Under a directive from the Governor of New York, the Bureau was created within the Department of Social Services and given the responsibility of detecting and investigating unacceptable practices by providers in the Medicaid program. The Bureau's investigations can lead to administrative action or civil or criminal preparatory legal action. Although the Department of Social Services administers the Medicaid program, the fraud and abuse program previously had been conducted by the Department of Health. Initial efforts to staff the new department with investigators, auditors, attorneys, medical personnel, and managers with computer expertise are detailed, along with organizational structure and staff composition of the New York City operation and three regional offices. New procedures for hearings in which a provider may contest the Bureau's charges are discussed. The report on operating procedures includes the case tracking system and computer programs used to detect aberrant medical practices. Accomplishments during the first 4 months are listed, such as collection of computerized data on all New York City ambulatory care providers for 4 and one-half years and over $6 million in restitutions generated by the Bureau. Statistics on completed investigations, indictments, convictions, hearings, and audits are provided. The appendixes contain organizational charts, a schedule of actual and projected tasks, and a graph showing actual and projected restitutions. For subsequent quarterly reports, see NCJ 69683 and 69682.