A new federal program to permit Medicare patients to use a hospice instead of a hospital when they have a terminal illness hasn't gone into effect, but Office of Management and Budget Director David A. Stockman has told leading members of Congress that he wants tough curbs to make sure it doesn't cost the government more money.

Reps. Willis D. Gradison Jr. (R-Ohio) and Leon E. Panetta (D-Calif.) said Stockman told them that he now believes the hospice program will cost the government money instead of saving it.

Gradison said Stockman estimated that instead of saving Medicare $55 million over the next three years the new program would cost $350 million over the next three years under one set of assumptions and as much as $800 million under another.

Although Stockman made no formal proposals, they said he wants to "cap" the number of eligible patients (31,000 the first year, rising to 40,000 over the next two), lower the per-case payment for most of them to less than the $6,500 Congress now wants to pay and limit the number of organizations that can qualify under the law as hospices.

"I said it was not acceptable," said Panetta, who sponsored the legislation that authorized the new program.

"I'm opposed to any new legislation . . . that would limit the number of individuals that would benefit," Gradison said.

Under the hospice program, people with terminal illnesses can choose to stay home for the last six months that they are expected to live, instead of continuing to receive treatment in hospitals on the chance they might live.

The patients receive a range of home health services financed by Medicare and supervised by a hospice organization. The government saves money because home care costs less.

Stockman's new cost estimates, one source said, were based on the assumption that, even if a person chose hospice services, certain hospital services still would be needed, wiping out other savings.

Panetta said the reaction to Stockman's proposals by about a half dozen House members at the meeting was "very cool. Congress has expressed itself . . . , and there is no need to go back and redo all the legislation."