By next year, the state would cut payments again, to $500.

Medicare would cut payments to these labs by 20 percent.

A Republican working on the legislation said it would not actually cut payments to hospitals, just slow the rate of growth.

There have been Republican efforts to cut payments to doctors and hospitals, though not beneficiaries.

In 1985, they began to cut payments for monitoring immunization rates.

The company said Medicare had cut payments by 60 percent for occupational, speech and physical therapy.

Labor have since looked into reform for the scheme including cutting payments to injured workers.

Medicare will cut payments to doctors by 4 percent to 5 percent in each of the next six years, Bush administration officials say.

The Government, he said, would cut payments to some doctors and hospitals so it could redistribute the money to others.

It will also cut payments to doctors for "overpriced procedures."