In response to public concern over several fatal rest home fires in recent years, the Health and Human Services Department has proposed withholding funds for the elderly from states that fail to enforce safety standards for the homes.

The plan would leave most of the regulatory responsibility to the states, which in 1976 were required by Congress to develop their own boarding home standards. It would provide states with technical, but not financial, assistance.

The plan would allow the federal government to punish states that don't enforce their standards by withholding some funds under the Older American Act, which provides money for such programs as nutrition and transportation for the elderly. HHS said the criteria for withholding funds and the amount have not yet been determined.

"We're pleased that HHS has taken action to increase its oversight over boarding homes to force states to enforce safety standards, although there are a few details that need further consideration," said Barbara Frank, a boarding home care expert with the National Citizens Coalition for Nursing Home Reform.

HHS has the authority to proceed immediately on most of the provisions, although it must go through the rule-making process on the proposal to withhold Older American Act funds.

The HHS plan will affect an estimated 30,000 so-called board and care homes, or rest homes, which, unlike nursing homes, do not provide extensive medical services. Boarding home standards are, as a rule, less strict than those for nursing homes.

Over the years, the federal government has been reluctant to get involved in regulating both boarding and nursing homes, traditionally viewed as state and local concerns.

But boarding home fires and reports of substandard living conditions led Congress in 1976 to adopt the so-called Keys Amendment, which required states to license and regulate boarding homes.

Congress, however, failed to provide funds to help states enforce their standards. It also gave HHS only one weapon to enforce the standards: withholding of Supplemental Security Income benefits, a sanction that was criticized because it tended to hurt the beneficiary, not the homes or the states.

Meanwhile, dangerous conditions persisted, and over the next five years 143 persons were killed in 14 boarding home fires. Two fires occurred in 1979 in Washington. One, at an unlicensed home for mental out-patients on Lamont Street NW, resulted in the deaths of 10 women, and the other, at the Roosevelt for Senior Citizens, caused the death of an elderly man.

Lawrence Lane, director for policy of the American Association of Homes for the Aging, called the HHS proposal a step in the right direction. But he noted that there is no provision for financial aid to states, calling this "a significant problem" and one of the major deficiencies in the 1976 program.

Other points in the plan include:

* Providing the National Bureau of Standards with $400,000 this year to complete the development of fire standards for board and care homes, to serve as model guidelines for states.

* Creating an information clearing house on boarding home practices and research projects.

* Establishing an office to focus and coordinate board and care activities within HHS.

* Developing a model state statute to help states improve theirs.

* Requiring boarding homes to prove that they comply with state standards to receive the SSI payments of their tenants directly.

* Requiring states to prove that they are enforcing their boarding home standards before they can use Medicaid funds for boarding homes.