The U.S. government has launched a four-year, $1 billion program to pay some of the emergency room costs of treating illegal immigrants, but it has backed off plans to require hospitals to ask patients about their immigration status.

The new money is part of the 2003 Medicare act and became available Friday, the start of the fiscal year.

Hospitals welcomed the funds, because they are often stuck with the bill for caring for uninsured people, including many unauthorized immigrants. But the program had become mired in controversy because of the proposed rule that hospitals determine which of their patients were in the country illegally.

"Hospitals are in the business of taking care of patients, not posing as cops for other agencies," said Dawn Marks, a spokeswoman for the Maryland Hospital Association, one of many medical and immigrant organizations that had concerns about the proposal.

The program will provide up to $167,000 annually for each of the next four years for hospitals in the District, $1.33 million for Maryland hospitals and $2.25 million for those in Virginia.

The new federal aid reflects the dilemmas faced by officials and institutions in dealing with the nation's growing population of illegal immigrants, believed to number 8 million or more. Hospitals are required to treat anyone in need of emergency medical attention, but many illegal immigrants lack insurance. The cost of providing them with health care has become severe for some medical facilities, especially those in southern border states.

To address that issue, Sen. Jon Kyl (R-Ariz.) pushed to include the new $1 billion in funds in the Medicare bill.

The federal Centers for Medicare and Medicaid Services, which would administer the money, recently issued the proposed regulations that would have required hospitals to identify the illegal immigrants receiving health care. Their goal, they said, was to ensure that the funds were being spent properly.

But numerous hospitals balked, saying patients might stop going to medical facilities for fear that their immigration information would find its way into the hands of law enforcement officials.

"What you don't want is people not seeking care when they really need it. That endangers the health of all of us -- people running around with infectious diseases and so on," said Bill Moss, president of Potomac Hospital in Woodbridge.

Mark B. McClellan, administrator of the Medicare centers, said in a letter to some hospitals Friday that there was so much criticism of the regulations that officials instead would come up with a new "indirect" method to determine reimbursement.

"Providers will not be asked -- and should not ask -- about a patient's citizenship status in order to receive payment under this program," he said.

Although hospitals praised the change, it was criticized by some politicians and advocates for lower immigration.

"Who's watching out for the American people? This is incredible. You've got the hospitals watching out for the illegal immigrants and the administration going along with it," said Rep. Dana Rohrabacher (R-Calif.), who had fought to require hospitals to collect information on undocumented patients and make it available to law enforcement officials.

"The real solution is stopping illegal immigration -- not letting it happen, then trying to clean up the mess afterwards," said Mark Krikorian of the Center for Immigration Studies, which favors tighter immigration enforcement.

Officials at several hospitals and hospital associations in the Washington area said they have no idea what the local facilities spend each year caring for illegal immigrants because patients generally are not asked about their status. But they said the new federal money will represent only a small share of what the institutions spend on "charity cases," a category that consists of the poor and the uninsured and includes both citizens and noncitizens.

For example, Holy Cross Hospital in Silver Spring shouldered about $6.3 million in unreimbursed costs this year for charity cases, spokesman Mike Hall said.

Robert A. Malson, president of the District of Columbia Hospital Association, said the positive thing about the new program is that it shows that the government recognizes the obligations of hospitals to treat people regardless of their income or status.

"The difficulty, from our perspective, is that the allocation for D.C. is woeful," he said.