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A federal funding train wreck could be heading straight at New Mexico's hospitals - and the entire state congressional delegation is trying to stop it, officials said.

The Bush administration on Jan. 18 proposed cutting some federal matching money for state Medicaid programs across the country. Unless legislation passes to block that plan, the changes will go into effect in September, said Carolyn Ingram, New Mexico's Medicaid director.

In New Mexico, those cuts could create a $110 million shortfall in Medicaid for fiscal 2007-2008 and a $178 million shortfall in 2008-2009, Ingram said.

The current state Medicaid budget is $2.76 billion.

"The regulations would really hurt hospitals who have to provide care to the indigent populations of our community and are the safety net of our community," Ingram said.

The timing is especially bad as the state Human Services Department and lawmakers worked to pass a bill during the recent legislative session expanding Medicaid to cover all adults living within 100 percent of the federal poverty level, Ingram said.

"I think hospitals would have to see how to balance their budgets with the shortfall," Ingram said. "It could mean a weakened health care system overall."

University of New Mexico Hospital would be one of the hardest hit by the changes, Ingram said.

If the rule goes into effect, the hospital could lose between $15 million and $32 million a year, said Billy Sparks, a spokesman for the Health Sciences Center.

"One of the biggest criticisms is that there's no time to plan for the shortfall," Sparks said. "It's much too quick. It's very radical that it would be proposed and implemented this rapidly."

The changes could also hurt UNM Hospital's ability to open the new $233.8 million Barbara and Bill Richardson Pavilion in the next few months, Sparks said.

"Hiring nurses and providing staff for the new facility - we'll have more beds but you have to have nurses as well," Sparks said.

Ingram said she suspects the changes are the Bush administration's way of balancing the federal budget to continue funding the war in Iraq and Afghanistan.

"They have to figure out how to balance the budget somehow," Ingram said. "I think the feds are just trying to balance their budget on the back of the Medicaid program."

Politicians from across the nation signed a letter opposing the changes, including 263 U.S. representatives and 62 U.S. senators. The entire New Mexico delegation signed off on it, as did Gov. Bill Richardson, Sparks said.

"We have unanimous political support in New Mexico in opposition to this," Sparks said.

Sen. Jeff Bingaman, a Silver City Democrat, said in a news release Tuesday that he thinks the changes are too broad and dangerous.

"At a time when our state is working to expand health care coverage to more residents, it would be devastating to lose millions of dollars in Medicaid funding," Bingaman said.

On Thursday, the Senate Appropriations Committee voted 18-11 to add an amendment to the Supplemental Appropriations Bill, which funds the wars in Iraq and Afghanistan, that would put a two-year moratorium on the proposed changes.

Sen. Pete Domenici, an Albuquerque Republican who sits on the committee, supported the amendment, said Chris Gallegos, a spokesman for Domenici.

The Supplemental Appropriations Bill and amendment are expected to reach the Senate floor by next week, Gallegos said.

"We fully expect the amendment to stay in," Gallegos said.

If the 263 representatives and 62 senators who signed the letter vote the way their signatures suggest, the amendment has a good chance of stalling the changes for at least a few years, Gallegos said.

"That's broad, broad support," Gallegos said. "That's closing in on the super-majority you need to get anything done."