The objective of this review by the Dept. of Health and Human Services (HHS) Office of Inspector General was to estimate the extent of FY 2000 fee-for-service Medicare payments that did not comply with Medicare laws and regulations. Based on HHS¿s statistical sample, HHS estimates that improper Medicare benefit payments made during FY 2000 totaled $11.9 billion, or about 6.8% of the $173.6 billion in processed fee-for-service payments reported by the Health Care Financing Admin. (HCFA). As in past years, these improper payments could range from inadvertent mistakes to outright fraud and abuse. HHS recommendations address the need for HCFA to sustain its efforts in reducing improper payments. Tables and graphs.