THE MMIS PROGRAM WAS DESIGNED BY THE FEDERAL GOVERNMENT TO HELP STATES ADMINISTER THEIR MEDICAID PROGRAMS. FOLLOWING A TASK FORCE RECOMMENDATION AND RESEARCH USING A PROTOTYPE INSTALLATION, FEDERAL REGULATIONS WERE ENACTED IN 1972 PROVIDING 90 PERCENT FEDERAL FUNDING FOR INSTALLING MMIS SYSTEMS AND 75 PERCENT FUNDING FOR OPERATIONS. TABLES CONTAIN DATA ON THE STATUS OF EXISTING AND PENDING MMIS SYSTEMS AND 75 PERCENT FUNDING FOR OPERATIONS. TABLES CONTAIN DATA ON THE STATUS OF EXISTING AND PENDING MMIS PROGRAMS AND CONTRACTORS. A SEPARATE REFERENCE PAPER DETAILS THE DESIGN STRATEGY OF THE MMIS AS DEVELOPED BY HEW'S SOCIAL AND REHABILITATION SERVICE (SRS). THE MMIS CONTAINS 4 SUBSYSTEMS TO HANDLE DAILY OPERATIONS: RECIPIENT, WHICH COLLECTS AND VERIFIES ELIGIBILITY DATA; PROVIDER; CLAIMS PROCESSING; AND A REFERENCE FILE ON CHANGES OF PRACTITIONERS AND SUSPENDED CLAIMS. THE REMAINING TWO SUBSYSTEMS PROVIDE ADMINISTRATORS WITH INFORMATION ABOUT PROBLEMS AND PROGRESS. THEY INCLUDE THE SURVEILLANCE AND UTILIZATION REVIEW SUBSYSTEM (SUR) AND THE MANAGEMENT AND ADMINISTRATION REPORTING SUBSYSTEMS (MARS). BENEFITS TO STATES FROM MMIS INCLUDE MORE EFFECTIVE MEDICAID MANAGEMENT, IMPROVE QUALITY AND ACCESS TO CARE, IDENTIFICATION OF POSSIBLE FRAUD AND ABUSE, AND AVAILABILITY OF INFORMATION NEEDED FOR TIMELY AND ACCURATE REPORTS TO LEGISLATURES AND HEW. THE STATEMENT ALSO CONTAINS ADDITIONAL COMMENTS ON PERSONNEL AND REORGANIZATION PROBLEMS IN THE SRS AND RECENT EFFORTS TO CORRECT THESE DEFICIENCIES. IMPLEMENTATION OF MMIS AND COMPETITIVE PROCUREMENT PRACTICES ARE COVERED. ATTACHMENTS INCLUDE CORRESPONDENCE BETWEEN THE AUTHOR AND THE TEXAS DEPARTMENT OF PUBLIC WELFARE, MEMORANDA FROM AN HEW SUBORDINATE CHARGED BY SENATE INVESTIGATORS WITH IMPROPER CONDUCT, AND CORRESPONDENCE REGARDING BIDDING FOR AN MMIS IN WASHINGTON.