The Federal Government plans to cut about $107 million in health funding from the state this year because of a population data error.

Wimmera hospitals could lose hundreds of thousands of dollars because of the cuts.

Mr Smith said West Wimmera Health Service would lose about $175,000.

"It will affect us dramatically," he said.

"Our budget has been set and is very, very fine as it is now to continue services.

"We'll need to look at services and where we can make savings."

Mr Smith said the cuts would make maintaining current health services extremely difficult.

"It could result in the closure of beds," he said.

Mr Smith said until there were further announcements the hospital could not comment on what services might or might not be lost.

He urged the government to hold off on the cuts.

"It's catastrophic. It really is a disaster," he said.

Mr Smith said the 'alleged population data' required justification from the government.

"I'd like to see them assist rural and remote hospitals," he said.

"In the bush the costs are substantially different from those in the city.

"Hopefully we can manage it in conjunction with the Victorian Government and I hope we get a chance to discuss it with the minister."

Rural Northwest Health could suffer a cut of $115,000.

Chief executive Catherine Morley said a board meeting on Tuesday would discuss options if the cuts occurred.

She said the hospital was financially viable and unlikely to cut services.

But she said planned projects in the budget and expanded services could be scrapped.

Ms Morley said the hospital's utility costs had increased by 40 per cent in the past year, possibly because of the carbon tax.

She said the funding cuts would add further pressure. Ms Morley said the hospital would tell Member for Swan Hill Peter Walsh of its concerns.

Member for Western Victoria David O'Brien called the proposed cuts disgusting.

"The Federal Government has decided to cut funding to Wimmera Health Care Group by an unbelievable $86,000 a month when the funds have already been allocated," he said.

"They have received a month's notice of these surprise reductions when the money is committed to the end of the year.

"I could not think of a worse time for these cuts with Christmas coming up and many people booked in for surgery and beds now in danger of being closed."

Mr Walsh said the funding reductions would have a significant negative impact on services.

"These cuts have been imposed on health services with little notice, halfway through the financial year, and with no consideration of its disruptive impact on budget management, staff rosters or the scheduling of clinical work," he said.

"They are significant and will have a serious impact on hospital operations and pose a threat to elective surgery and other important health services.

"The Federal Government must reverse its decision on retrospective and future reductions to state funding and fully commit to its obligations to our health services."

Wimmera Health Care Group did not respond to calls from the Mail-Times by deadline.