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Description: During the past four years, the Legislature has approved significant increases in resources to combat fraud in the Medi-Cal Program. While these actions have resulted in increased savings and allowed the state to avoid some additional program costs, fraud remains a major concern in the Medi-Cal program. In this analysis, we explain the structure of the Department of Health Services' (DHS) antifraud program and how it compares to national models of fraud control in fee-for-service Medicare and Medicaid. We identify areas in which the DHS could be more effective in combating Medi-Cal fraud and offer recommendations as to how DHS could better manage and structure its antifraud efforts. We also review the Governor's 2004-05 budget proposals for expansion of antifraud efforts and recommend changes. Reduce Item 4260-001-0001 by $2,354,000.