ZOB Controller described a loss of separation event claiming the AIT/FLASH THRU procedure currently utilized needs to be revised to prevent future similar type events.

Narrative

Aircraft X was handed off from JXN Sector to DET Sector. DET Sector approved climbing to FL260 using the 'Interim Altitude/FLASH THRU' procedure. JXN Sector climbed Aircraft X to FL260 and as required by in house AIT procedures to keep the aircraft on JXN frequency while waiting for ZAU PMM Sector to accept the hand-off. Conflict Alert activated with Aircraft Y at FL270. Targets appeared to have merged. JXN Sector was unaware and unable to advise Aircraft X of merging target/traffic as JXN altitude filter limits restrict JXN from 'seeing' Limited Data Blocks 3000 FT above sector vertical limits. When Conflict Alert activated; the incident was already past. Merging target procedures; as required by the 7110.65; was not followed due to AIT/FLASH-THRU procedure. Recommendation; an amendment to AIT/FLASH-THRU should read 'if the aircraft is leaving the vertical limits of controller A airspace and Controller C has not accepted the hand-off; Controller A shall transfer communications to controller B.' This will insure merging target procedures by requiring the controller/sector in communications with the aircraft is monitoring all traffic within the vertical limits of the aircraft.