Several such challenges have been filed by Medicaid patients in Tennessee and other states.

But the effect was to discriminate against Medicaid patients, which violates state health rules, she said.

Stanford reported losses of $200 a day this summer on Medicaid patients.

Meanwhile, areas with high levels of Medicaid patients or the uninsured are often ignored.

As in the past, he said, Medicaid patients will still be assigned to the semiprivate rooms on the seventh floor.

I've been here 11 years," she said, "and before this managed care started, no one wanted Medicaid patients.

Oregon's annual spending per Medicaid patient, $3,800 in 1994, is more than 10 percent below the national average.

On average, Medicaid patients spent $1,172 more than uninsured patients.

Talks also foundered on a bill to save money by limiting the drugs given to Medicaid patients.

Federal and state agencies spent a total of $3.4 billion for doctors' services to Medicaid patients in 1989.