A federal judge in Dallas ruled yesterday that a hospital receiving federal Medicare and Medicaid payments is subject to federal civil rights laws.

In his decision, U.S. District Court Judge Robert M. Hill also ordered the suspension of all future Medicare and Medicaid payments to Baylor University Medical Center until it cooperates with a Health and Human Services Department investigation of an alleged civil rights violation.

Baylor, which receives approximately $30 million in federal assistance annually, according to court documents (university officials refused comment on the exact amount), has asked that its funds not be cut off pending appeal.

The Justice Department sued Baylor at HHS's request. HHS had attempted to investigate a deaf woman's complaint that Baylor denied her access to a sign-language interpreter hired at her own expense, but Baylor refused investigators access to its files.

The decision in the Baylor case is considered significant by civil rights organizations. They say there is a parallel between Medicaid assistance to hospitals and other forms of federal assistance to colleges and universities.

The Baylor decision may also strengthen the legal justification for a forthcoming new version of the controversial "Baby Doe" rule.

This rule requires hospitals to provide the same care for handicapped newborns that they would give a non-handicapped infant and institutes a hotline for reporting when care is being withheld.

The original Baby Doe rule was voided on procedural grounds. A task force of Justice and HHS officials has been drafting a new one.

The rule and the suit against Baylor were both based on the Rehabilitation Act of 1973, prohibiting discrimination against the handicapped by institutions receiving federal financial assistance.