It included about half of the $1.1 billion in cuts to Medicaid expenses that Mr. Pataki sought.
Neither has the family taken the steps, entirely legal, to qualify Mr. Dillon for paid home care at Medicaid expense.
The federal government pays on average 57 percent of Medicaid expenses.
The state's Attorney General had sued the company over Medicaid expenses tied to treating people with diseases caused by cigarette smoking.
The state is seeking to recover billions of dollars in Medicaid expenses for treating smoking-related illnesses.
On average, Medicaid expenses rose 14 percent last year, more than double targeted estimates.
This year, Medicaid expenses will account for more than 100 percent of all county property taxes here.
The growth in Medicaid expenses has far outstripped inflation or the overall growth of city spending.
They also estimate that the move would cost the state $68 million in Medicaid expenses for unintended pregnancies by reducing birth control access.
Similarly, Medicaid expenses grew by 14 percent.