We present the implementation of the indications for surgery for three surgical operations--cholecystectomy, cataract extraction, and knee arthroscopy--in a medical expert system, called Iliad. This implementation operates in the preauthorization service of IHC Health Plans (an insurance company in Salt Lake City) as a basis for reimbursement of services. Patient data collection forms, derived from Iliad knowledge base, were used by 13 participating surgeons to document the objective patient observations that justify the surgery and, then were faxed to IHC where a trained nurse input the data in Iliad. Iliad's decisions and reports on any deviations from guidelines are communicated back to the care provider. The study evaluates the impact of the computerized implementation on process, as measured by a questionnaire, and on outcome as measured by rate of approvals, documentation level, rate of requests, and average cost. The prospective implementation of the computerized guidelines has performed reliably, has been perceived as a preferred alternative to the old preauthorization system, and, most importantly, has enhanced significantly the level of documentation permitting evaluation and determination of appropriateness before surgery.