So Medicare policy has implications that extend beyond the 41 million beneficiaries.

Defenders argue that it's less idiotic than the current Medicare policy of subsidizing physician training, which has exacerbated the surplus.

And the officials said they would change Medicare policy so patients in similar circumstances could get such information.

But some executives say HealthSouth's billing practice was not consistent with Medicare policy.

The winners include hospitals in Texas and California, two states with powerful House members who have a large say on Medicare policy.

None of those suggested that they had resolved their disagreements over political strategy and Medicare policy.

Or will it lead to a revision in Medicare policy so that affluent people pay for more of such services out of their own pockets?

Beyond the question of how to allocate the budget cuts, Congress faces huge debates over Medicare policy.

The customers at issue include 125,000 New Yorkers who have Medicare supplemental policies and 21,000 individuals covered by hospital insurance.

Many hospitals are already under pressure to scale back those programs, and the new Medicare policy will hasten that trend, the officials said.