She said the Legislature's role would be largely in allowing the Governor to force the counties, which administer Medicaid locally, to establish mandatory managed-care programs.

But several states have adopted DRG's for administering Medicaid, the joint Federal and state health care program for poor people.

"We still have to have our offices on the reservations in order to administer Medicaid and food stamps," she said.

"You'll find us pushing forward pretty aggressively," said Thomas A. Scully, who administers Medicare and Medicaid, although he added that no final budget decisions have been made.

Now, the Health Care Financing Administration, which administers Medicare and Medicaid, is planning to switch long-term centers to the diagnosis-based payment system.

However, IDPA retains most of the responsibility for administering Medicaid.

He also called for 67 more social service workers for to administer Medicaid, child support, housing and children's and family-services programs.

Albany would assume responsibility for administering Medicaid.

As part of the plan, the District would seek to transfer some services, like administering Medicaid and running a prison in Lorton, Va., to the Federal Government.

The Health Department runs the trust fund, while Human Services administers Medicaid.