Included with the report is a letter from Mark McClellan, the Medicare administrator.

Dr. McClellan, the Medicare administrator, said his agency had received 4,600 requests from drug plans that wanted to change their formularies.

"In front of Congress, these guys are dead," he said of Medicare administrators.

Medicare administrators were taken aback by the price.

Some Federal health officials say one answer to Federal compensation questions may lie in a pilot program being developed by Medicare administrators.

Thomas A. Scully, the government's Medicare administrator, acknowledges that the health plans "are totally right to be wary."

Gail Wilensky, the Federal Medicaid and Medicare administrator, said officials were working on "a variety of strategies."

A critical issue was ensuring that Medicare administrators could not press directly for discounts.

Since the hospitals set list prices themselves, "there is room for playing games there," said Bruce Vladeck, a former Medicare administrator.

A national decision not to cover the implant would end the current practice of some local Medicare administrators to pay for it.