Lawrence + Memorial Hospital in New London would lose $6.5 million and The William W. Backus Hospital in Norwich would lose $4.8 million in state Medicaid funding under budget rescissions announced Friday by Gov. Dannel P. Malloy.

The cuts come as a result of Malloy’s decision to cut the state Department of Social Services’ Medicaid account by $63.5 million, which had been earmarked almost entirely for hospital funding, according to the General Assembly’s Office of Fiscal Analysis.

The reduction eliminates three quarterly installments of Medicaid payments to hospitals, a mechanism the state used to return a portion of state taxes paid by hospitals.

It will trigger an additional loss of federal matching funds, bringing the total impact to hospitals to $191.96 million, the fiscal analysis office said.

Jennifer Jackson, chief executive officer of the Connecticut Hospital Association, said the cuts “are absolutely going to result in job cuts.”

“This will hurt our economy, workers and patients,” she said. “We’re reeling from this. It’s so shocking and counterproductive. It’s going to have a devastating effect.”

One in five Connecticut residents is covered by Medicaid. Reimbursement rates for Medicaid services are already well below the cost of those services, she said.

“This is an inappropriate and unsustainable situation,” she said.

The hospital association is hoping to have the decision reversed or cuts lessened, she said.

“We are calling on the legislature to intervene,” she said. “We’re also calling on the public to intervene. They should be alarmed.”

Mike O’Farrell, spokesman for L+M, said hospitals have been placed under increasing financial stresses by the state.

L+M ended the last fiscal year with an $18.7 million loss, with expenses of $473.6 million and revenues totaling $454.4 million.

Backus had a positive operating margin for fiscal 2014, ending the year with $48.6 million in revenues over expenses. Total revenues were $301 million.

“For the past several years," O'Farrell said, "the state has consecutively reduced its share of funding the Medicaid program by shifting responsibility to the federal government and placing a greater burden on hospitals. At the same time, the number of people seeking Medicaid services has almost doubled, which has created real challenges for hospitals in meeting these demands.”

The increasing financial strain is a main reason L+M is seeking to affiliate with Yale-New Haven Hospital, he said.

“These significant challenges and ongoing negative economic realities are critical drivers behind the consolidation in our industry, and why we are in the process of seeking an affiliation with a larger system,” he said.

Yale-New Haven is slated to lose $20.4 million under the Medicaid cuts. Hartford Hospital, which is part of the Hartford HealthCare network along with Backus, is slated to lose the same amount, according to the fiscal analysis office.

Shawn Mawhiney, spokesman for Backus, said the hospital is still analyzing how it would be affected by the cuts. He declined further comment.

j.benson@theday.com

Twitter: @BensonJudy