SENATOR CHILES SUMMARIZED THE FINDINGS AND CONCLUSIONS OF AN INVESTIGATION INTO THE HEALTH CARE INDUSTRY IN FLORIDA THAT HAD BEEN UNDERTAKEN BY THE GOVERNMENTAL AFFAIRS COMMITTEE OF FEDERAL SPENDING PRACTICES. THIS STUDY FOUND THAT ABUSES OF MEDICARE PAYMENTS AND FRAUD WERE WIDESPREAD AMONG PRIVATE HOME HEALTH CARE AGENCIES, WHICH WERE UNEVENLY REGULATED. THE SECRETARY OF THE CALIFORNIA HEALTH AND WELFARE AGENCY TESTIFIED CONCERNING CALIFORNIA'S PROGRAMS TO INVESTIGATE HEALTH CARE SERVICES. AUDITORS FROM THE STATE AUDITOR GENERAL'S OFFICE, THE STATE JOINT LEGISLATIVE AUDIT COMMITTEE, AND THE HEW AUDIT AGENCY ALL CRITICIZED THE HOMEMAKER/CHORE PROGRAM AS BEING MISMANAGED BY THE STATE AND SUBJECT TO FEW GUIDELINES AND REGULATIONS. HOWEVER, A REPRESENTATIVE FROM THE CALIFORNIA DEPARTMENT OF HEALTH CLAIMED THAT SOME OF THE AUDITORS' ALLEGATIONS WERE INACCURATE. A FORMER EMPLOYEE OF HOME CARE, INC., A CALIFORNIA BASED COMPANY, TESTIFIED THAT ITS OFFICERS HAD TRIED TO USE POLITICAL INFLUENCE TO OBTAIN A CONTRACT FOR HOME CARE SERVICES FROM ILLINOIS. THESE ALLEGATIONS WERE DENIED IN A DETAILED STATEMENT BY THE PRESIDENT OF HOME CARE, INC. TESTIMONY OFFERED BY THE DIRECTOR OF HEW'S BUREAU OF HEALTH INSURANCE MADE SPECIFIC LEGISLATIVE AND ADMINISTRATIVE RECOMMENDATIONS TO REGULATE HOME HEALTH CARE AGENCIES. THE COMMITTEE DISCUSSED PROBLEMS IN PROSECUTING FRAUD WHICH ARE DUE TO A LENIENT ATTITUDE BY THE PUBLIC AND LAW ENFORCEMENT AGENCIES TOWARD WHITE-COLLAR CRIME, AS EVIDENCED BY THE TESTIMONY OF A FORMER EMPLOYEE OF THE BUREAU OF HEALTH INSURANCE CONCERNING MEDICARE FRAUD CASES. THE APPENDIXES CONTAIN INVESTIGATIVE MATERIALS RELATING TO HOME CARE, INC., DETAILED REPORTS ON CALIFORNIA'S HOMEMAKER/CHORE PROGRAM, AND RELATED MATERIAL. (MJM)