The Clinton administration yesterday proposed restoring some of the cuts in Medicare compensation made two years ago to hospitals, nursing homes and other health care providers who have complained the reductions were unfairly deep.

The cuts were part of the 1997 balanced-budget agreement between Congress and the White House that sought to trim billions of dollars from the government's main health insurance program for the elderly and disabled. The cuts hit politically potent industries--including teaching hospitals and nursing homes--that have lobbied vigorously to undo some of the damage.

Congress has taken steps to steer more funds back to the health care providers, and yesterday Clinton added his own proposals.

"As with any major legislation, the Balanced Budget Act included some policies that are flawed or have had unintended consequences that are posing immediate problems to some providers and beneficiaries," Clinton said in a letter yesterday to Sen. William V. Roth Jr. (R-Del.), chairman of the Finance Committee.

The president said his administration is taking 25 actions to mitigate some of the budget cuts imposed on the health care industry. White House aides said the relief would easily exceed $1 billion, but they offered no total estimate.

Some of the relief is targeted for hospital outpatient departments that were hit with a 5.7 percent reduction in Medicare compensation in the 1997 budget deal.

"We believe the congressional intent was for this policy to be implemented in a way that is budget-neutral for hospitals," the White House said in a memo yesterday, meaning the cuts should have been compensated in some other area of hospital payments. "The administration favors a policy that achieves this goal," said the memo, which outlined several means of new compensation, such as paying for "blood and blood products" in surgical procedures.

Last week, Rep. Bill Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee, proposed spreading $15 billion over the next five years among numerous health care industries that have complained about the 1997 cuts.

Roth, meanwhile, has outlined a separate plan that would help the same segments of the health care industry in slightly different ways.

Chris Jennings, a White House aide on health matters, said, "on this particular issue, Republicans and Democrats on the Hill are working collaboratively with the administration."

In her New York Senate race, Hillary Rodham Clinton has campaigned to restore most of the Medicare payments to teaching hospitals that were cut in the 1997 legislation. A White House aide said yesterday that administration officials were "well aware" of the first lady's position on the issue, but they were unaware of any direct role by her in yesterday's announcement.