By Criwinr Russell and Charles R Babcock -hsw#- Tlte Reagan administration yesterday warned the natton's hospitals that they 034 lose govern. mcnt tintds if they deny food or treatment UI new- born Infants with birth defwta. The wamirp Iran the Health and Human Ser. vices Dtpanment--considered a novel appliation ol a federal law prohibiting discrimination againu the handlapped-hollowed axnplaim by `right- tdiie' groups and a recent directive from Pras- ident Flagan The deputmenr in a notica to nearly 7.WO hapitals, cited -heightened public concern about hs adquacy d medical treatment of newborn infants with birth defecu' HHS Secretary Rii S. Schweiker noted tbe recent nrciond publicity surrounding tbe death of a hby boar dtb Ihm'r syndrome in Blooming- ton. hi. The parents d -Baby Doe- asked that food be withheld and refused to authorize tmt- ment to co~eet a life-threatening defti assnciat- ed with the disorder. which caw menul retar- darbth in addition. an HHS spokesman said that the department thii week sent an investigator. 10 Cnrvford Memorial Hapital in Robinson Ill. (o check a complaint by national and Ical `right-to- life- grnups that surgical treatment is being with. held Cmm a bshy horn with a serious binh defact knwn as spinal bifida Tk breadth of yesterday's warning surpriwd hospitals and medical gnwpa whtxe spokclmen esprewd concern about potential interference in the pmctice oi medicine and the legality d using law to protect the handicapped for this purpuse. Croups npresentirq the handicapped wel- mmed the administration's intaresf but said it didn'l jihe with Reagan's plans to mt Maral ti- namial aid to the handicapped and to weaken the regulations hat already protect them. In its twqagc letter to hocpiti that-nxeive Medicaid or Medicwe funds. HHS Ofice for Gil Righu said that the gwemntent will apply S&on 504 of the Rehabilitation Act d 1973 to cesm imdvittg he medii an d infant. with birth defecta and will consider `termination of federal as&awe- to institutiom that do not corn- ply. It mid that it is `unlawful' for hmpit& to richhold fmm handicapped infants food or med- ial or surgical treatment rquired to correct a life-threatening condition. if tb handicap `dces tmc render the tmtment or nuriitional susIc- medically amtmindiatad.' The notice also warned that hospital, -should Rkkrd S Scbreiker acted mat case d-Baby Doa" not aid a decision. by tba inlant*s parenta . . . to withhold tmtment or nourishment discriminato- rilv C allwing the infant to remain in the insti. tug and said that hnrpitals will also be held cesponsibh IN tk %xtduct o(ph~Giuu.- Betty IA ibuon. director d HHS' Office for Ciiil Rights. acknowledged yesterday tbat al. though the rehabiiiotion law has heen on the hrnks since 193. this appanntlv is the first time it has been applied to the m&al tmtment of handicapped children. To the best d our kndedge. it ha not hren used in this manner.' she said. Justice Department sPIkesman John W&on said civil riahb Isur?,rs rhere -are rwearchinp the law- but haw I& yel cnncluded what legal actions an k taken. `We've never been confronld vith this behe. Thii is nod- Miihael Bromberg. d the Federation ol Amer- ican Hce.pit&. quationad the legality d the new HHS effort. saying he had never heard of apply- ing tk 304' rqulatiom to `patient ewe or med- ical traatmen~- He said that tbe hrradth of the HHS letter could Ynrce a flood ol court cases- because d ?remmdous legal cunlliit between what this notice is truing to do and pareneal and phyGcian authnrity.' A statement by the American Hospital Asso-. ciation c&d the HHS letter a `simpiiitic solution co complex situations involved in health care de-. hey and charged tht it could `create an adver- &al relationship hew-em hospital and parenu ??? o o?? *?? ?? ???? ????o????? ??????? ???? furmed on these children' Paul Mar&and. director nf gwemmenral af-1 fairs for tk Association for Retarded Citizens. ssid >zsterday that gmups representing the dis- abled haw been meeting regularty to try to devel- Y op a pnctical solution for tmtiq handicapped. infanu But he said he +ved the governmenti : action pnterday with some skepticism. l-here is: irony here and we're trying to use the pmident's * memo aa a positive s+ twm caIling df the doas on .W- !&rchar.d noted thet the pmident's a&n `ie- the tint and only positive ection [Reezan has U- ken1 for the disabled since he hpr set foot in the White House.' He cited what he termed -asurm- no&al- budget cuu for pnynm s fnr the hand- icappedi and cflom by Justice and the Office and Management and Budget to rewrite the Section 5&l rsgubtit~ The extent to which HHS plans UJ en&we its warning is not .yet clear. Down said t' st the let-; .ter was intended as a -reminder- to hospitals and: that the department will fnllori up ,n spccttic. cumplainta, such u the I;linois caw. Gary Curran. a consulmt to tk Amerian Life' Lobby. emphasiied that `notification b nnt: enough to make sure these t&a lives are wed. There L gning to haw to be rhomuch surveillance. hr compliinct with thex lai\r and vigorous pm. ecutiun il they are violated.' BUL one outside medical snurce sugznvd that the n&e to hospitals was apparently regarded within HHS as'more a public nbcion$ mow than anything else.' In the lllinnir caw. Carltnn King. administmtor ; of Cmwfnrd Memorial Hwpital. said he couldn't comment on the specifics. Qor he added. -Every infant is getting tisimum rare. WC wooid never deny treatment In snl; ptient.'