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Last year, a deal was struck to save the debt-ridden hospital. However, the merger was contingent on a $62 million grant from the state. And, currently, nearly $700 million in undistributed health care grants from the state are being reviewed by Albany.

If the state decides to revoke the grant, the Cobble Hill hospital will not be able to merge with SUNY Downstate Medical Center, LICH would be forced to close, and about 2,500 people could lose their jobs.

Patients found the news that the grant was under review upsetting, while doctors said they found it surprising.

“I’m terribly sorry. I certainly don’t want it to close,” said a LICH doctor. “It’s been here for many years and I think it’s a wonderful hospital.”

“I’m a diabetic, so I come here quite often,” said a patient. “I come here for my feet. I’m a veteran. There are many things wrong with me, so I come here often, just like everybody else in the neighborhood. I don’t know what they’re going to do.”

When it was originally announced, the merger was touted as a hospital saver and was set to be completed by this spring. It would have been the first time in the state's health care system that a private institution would be run by a public one.

A spokesperson for Governor Andrew Cuomo says the state is reviewing all health care spending to ensure that all grant money goes to the most viable projects.

State Senator Daniel Squadron, who represents the hospital’s district, says the merger is critical.

“We are in tough times in the state and so we can never fault the review,” said Squadron. “What we can't have is a delay or something that makes this deal that's happened, not happen.”

But the president of the group that runs the hospital, Continuum Health Partners, believes the funding is at risk. He's quoted in the New York Times saying conversations with state officials left a "clear implication" the grants for LICH were seriously in question.

Cobble Hill residents say that does not bode well for patients throughout the five boroughs, especially since hospitals in the West Village and Harlem have been shuttered.

“It might not be the best hospital but it's nice to have around,” said the resident.

Cuomo's spokesman says the final decision on which health care grants will be paid out, and which ones canceled, will be made in two to three weeks.

Continuum says if the grant supporting the merger is rescinded, LICH will have to take steps to start shutting down next month.