The fight between hospital groups and Governor Paterson is on.

Hours after hospital groups publicized a new radio ad warning that budget cuts could force hospitals to close, the state’s health commissioner, Dr. Richard Daines, convened an impromptu conference call with reporters in which he dismissed the advertisement as a scare tactic and said hospitals could absorb more than $1 billion in Medicaid cuts proposed by Mr. Paterson. The health commissioner, a former president of St. Luke’s-Roosevelt Hospital in Manhattan, took aim at a financial analysis released by hospital groups that found hospitals would lose $974.1 million over two years if legislators enact the proposal.

“It certainly is a reduction in a rate of growth that they were expecting. As a percentage of their total revenue, it’s relatively small,” Dr. Daines said. “We think it’s something they can absorb.”

Dr. Daines said hospital closings and mergers recommended by a state health care commission, the Berger Commission, have boosted operating margins since 2006. “We have a much healthier hospital and health care industry,” he said. He cited NewYork-Presbyterian Hospital, which hospital groups said could lose $64.3 million in two years, and said the hospital could afford the cut, given its positive operating margin in 2007, which yielded $207 million.

But hospital groups challenged the commissioner’s statements, pointing out that hospital operating margins are razor-thin compared to hospitals nationwide.

“I think the commissioner has learned very quickly how to do the old Hudson River two-step,” a spokesman for the Healthcare Association of New York State, William Van Slyke, said. He said the average hospital operating margin was 0.7% in 2006, the first year New York hospitals reported a profit after suffering seven years of deficits. That slight rebound is “being used as a license to cut us back,” he said.

Legislators also expressed reservations. “The package that the governor put on the table does bring back memories of the old Pataki budgets,” the chairman of the Assembly’s health committee, Richard Gottfried, said.

Still, the rhetoric employed by hospitals and administration officials did not reach the caliber of a battle in 2007 between hospitals and Governor Spitzer. This time, even as hospitals are fighting Mr. Paterson’s proposal, they are working with him to urge Congress to supplement the state’s Medicaid program.

But a joint effort by the Greater New York Hospital Association and 1199 SEIU, the Healthcare Education Project, has about $50 million in a reserve fund that could be tapped to fight the cuts. Hours before the telephone news conference, the project publicized a 60-second radio spot that will air through August 19, when the Legislature convenes a special economic session.

According to officials at Montefiore Medical Center in the Bronx, where Medicaid and Medicare patients make up 75% of the hospital’s patient base, the proposed budget would mean losing $45 million over two years. Last year, Montefiore had an operating budget of $2.1 billion and reported a surplus of 2%.

“There is a tipping point, and we’re concerned,” the hospital’s chief financial officer, Joel Perlman, said. “You can’t continue to do the same thing with far less money.”