It is not clear whether Mr. Cuomo will support any increase in hospital reimbursements.

All hospital reimbursement is regulated by New York State.

A month after the deal closed in June 1997, the federal government further cut hospital reimbursements.

"Had we not received it, our entire hospital reimbursement system could have been thrown into chaos."

The combination of premium hikes, competition and likely cuts in hospital reimbursement still will not hit $270 billion.

Yet insurers would still have the flexibility to negotiate physician fees, treatment practices and hospital reimbursement.

"Failure to act jeopardizes more than $1.2 billion in Federal money available to the state for hospital reimbursement."

Amid the stalemate, the Senate has linked negotiations over hospital reimbursement to talks on controlling the cost of workers' compensation insurance.

Costs are controlled by provincial governments, which negotiate physician fees and hospital reimbursement.

He could shake up the complicated system of hospital reimbursement, which links Medicaid to other hospital costs.