Brief descriptions of the processes and organizations involved in the programs of Medicaid and Aid for Families with Dependent Children (AFDC) are provided in Part I, including summaries of the basic aspects of AFDC and Medicaid costs, beneficiaries, funding, administration, major fraud and abuse problems, and control responsibilities. An analysis of the nature and extent of fraud and abuse in AFDC and Medicaid programs indicates that no data systems exist which specifically measure fraud, but the 'client errors' identified by quality control systems indicate that misrepresentations by recipients amount to many millions of overpaid dollars annually. While no similar data exist on Medicaid provider fraud and abuse, insiders in welfare agencies believe its scale far exceeds losses due to recipient fraud. In Part II, case studies of fraud control programs for AFDC recipients and Medicaid providers are portrayed for Illinois, Colorado, and Washington. In Part III, fraud control is viewed from the perspectives of recipients, providers, program administrators, and control agencies. Overall, fraud control efforts are considered limited. Procedures for improving fraud control include focusing priorities, targeting resources, focusing responsibilities for fraud control, and developing alternative sanctions. Helpful information and incentive systems strategies are also described. Tabular data and 19 references are provided, and administrative information and methodology are appended.
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