New York hospitals are turning to the federal government to offset Governor Paterson’s proposal to slash Medicaid spending by more $500 million this year and $1 billion next year.

Describing those cuts as untenable, hospitals are aiming for what they describe as a second federal economic stimulus package that would provide financial relief to states in the form of supplemental Medicaid funding. Currently, Medicaid financing is shared by states and the federal government, which pays a “federal Medicaid matching rate” determined by the state’s size and per capita income. Under a proposed relief measure, the federal government would temporarily increase the match rate by 2.95% for all states.
In New York, where the match rate is 50%, the supplemental funding would pump $1.8 billion into the state’s Medicaid coffers, hospital officials said.

“We are talking about astronomical relief,” the president of the Greater New York Hospital Association, Kenneth Raske, said. “It’s almost four times the amount of money they’re looking for in Medicaid cuts,” he said.

Mr. Raske and others described an infusion of federal dollars as an alternative to cutbacks they said would hurt the health care industry in New York by forcing hospitals to cut services. “We think it’s one of the potential revenue streams that we need to look at instead of making cuts and raising taxes,” a spokesman for the Healthcare Association of New York State, which represents hundreds of hospitals and nursing homes around the state, William Van Slyke, said. “It’s an infusion of dollars when we need it most.”

Lawmakers who have backed the proposal said Mr. Paterson’s emergency budget underscored the need for a stimulus package.

“The Medicaid cuts proposed by Governor Paterson demonstrate the urgent need for state fiscal relief,” according to Rep. Peter King, a Republican of Long Island who has become something of a point person for New York City’s agenda among Republicans on Capitol Hill. Mr. King is backing the supplemental Medicaid funding proposal, along with other lawmakers, including Rep. John Dingell, a Democrat of Michigan who is influential as chairman of the House Commerce Committee; Rep. Frank Pallone, a Democrat of New Jersey, and Rep. Tom Reynolds, a Republican of New York.

In 2003, Congress enacted a similar measure that temporarily raised the Medicaid match rate by 2.95% at a cost of $20 billion. An aide to Mr. King said the current proposal could cost $13 billion. The “immediate infusion” of cash to alleviate Medicaid expenditures is also expected to result in $224 million of business activity in New York, and it would create 1,900 jobs and generate $77.5 million in wages, an aide to Mr. King said.

Along with governors from other states, Mr. Paterson has expressed support for the measure. In a letter sent last month to federal lawmakers, including the speaker of the House, Nancy Pelosi, Mr. Paterson urged them to consider relief measures including supplemental Medicaid funding at a time when “states are facing increasing demands and costs for programs such as Medicaid while simultaneously attempting to balance already strained budgets.”

New York’s state health commissioner, Dr. Richard Daines, said New York’s federal Medicaid match rate is among the lowest. “We feel that we’ve been under-supported from the federal government on that for a long time,” Dr. Daines said, adding that an increase would provide more breathing room in the overall state budget.

State budget officials said that supplemental funding from the federal government would not eliminate the need for the cuts proposed by Mr. Paterson this week to address the state’s $6.4 billion estimated budget gap. “We’re hopeful that we will receive additional funding from the federal government, but we would still need to address health care costs in New York State,” a spokesman for the budget division, Jeffrey Gordon, said.