Another attempt to save Medicare money by substituting lower-priced community services for expensive institutional care has fallen prey to costly abuse.

The national health insurance program for the elderly and disabled says it will bar 80 community mental health centers in nine states from service after investigators found patients watching TV or playing games instead of getting psychiatric help."The intention was that but for this intensive psychiatric therapy the beneficiaries would have to be committed to an institution," said Medicare administrator Nancy-Ann DeParle. "You walk into these places and people are playing bingo and eating lunch."

Medicare has problems with abuse across the board. Government auditors estimate about 11 cents of every dollar spent by the program is wasted on error or fraud.

But new benefits offered in the 1990s with the goal of saving money, as well as improving patients' quality of life, by keeping them out of hospitals and nursing homes have proven particularly vulnerable to profiteers.

Last fall, after the Health and Human Services Department inspector general reported rampant abuse, the Clinton administration had to block any new home health care companies from joining Medicare for several months to get the problem under control. A similar report critical of community mental health centers is expected from the inspector general next week.

On Tuesday, Medicare sent letters to 20 community mental health centers in Florida, Texas and Louisiana, giving notice they no longer can participate. Letters will be sent to 60 more centers in a total of nine states - also including Alabama, Tennessee, Georgia, Mississippi, Arkansas and South Carolina - in the next few months.

The agency would not release the names of any centers until they had been notified.

At some of the mental health centers, as many as 90 percent of patients do not have serious enough mental illnesses to qualify for the special care, DeParle said. Those who do qualify are not getting the care they need and will be helped to find other places to go.

"There are beneficiaries who use this service who need it and we want to make sure we work with ... those beneficiaries and their families to make sure they have other options," DeParle said.