THE AREAS FOR WHICH STANDARDS WERE DEVELOPED ARE EPSDT (ELDERLY AND PERIODIC SCREENING DIAGNOSIS TESTING), THIRD PARTY COLLECTIONS, ERRONEOUS PAYMENTS, PROVIDER PARTICIPATION, AND PROVIDER FRAUD AND ABUSE. DISCUSSION PROVIDES INSIGHT INTO SUCH CONSIDERATIONS AS THE POTENTIAL OF THE PERFORMANCE STANDARD CONCEPT, THE GENERAL APPROACH UTILIZED IN DEVELOPING PERFORMANCE MEASURES, DEVELOPMENT OF THE STANDARD AND UPDATING OF THE STANDARD, AND POSSIBLE REWARD/PENALTY SCHEMES. THE REPORT ALSO REVIEWS ASSUMPTIONS BEHIND ANALYSES OF THE VARIOUS SCENARIOS; ACTUAL ANALYSES OF THESE SCENARIOS; AND PERFORMANCE MEASURE CONSIDERATION RELATED TO PROVIDER PARTICIPATION AND THE COMBINED PROGRAM AREAS OF ELIGIBILITY, THIRD PARTY, AND ERRONEOUS PAYMENTS. FOOTNOTES AND SEVEN TABLES ARE INCLUDED. APPENDIXES PROVIDE INFORMATION ON THE ORGANIZATION OF REGULATIONS ACCORDING TO EXTENT AND NATURE OF THE PROCESS SPECIFIED; DISCUSSION OF PROGRAM AREAS FOR THE USE OF PERFORMANCE MEASURES DEEMED LOW PRIORITY, INCLUDING QUALITY OF PROVIDER CARE, UTILIZATION CONTROL, PERIODIC MEDICAL/PROFESSIONAL REVIEW OF PATIENTS IN NURSING HOMES, FEDERAL REPORTING AND ACCESS TO STATE INFORMATION, REIMBURSEMENT TO PROVIDERS, FAMILY PLANNING, AND STERILIZATION; DETAILED CONSIDERATIONS FOR THE THIRD-PARTY REVIEW; AND DETAILED CONSIDERATIONS FOR THE ERRONEOUS PAYMENT REVIEW. (PRG)