OKLAHOMA CITY — Oklahoma would probably stop paying for kidney dialysis treatments, prescription drugs and medical equipment like wheelchairs for low-income residents if the state has to cut health care costs by 10 percent to address its budget deficit, according to the agency that oversees Oklahoma's Medicaid program.

The state expects to face a $600 million shortfall during its 2011-12 fiscal year, an amount that is close to 10 percent of the Oklahoma budget. In preparation for budget hearings, legislative leaders have directed state agencies to prepare plans that would reduce their costs by 5 percent to 10 percent.

Nico Gomez, a spokesman for the Oklahoma Health Care Authority, said the agency would have to target health services that are not legally required by the federal Medicaid program. Those include dialysis for adult kidney patients, dental care, prescription drugs, medical equipment, such as oxygen for respiratory patients, and treatment for the mentally ill.

"The options that we have are limited, and those choices are not pleasant," Gomez said in an interview with The Associated Press. "We're talking about very real, very substantial changes to a program that nobody will take lightly."

Agency officials are scheduled to present their plan for possible health care cuts in the House Jan. 31 and the Senate Feb. 2. Gomez said the plan is still being drafted but that cuts of the magnitude suggested wouldn't allow much flexibility.

In Oklahoma, more than 2,000 adults received end-stage renal disease treatment, or dialysis, in the last fiscal year. About 110,000 received some prescription drug benefit, according to the Oklahoma Health Care Authority.

State legislators opposed to deep cuts in health care said they would fight to preserve the most crucial treatments for low income people.

"If you cut dialysis, you're killing people," said state Sen. Clark Jolley, chairman of the subcommittee that oversees health care funding. "Is it an optional coverage? Yes. Is it one that we're going to cut? I certainly hope not."

However, avoiding significant cuts in health care would require making deeper ones in other state programs such as education and mental health, and advocates for those priorities are expected to defend them vigorously.

New Republican Gov. Mary Fallin said she still is preparing her executive budget to present to lawmakers next month, but that "in this budget process, we're going to prioritize our spending needs, looking at our most essential services, especially for our vulnerable Oklahomans."

In addition to eliminating some Medicaid treatments, Gomez said, the health care agency would probably cut the rates it pays doctors and hospitals for treating low-income residents in the program.

Rates have been trimmed previously, and health officials fear some clinics that serve many low income patients might close because they could not afford to offer services.

Craig Jones, director of the Oklahoma Hospital Association, said hospitals hit hardest would be in southeast Oklahoma and in metropolitan areas like Oklahoma City and Tulsa.

In a few cases, Jones said, hospital officials said "they'd just shut the hospital doors, because those hospitals have a higher percentage of their business that is Medicaid," Jones said.

Jolley said it's too early to tell exactly what agencies will be cut and by how much, since the final amount of money the Legislature will have to spend won't be determined until next month, when budget numbers are certified.

Many states are pressing to trim Medicaid spending since the costs of the program have been growing sharply. Federal law prohibits states from reducing the number of people who qualify for assistance, so states are cutting the treatments provided.

The Health Care Authority, which currently has a $4.8 billion operating budget, including about $1 billion in state funds, was shielded from deep cuts last year because of federal stimulus money, but Gomez said the agency still reduced its reimbursement rates to providers by 3.5 percent.

Jones said his organization will continue to push for a new fee that hospitals would pay based on their net revenue to help pay for indigent care. But legislative leaders have opposed the idea in the past as creation of a new tax. Legislative leaders and new Republican Gov. Mary Fallin have ruled out tax increases to address the deficit problem.