MICHIGAN RECOGNIZED THE NEED TO BALANCE THE CONFLICT BETWEEN KEEPING PROVIDER PARTICIPATION AT A MAXIMUM WHILE INTENSIFYING EFFORTS TO ELIMINATE INAPPROPRIATE PAYMENTS. TO DO THIS, IT HAS BEEN USING A MMIS, A PROTOTYPE FOR HEW'S MMIS. THE SYSTEM USES STATE-OF-THE-ART ENTRY AND DATA PROCESSING TECHNIQUES TO RAPIDLY AND ACCURATELY PROCESS HUGE VOLUMES OF CLAIMS (PROMPT PAYMENT PROMOTES PROVIDER ACCEPTANCE OF THE SYSTEM). THE CLAIM PAYMENT SYSTEM CONSISTS OF NEARLY 400 CHECKS OR EDITS WHICH VALIDATE CLAIM DATA, VERIFY PROVIDER AND RECIPIENT ELIGIBILITY, DETERMINE PROPER LEVELS OF PAYMENT, AND CRITICALLY COMPARE CURRENT VALUES TO THOSE PREVIOUSLY SUBMITTED TO PREVENT DUPLICATE BILLING AND PROVIDE INDICATIONS OF POSSIBLE OVERUTILIZATION OR ABUSE. AGGREGATE DATA ARE USED TO PRODUCE PROFILES AND CREATE MODEL PREPAYMENT SCREENS. ALLEGATIONS OF ABUSE MAY ORIGINATE FROM INDIVIDUALS, PROVIDERS, OR OTHER AGENCIES. A REVIEW COMMITTEE, CONSISTING OF VARIOUS AGENCIES, SUBMITS ALL SUSPICIOUS CASES TO THE ATTORNEY GENERAL. IN MORE FLAGRANT CASES, A FIELD AUDIT IS CONDUCTED BY THE MEDICAID RECOVERY UNIT. PEER EVALUATIONS OF A DOCTOR'S PRACTICES ARE USED IN THOSE CASES HINTING OF OVERUTILIZATION. THE MICHIGAN PROGRAM HAS UNDOUBTEDLY PREVENTED ABUSE, LED TO RECOVERY OF UNSUBSTANTIATED PAYMENTS, AND DETERRED DOCTORS FROM BECOMING OFFENDERS. YET WITH THE INCREASING EXPERIENCE AND SOPHISTICATION OF PROGRAM EFFORTS CAME A CORRESPONDING INCREASE IN THE SOPHISTICATION OF PROVIDERS. MOREOVER, A SHIFT FROM DETECTION AND RECOVERY TO INVESTIGATION OF FRAUD AND PROSECUTION HAS INCREASED TIME FOR CASE RESOLUTION. JUDGMENT OF LEGITIMATE MEDICAL PRACTICE CONTINUES TO BE DIFFICULT. FINALLY, ADMINISTRATIVE SANCTIONS FOR THOSE PROVIDERS WHO HAVE OFFENDED IN EXCESS MUST BE FURTHER DEVELOPED. (MHP)