Progress in fulfilling the Bureau's goal of recovering $20 million in improper Medicaid provider claims is detailed, along with common abusive or fraudulent practices of clinics and hospital outpatient departments and computer techniques used to detect irregularities. In investigating criminal and civil fraud in the Medicaid program, the Bureau has obtained 82 convictions since its inception in April 1977. The Bureau has also continued to take administrative actions to disqualify or suspend Medicaid providers engaged in unacceptable practices from the program. The advantages of new computerized accounting and provider tracking systems are discussed. Other activities have involved cooperative projects with the Medicaid Management Information System and the Division of Medical Assistance to minimize opportunities for fraud and abuse. Provisions of proposed amendments to law and Department of Social Services regulations are summarized which will strengthen the Department's capabilities to investigate and sanction fraud. Finally, the Bureau's participation in civil proceedings is described. The appendixes contain a graph showing restitution for fiscal year 1977-78 and a chart of actual and projected tasks for the Bureau's first operating year. For other periodic reports, see NCJ 69681 and 69682.