West Lebanon — A lawyer for the New Hampshire Hospital Association on Monday said the state has breached a key part of an agreement related to hospital reimbursements, and that the dispute ultimately could threaten more than $220 million in federal funding.

A letter to the New Hampshire Attorney General’s Office from Manchester-based attorney Scott O’Connell — who represents the hospital association and some of its members, including Dartmouth-Hitchcock Medical Center — said the state has failed to create a dedicated fund called for as part of a 2014 agreement. Under that deal, hospitals have continued to make so-called Medicaid enhancement tax payments, which the state uses to leverage a like amount from Washington. In return, the hospitals are to receive guaranteed levels of payments for treating patients covered by Medicaid, which traditionally reimburses at lower rates than private insurance.

But the Sununu administration has budgeted for only $191 million in such “disproportionate share hospital” payments, well below the $224 million expected under the deal reached in 2014.

O’Connell’s letter says that because the dedicated fund has not been created, the hospitals may seek to have their Medicaid enhancement tax payments, which are due on April 15 and have been estimated at $227 million, go into an escrow fund overseen by a judge, rather than be made to the state itself. That, in turn, would mean Concord couldn’t use the money to leverage the federal money.

“Immediate course correction is necessary if the state wants to avoid creating a more than $220 million hole in its budget through failure to secure the federal match,” O’Connell’s letter said.

Deputy Attorney General Ann Rice declined to comment on Monday, saying the state Attorney General’s Office is “reviewing the matter.”