ALBANY — It took only one day for a truce between Governor Spitzer and the hospital industry to crumble, as both sides eagerly resumed hostilities in the battle over Medicaid spending.

Two major hospital interest groups went back to the airwaves, resuming attack ads denouncing Mr. Spitzer’s efforts to slice about $1 billion in state and federal aid from hospital and nursing home budgets.

The groups, the Greater New York Hospital Association and 1199 SEIU United Healthcare Workers East, were preparing to deploy tens of thousands of employees and executives for a rally this afternoon in front of the governor’s 40th Street office in Manhattan. Hospital officials said they expected the Reverend Al Sharpton, who has been among the sharpest critics of Mr. Spitzer’s health care plan, to headline the protest.

Mr. Spitzer vowed to fight back with another volley of television ads of his own, and disparaged the hospital groups with aggressive rhetoric. “Those who care about bricks and mortar — the CEOs of the hospitals who are earning $5.9 million — they’re not with me,” Mr. Spitzer said at a press conference. “They are the ones who are financing these ads. I would say to the CEOs of the hospitals, you are doing a disservice to the public of the state of New York.”

The governor ordered hospital executives to immediately “distance themselves from this false, misleading campaign,” which he said represents the sort of politics that “has ripped the heart and soul of the state’s budget for too many years.”

After about three weeks of open warfare, the two sides entered into a truce that began on Tuesday. Top Democratic leaders, including the Assembly speaker, Sheldon Silver, and Rep. Charles Rangel, had encouraged Mr. Spitzer to give peace a chance and negotiate with the hospital lobby. The governor’s staff and hospital officials had a round of talks that both sides said were fruitless.

Yesterday, the association and the union declared an end to the truce and said they were resuming a campaign of advertising, mailings, and door-to-door canvassing that has been costing them about $2.5 million a week. “We are very troubled by the governor’s unwillingness to cool his rhetoric regarding our call to enact real reform,” the groups said in a statement.

“We thought we should continue to encourage the public to take our side,” a senior adviser to 1199 SEIU, Jennifer Cunningham, told The New York Sun.

Mindful of the governor’s high poll numbers, the groups began their campaign on February 22 with ads that took a soft approach by including praise and directing criticism more at HMOs than at the new administration. The ads grew more hostile and direct, with one featuring anguished nurses saying, “Our patients will suffer,” and “Why would he do that?”

Mr. Spitzer’s response campaign has been no less biting. In one ad, the camera pans over rows of infants crying in a maternity ward. The announcer talks about Mr. Spitzer’s “patients first” Medicaid plan, and the babies stop crying. The last line stings: “And the only people crying about that are the usual special interests.”

It’s not clear how much of an impact the ads have had on Mr. Spitzer’s approval rating, which has hovered in the mid-70s since he took office. Hospital officials say their own polling shows the ads have knocked down his popularity by 20 points, but no major independent polling institute has come out with fresh numbers.

The outcome of the battle could have a major effect on Mr. Spitzer’s first-term agenda. During his campaign, Mr. Spitzer said he would challenge the primacy of special interest groups. The hospital lobby, however, has been one of the few interest groups that have clashed with the governor, who made a strategic decision to restrict his early battles to the arena of Medicaid.

If Mr. Spitzer yields to the groups’ demands in a final budget agreement by restoring all of the money he cut in his executive budget, other interest groups could take away the lesson that it’s more profitable to fight the governor than to submit to his plans.

Mr. Spitzer in his budget proposed to slash hospital and nursing home funding by more than $900 million, primarily by temporarily freezing fee-for-service Medicaid reimbursement rate adjustments, reducing state subsidies for intern training, and reenacting a two-year-old .35% gross receipts tax that was supposed to sunset this year.

The governor also is seeking to redistribute more than $400 million in “worker retention and training” funding to hospitals that serve a high-volume of Medicaid patients, altering a funding scheme that had been the basis of Governor Pataki’s multibillion-dollar deal with the hospital union in 2002.

Despite the cuts, Mr. Spitzer is proposing to increase federal and state Medicaid spending by $1 billion, to $47.6 billion, which equals about 40% of the total $120 billion budget. Hospital and union officials say Mr. Spitzer’s budget would push financially weak hospitals over the edge and point out that hospitals are already losing money on Medicaid patients.

Spitzer administration officials say hospitals are losing money often because of poor management decisions, and they point out that some hospitals with a high concentration of Medicaid patients — such as Maimonides Medical Center in Brooklyn — are performing well.
The Republican Senate, whose weakened majority relies on support from the hospital industry, eliminated all of Mr. Spitzer’s cuts in its one-house budget released this week, provoking a furious reaction from the governor. Assembly Democrats, who appeared to have repaired their relationship with Mr. Spitzer since the blow-up over the comptroller selection, restored about half of the cuts.

Ms. Cunningham said she was “shocked” by Mr. Silver’s decision not to restore more money.