUSE. TESTIMONY FROM A PHYSICIAN WHO HAD WORKED IN A HARLEM CLINIC DESCRIBED THE PRACTICE OF 'PING PONGING,' IN WHICH A PATIENT WITH A SPECIFIC AILMENT IS ROUTINELY SENT TO EVERY SPECIALIST IN THE CLINIC, AND THEN MEDICAID IS CHARGED FOR SEVERAL TREATMENTS INSTEAD OF ONE. THE APPENDIX CONTAINS THE GAO AUDIT REPORT, THE AUDIT OF THE HARLEM CLINIC, THE COMMITTEE'S APPLICATION TO THE DISTRICT ATTORNEY OF NEW YORK CITY TO REVIEW GRAND JURY MINUTES, AND THREE SENTENCING MEMORANDA ON CASES OF MEDICAID FRAUD IN THE U.S. DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK. (MJM)