Hospital officials in Virginia and the District say they expect a new Supreme Court decision on Medicaid payments to help shrink the widening rift between what it costs private hospitals to care for poor patients and what the government reimburses them for that care.

"For the first time in five years the issue will be heard on its merits," said Bruce Rueben, senior vice president of the Virginia Hospital Association, the plantiff in the Supreme Court case.

If the hospital association is successful in its suit, which asks a federal judge in Richmond to increase Virginia's Medicaid reimbursements, "it will help ease the pressure on hospitals . . . a burden that has been subsidized by private paying patients," he said.

On Thursday, the Supreme Court gave hospitals and nursing homes the right to sue their states in federal court for failing to reimburse them at reasonable levels for caring for Medicaid patients. Nine similar suits are pending in federal and state courts across the country.

The ruling is not expected to have much effect on hospitals in Maryland, which has a unique system for handling the cost of medical care for the poor.

In 1981, Congress gave individual states the right to decide how to reimburse hospitals for the care of Medicaid patients. Each state has its own repayment formula, but the federal government, which pays half of the expense, requires states to provide "reasonable and adequate" reimbursement to hospitals that operate "economically and efficiently."

Hospital and trade association officials said the court's decision will give them an important bargaining chip -- the threat of a lawsuit -- with which to negotiate increased reimbursements from the states.

"It will get parties to the negotiating table and hammering out" agreements, said Larry S. Gage, president of the National Association of Public Hospitals.

"If not, we will consider legal action," said John Green, executive vice president for Medlantic Healthcare Group, which owns Washington Hospital Center, National Rehabilitation Hospital and Capitol Hill Hospital in the District.

State officials say hospitals already are being paid enough.

"We absolutely believe we are appropriately reimbursing hospitals," said Bruce Kozlowski, director of the Virginia agency that administers Medicaid. He called the ruling "a bonanza for attorneys" because of the "initial plethora of suits" that will be filed by hospitals.

Howard M. Cullum, Virginia's secretary of health and human services, said "I don't believe we'll negotiate" with the hospital association over increased reimbursements. He said the state attorney general's office is "preparing to go forward" with trying the lawsuit.

Virginia will spend $1.3 billion in the 1991 budget year to care for the estimated 500,000 Medicaid patients in the state.

The District spent $105 million in reimbursement to the city's hospitals in budget year 1989 for treating more than 18,000 Medicaid inpatients, according to program director Lee Partridge.

Hospitals in the District and Virginia have had to shoulder a greater amount of unreimbursed costs as hospital expenses and the number of indigents who cannot pay have risen.

In 1982, for example, private acute-care hospitals in Virginia spent $2.3 million more than they were paid by Medicaid for caring for indigent patients, according to the hospital association. By 1990, the difference grew to $52.5 million.

Fairfax Hospital, the largest hospital in Northern Virginia, received an estimated 36 cents in state reimbursements for every dollar it spent on caring for Medicaid patients in the first five months of 1990, said hospital spokeswoman Jane Welch. At Arlington Hospital, a facility that served nearly 15,000 people last year, the difference has amounted to $1 million a year.

Hospitals say that increasing Medicaid reimbursements could help hold down health care costs for paying patients, who have been subsidizing the cost of indigent care. Increasing the state's contribution "would minimize {cost} increases to other paying patients," said Arlington Hospital spokeswoman Margery Huge.

In the District, where some hospitals have attributed recent layoffs and other cutbacks to the high cost of caring for poor patients, officials said the court's ruling has the potential to reduce, though not eliminate, the financial problems threatening their institutions.

"Even if the Medicaid program was better funded, that is only one step in the right direction," said Tom W. Chapman, president of Greater Southeast Community Hospital.

In addition to higher reimbursements to cover the 110,000 District residents eligible for Medicaid, Chapman said, hospitals need reasonable compensation for treating the city's 114,000 uninsured residents.

During 1989, Washington Hospital Center treated 3,300 Medicaid inpatients at a cost of $25 million, but received only $18 million in Medicaid reimbursement, hospital spokesman Clare Fiore said.

Greater Southeast, which treated 3,700 Medicaid patients during its most recent budget year, expects to lose $2.7 million on their treatment, Chapman said. Medicaid losses for the previous year were $720,000, he said.

At Howard University Hospital, where 280 employees will be laid off starting July 5 to stem hospital losses for unreimbursed care, officials welcomed the Supreme Court ruling but warned that it won't solve all their problems.

"This may help slow down more layoffs," said Russell Miller, vice president for health affairs, "but the ruling itself is only one piece of a jigsaw puzzle."

Miller said the hospital lost $6 million during its most recent budget year on Medicaid patients, including 5,000 Medicaid inpatients and more than 30,000 Medicaid outpatients. It lost an additional $6 million on care for boarder patients, many of them babies and elderly people, who were either uninsured or whose coverage ran out, he said.

In Maryland, Medicaid reimbursement is not much of an issue for hospitals, because rates at each hospital are set by a state commission. Every patient who receives a lab test, for example, at any hospital in the state is charged the same amount, regardless of whether the bill will be paid by commercial insurance, Medicaid or the patient. The system effectively spreads the cost of indigent care among all hospitals in the state.

Maryland's system was created in the 1970s to prevent the financial collapse of several inner-city hospitals in Baltimore. The hospitals were inundated with indigent patients, and Medicaid was not providing sufficient reimbursement for their care.

Maryland spends $1.2 billion a year on treatment for 343,000 Medicaid recipients.

Staff writers Donald P. Baker and Susan Schmidt contributed to this report.