Gov. Haley Barbour’s plan to pay for Medicaid violates state and federal laws, according to attorneys for nearly 40 hospitals.

The hospitals have not legally challenged the proposal that would increase their taxes, cut Medicaid reimbursements and replace the cuts with federal money associated with the health care program.

But they are exploring options in Hinds County Chancery Judge Patricia Wise’s court. Wise was asked Friday to keep alive a case that stopped Barbour’s previous plan to make deep cuts in Medicaid services until the agency provides more proof of why the reductions are needed.

The state wants Wise to dismiss the case, since Barbour withdrew that plan after her ruling. She did not make an immediate ruling.

John Sneed, an attorney for the hospitals, contends that the governor’s new plan is “a thinly veiled attempt” to fund the shortfall through a method that another judge said violated state law.

Barbour has said his plan is allowed under the previous ruling.

Medicaid serves almost 600,000 low-income Mississippi residents and faces an annual shortfall of about $90 million.

Barbour, who oversees Medicaid, said his plan ends a monthslong battle with lawmakers over the proper funding source. A special legislative session ended last week with no resolution between Senate leaders who sided with him on a hospital tax and House Democrats who preferred including a tobacco tax hike.

Lawmakers have used one-time money as a past funding solution. Under Barbour’s plan, hospitals bear the burden of filling the $90 million hole. The governor contends it will not result in higher costs to patients.

Barbour said that without the plan, he’ll have to cut the Medicaid budget. State law gives a governor authority to make cuts when Medicaid faces a deficit, but House Democrats say cuts are unnecessary now and have not been made previously in Barbour’s administration.

Officials with the Mississippi Hospital Association said the plan concerns them because it usually takes a year for hospitals to be repaid with federal money.