ASHINGTON, Jan. 22 — Senator Edward M. Kennedy, Democrat of Massachusetts, and the White House are engaged in intensive discussions seeking a deal on patients' rights legislation, and their usual allies are expressing alarm at the terms of a possible compromise.

The talks focus on the ability of patients to enforce their rights by suing health plans, insurance companies and employers who have promised various health benefits.

The Senate passed its version of the legislation, the patients' bill of rights, last June by a vote of 59 to 36, with 9 Republicans supporting the legislation. The House passed its version, 226 to 203, in August. Both measures would allow patients to sue health maintenance organizations and insurers for injuries caused by the denial of care, but the House bill provides a more limited right to sue.

Consumer advocates strongly prefer the Senate bill. President Bush favors the House bill and threatened to veto the Senate measure last year.

Mr. Kennedy and White House officials said they hoped to reach an agreement on patients' rights, just as they forged a bipartisan agreement on education legislation through weeks of quiet negotiations last year. The friendship between Mr. Bush and Mr. Kennedy, scions of two of America's best known political families, could yield political dividends for both men.

The chief sponsors of the Senate bill are Mr. Kennedy and Senators John Edwards, Democrat of North Carolina, and John McCain, Republican of Arizona.

In an interview, Mr. Edwards, a plaintiffs' lawyer intimately familiar with the issue of insurer liability, said: "I'm pretty optimistic that we may be able to reach some agreement. There is still a lot of work to be done."

Representative Charlie Norwood, Republican of Georgia, wrote the liability provisions of the House bill in negotiations with the White House last year. Mr. Norwood, a longtime advocate of patients' rights, stunned Democrats when he agreed to restrictions on the right to sue demanded by Mr. Bush.

James P. Manley, a spokesman for Senator Kennedy, characterized the talks as conversations and added, "The conversations with the White House are designed to see if there is any common ground."

But the talks have progressed to the point that aides to Mr. Kennedy and White House officials are discussing legislative language to define the standard of care to which H.M.O.'s would be held in making medical decisions.

People involved in the discussions said they were using the House bill as their point of reference. In addition, they said, aides to Senator Kennedy have indicated that they could accept an arrangement under which the right to sue would be governed mainly by federal law, not by state laws regulating insurance or the quality of medical care. This would apparently give insurers the uniformity they seek.

In return for that concession, Senate aides said, lawsuits involving questions of medical judgment and medical necessity could be filed and tried in state court with juries determining the amount of damages in some cases. The H.M.O.'s performance would be measured against standards set forth in federal law.

Consumer advocates and plaintiffs' lawyers generally prefer state courts to federal courts because the state courts are more convenient and their rules of evidence and procedure are often more favorable to plaintiffs.

Groups that have supported Mr. Kennedy in the past expressed concern about the direction of his talks with the White House. They said they worried that in the guise of a patients' rights bill, the insurance industry would secure more protections for itself to stave off the impact of recent developments in courts and state legislatures that are trying to regulate managed health care.

In recent years, many federal and state judges have made it easier for injured patients to sue insurers for damages. But the law is continually in flux, and patients can never be sure whether they will prevail.

President Bush's usual allies, including business groups and insurers, are even more alarmed than the consumer groups.

Suzanne DeFrancis, a spokeswoman for the Health Benefits Coalition, which represents employers and insurers, said: "We are incredulous that talks on this bill are still going on. How in the world can Washington pass a bill that raises health costs at a time when costs are already going through the roof? We're in a recession. More and more people are losing insurance. Why are Congress and the White House discussing legislation that would make things worse?"

Members of the Health Benefits Coalition include the National Federation of Independent Business, the United States Chamber of Commerce, the Business Roundtable, the National Association of Manufacturers, the Health Insurance Association of America and the American Association of Health Plans.

Supporters of patients' rights say that federal legislation is needed even more now as health costs rise rapidly because, they contend, insurers will be more tempted to save money by denying people treatment.

The House and Senate bills would both establish federal rights for tens of millions of people with insurance, guaranteeing access to emergency care, medical specialists and medically necessary prescription drugs.

Federal and state officials have had difficulty figuring out how to regulate H.M.O.'s because they make both administrative decisions, as insurers, and medical decisions, like doctors and hospitals.

Under the compromise now being discussed, H.M.O.'s could be sued like doctors and hospitals if, in making medical decisions, they failed to exercise "ordinary care" — the degree of care, skill and diligence that would be exercised by a reasonable and prudent health care professional.

The White House wants to limit the damages that patients could recover in lawsuits against H.M.O.'s. But administration officials and Senate aides have apparently not discussed the precise level of such caps.