The report states that HCFA should improve communication to Medicare of information on providers terminated from Medicaid for improper activities, should assure that each region makes scheduled reviews of State efforts to control Medicaid fraud and abuse, and should improve DHEW assistance to Illinois' efforts to identify potential Medicaid fraud providers. The report notes that substantial progress has been made since GAO's earlier review on identifying suspected Medicaid fraud and abuse in Illinois. Illinois has also improved its Medicaid Claims Processing System but has been slow to make other suggested improvements. It is recommended that the DHEW Secretary direct the Administrator of HCFA to require that Medicare and Medicaid exchange information on terminated providers and that each HEW regional office review State efforts to control fraud and abuse. In addition, DHEW should make sure that Illinois routinely reviews current information on all major provider groups and reviews the feasibility of coordinating Medicaid fraud and abuse investigations with State licensing agencies to determine if providers' medical licenses should be revoked. DHEW should also assist Illinois in implementing fully a Medicaid Management Information System. Appendixes contain the request for followup on the Illinois Medicaid program by Senator Percy and Stevenson of Illinois and principal DHEW officials responsible for administering activities discussed in this report.