RICHMOND -- The General Assembly is getting ready to cut Virginia's already bare-bones Medicaid health care program by limiting the number of drug prescriptions it will cover and possibly by reducing reimbursements for hospital stays from 21 days to 14 days.

While the legislature has put off until next year the hardest choices on an impending Medicaid funding crisis, the state Senate and the House of Delegates have amended the program in their respective budget bills to make cuts with relatively minor dollar values but with a potentially deep impact on thousands of Virginians.

"There will be a cutback in medically necessary care" for those affected by the amendments, said Jill A. Hanken, senior staff attorney at the Virginia Poverty Law Center.

Public attention has been focused during this year's legislative session on a bitter brawl between Gov. Gerald L. Baliles' administration and the state's influential hospital industry over ways to find more money for Medicaid, the joint state and federal program that is the core health care program for the poor.

The industry managed to kill an administration proposal to impose fees on hospitals and nursing homes as one major source of new funds. Instead, the General Assembly is considering a one-year freeze on new nursing home beds and hospital services as a stop-gap measure until next year, when members have promised to look at longer-term solutions.

In the meantime, one or both houses quietly approved changes that would save money on drugs and hospital services, while raising physicians' fees and adding coverage for foster children.

In part, the proposed cutbacks seem geared to putting more pressure on the health care industry to take seriously its role in finding a long-term solution to the Medicaid funding problem.

"We've had a pass or two at the hospitals, also the pharmacists," said state Sen. Dudley J. (Buzz) Emick Jr. (D-Botetourt), chairman of the Senate Finance subcommittee on human resources, during the budget debate on the Senate floor. He pushed, unsuccessfully, for a cutback on funding for new nursing home beds, which he said would bring that industry "to the bargaining table."

Both the House and Senate included in the budget a limit of six prescriptions a month, a ceiling that will affect an estimated 7,000 clients, or 2 percent of the Medicaid population. The change, to take effect in the second year of fiscal 1988-90, is expected to save the state $1.9 million.

"The savings {of the proposed prescription limit}, compared to the hardship and the great potential that these clients would move to the expensive hospital setting, are not meaningful," stated a report issued last month by the Virginia Department of Medical Assistance Services, which administers the state's Medicaid program.

The Senate version of the budget includes a new reimbursement limit of 14 days per hospital stay, except for recipients under the age of 21, starting in July 1989. Since the House version does not include the change, it will be considered in a joint House-Senate conference committee that will meet within the next two weeks.

The revision would be expected to save the state $2.7 million in the second year of the biennium for its share of Medicaid costs, with the federal government able to save a like amount. State officials estimated that a 14-day limit could affect nearly 2,500 clients a year, or about 7 percent of Medicaid recipients who are hospitalized.

Hanken said the change would mean that hospitals would have a choice between releasing Medicaid patients "quicker and sicker" or absorbing the losses of uncompensated care for the indigent.

Hospitals also would have to swallow reductions in payments for outpatient services and for reimbursements of capital costs, under other Senate amendments estimated to save the state $4.7 million in the second year.

Laurens Sartoris, executive vice president of the Virginia Hospital Association, said hospitals would have to charge higher rates to private, paying patients if Medicaid lowered its reimbursements. As it is, current Medicaid reimbursements equal only about 70 cents on the dollar of a hospital's actual cost for treating a patient, he said.

Since the changes would not take effect until the second year of the biennium, however, the industry still would have next year to persuade the General Assembly to change its mind, Sartoris said.

The largest increase to the Medicaid budget being contemplated is a rise in physicians' fees paid by the program. The Senate approved a raise, to take effect in 1990, at an annual cost of $5.4 million. Doctors have argued that current reimbursement rates do not cover their overhead in treating Medicaid patients.

Both houses also added coverage of children in foster care, while the House voted to expand coverage of prenatal care services to high-risk pregnant women.

Baliles' proposed Medicaid budget for fiscal 1988-90 included $146 million in added state funds just to keep even on currently covered basic services. As it is, Virginia's program is one of the sparest in the country, state officials acknowledge.

In other parts of the human resources budget, both houses added funds for foster care programs, care of people with Alzheimer's disease, and for increased salaries at the Northern Virginia Training Center, a facility for mentally retarded people that has experienced high staff turnover.

The Senate cut $1 million from a proposed $13 million in the governor's budget for child day care for low-income working families.

The Senate did find, and approved by a separate vote, another $1 million to add to a budgeted $4.4 million for renovation of the Confederate Museum of Richmond.