The panel that awarded $3 million to James L. Kline of Hagerstown in a medical malpractice case Wednesday changed its mind yesterday and reduced the award to $2 million.

Panel chairman Myron Wolowitz, a Rockville lawyer, said he and the other two panel members spoke over the telephone yesterday morning and agreed to reduce the judgment, which was the largest medical malpractice award in Maryland history. The $2 million total now equals the previous largest award.

Wolowitz refused to give a reason for the decision, saying only that "there was some confusion at the time, and in light of that confusion the panel thought it best to reconsider." He would not describe the nature of the confusion.

John Hull, another member of the three-member panel, which considered the case under Maryland's Health Claims Arbitration Act, said Wolowitz phoned him and suggested he reconsider the award because the panel had made a mistake in computing the award's two components: the known and anticipated costs of the injury plus the cost of pain and suffering. Hull would not describe the mistake, saying merely that it was not a computational error.

Jonathan Schochor, an attorney for Kline, said he had never heard of such a reduction of an award "ever being done before. I never heard of any panel doing it." He said action contesting the panel's action is being considered.

Kline has been confined to bed at the Washington County Hospital in Hagerstown since May 1978 when he received a radiation overdose during treatment for prostate cancer. As a result of the overdose, Kline's buttocks were burned away and his right hip was destroyed, according to testimony before the panel.