This document contains witness testimonies and prepared statements from the Congressional hearing called to examine problems in the partnership of Medicare and Health Maintenance Organizations (HMO's). Opening statements are included from committee chairman Claude Pepper and from Representative Lawrence J. Smith. Two panels of witnesses address the problems of HMO's and Medicare. Members of the first panel, consisting of attorneys from Legal Services of Greater Miami, Inc., and from the National Health Law Program, Inc., and a daughter of former HMO members, cite examples of problems encountered by clients and family members while trying to use HMO or Medicare services. Also testifying is the associate director of the Human Resources Division, General Accounting Office (GAO), who reports findings from the GAO investigation of the Health Care Financing Administration's (HCFA) oversight of four demonstration projects in Florida and recommends improvements in government management and oversight efforts. The second panel, presenting the Federal response to the GAO report, consists of three representatives from the Department of Health and Human Services: the administrator and a special assistant from the HCFA and the director of the Office of Health Maintenance Organizations. Problems discussed include processing time involved in enrollments and disenrollments of Medicare beneficiaries, the susceptibility to errors of the HCFA's system for coordinating payments to physicians and hospitals, and errors in claim payments. The appendices contain the GAO report, "Problems in Administering Medicare's Health Maintenanace Organization Demonstration Projects in Florida," and additional materials submitted for the record. (NRB)