WASHINGTON (Reuters) -- Hospitals, nursing homes and other Medicare providers would get an additional $16 billion in payments over the next five years under an agreement worked out by the Republican-controlled Congress and the White House.

The Medicare measure was included in a fiscal 2000 budget deal that the House passed Thursday. The Senate is expected to approve it in the next few days.To stave off bankruptcy, the growth of the Medicare health care program for the elderly and disabled was trimmed in the 1997 Balanced Budget Act but the savings have been much larger than the anticipated $115 billion over five years, perhaps twice that figure.

That extra belt-tightening prompted hospitals, nursing homes, home health care agencies and other health care providers to seek relief from Congress. Under the agreement, payments would increase $16 billion over five years and $27 billion over 10 years.

The measure also would expand coverage of expensive anti-rejection drugs that organ transplant patients must take for the rest of their lives.

"This is a good arrangement," said California Republican Rep. Bill Thomas, who as chairman of the House Ways and Means subcommittee on health helped shape the Medicare provisions. "People in need are pleased to get it. It's endorsed by Republicans ... most Democrats -- and the White House."

"We were hearing from seniors who were being deprived of critical care," said Connecticut Republican Rep. Nancy Johnson.

White House Chief of Staff John Podesta said reaching a bipartisan remedy to fix the "unintended consequences" of the 1997 budget law was an "important accomplishment" and a welcome prelude to future efforts to overhaul Medicare.

Republicans and Democrats alike agreed that they needed to make some adjustments in the Medicare program, including introducing a new system of outpatient payments, changing payment caps on certain types of rehabilitative therapies and phasing in some payment changes more slowly than planned to ease their impact.

The new infusion of funds is set to include higher payments to health maintenance organizations (HMOs) that take part in the Medicare-Plus-Choice option, a managed care component of Medicare. The payments, plus related reforms to the managed care plans, would increase HMO payments by $4.8 billion over five years.

Lawmakers are eager to encourage HMOs to take part in Medicare. Citing low payments, Medicare HMOs have withdrawn completely or reduced options in about 500 counties since 1998.

The legislation does not add the prescription drug benefit that President Clinton has sought to add to the Medicare program, nor does it revamp and modernize the overall Medicare program, which covers all Americans starting at age 65 and faces eventual bankruptcy as members of the baby boom generation retire and enter the program.

A bipartisan commission to overhaul Medicare failed earlier this year, although its work may lay the foundation for Medicare reform efforts next year.