President Bush, seeking to reverse the spiraling cost of medical malpractice insurance, will send to Congress this week his plan to encourage states to limit court awards, administration officials said Monday.

The measure, which Bush announced in his State of the Union address in January and included in his budget for fiscal 1992, is designed to help check the fast rise in health-care costs, said officials who spoke on the condition of anonymity.The aides said that Bush's package essentially would follow the proposals the president made earlier this year.

They include:

- Pressuring states to set limits on the amounts that malpractice victims can collect for pain and suffering.

- Establishing a system for mediating disputes.

- Strengthening state medical licensing boards.

- Encouraging a way that malpractice judgments could be paid over time, rather than as lump sums.

States that refused to comply could lose a portion of the federal Medicare and Medicaid funds they receive for health care for the elderly and the poor.