JACKSON - Memorial Hospital at Gulfport reached a settlement with the state in its federal lawsuit over Mississippi's Medicaid program, state officials said Tuesday.

Attorney General Mike Moore negotiated the settlement, accepting $13 million of the $21 million that the state Division of Medicaid contended the hospital should have put up to draw federal matching dollars in 2000.

Under the state's rules, hospitals that serve a disproportionate share of Medicaid recipients put up their own money in order to attract federal dollars.

The hospital failed to put up the money in 2000 after a dispute with the state over its share of federal Medicaid money in 1999.

"When it's all said and done, I think it's a win-win situation for the Gulfport Memorial Hospital and the state Division of Medicaid," Moore said Monday. "I was pleased with the way it worked out."

Hospital officials could not be reached for comment late Monday afternoon, after Gov. Ronnie Musgrove announced the settlement.

When the hospital filed the suit last month, Musgrove said it jeopardized the entire Medicaid system in the state by indefinitely tying up in court money needed now for programs.

The governor and legislators already are perplexed over how to meet a $148 million Medicaid deficit this year, as well as funding the program in the future.

Musgrove said he orchestrated meetings between Ford, Lt. Gov. Amy Tuck, House Speaker Tim Ford and legislators, Harrison County officials and the Mississippi Hospital Association to help bridge the disagreement between the hospital and the state.

"I am pleased we were able to come to an agreement that assures continued access to health care on the Gulf Coast for those who need it most," Musgrove said.