The chairman's opening statement emphasized that the sessions would highlight mechanisms by which an individual or organization can control all aspects of the delivery of home health care service through a tax exempt nonprofit agency while reaping subbstantial profits. Other committee members commented on the importance of home health care programs for the elderly and the need for better Government controls over reimbursements. The committee's chief investigator summarized the home health agency system administered by the Department of Health and Human Resources (HHS) and funded under Medicare. Representatives from the BGA then reviewed their 7-month study of the home health care industry, with particular attention to Illinois. These investigators found evidence of fraud and abuse through overbilling, payroll padding, and submitting fraudulent reports to the Government. Some home health operators siphoned Medicare dollars from nonprofit agencies they controlled through profitmaking firms they also controlled. Employees of a Chicago home health agency under investigation described how such frauds were accomplished. Causes of frauds and methods of correction were addressed by witnesses from the BGA, the General Accounting Office, the Association of Home Health Agencies, the American Federation of Home Health Agencies, and HHS. They discussed the effectiveness of trhe cost reimbursement system, the intermediary audit coverage, and the Home Care Financing Administration. Witnesses also commented on ways the Government could recover disallowances without hurting bona fide home health agencies and terminate irresponsible home health agencies from federally funded programs. Charts, exhibits illustrating fraudulent practices, and correspondence to the committee are included.