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Health care providers are asking federal judges today to reconsider a December decision by a three-judge panel that allows California to slash Medi-Cal rates.

Gov. Jerry Brown and state lawmakers approved a 10 percent cut in Medi-Cal reimbursements to doctors, hospitals, pharmacists and other providers as part of their 2011-12 budget. The reduction had been tied up in litigation since 2011, but a three-judge panel at the U.S.9th Circuit Court of Appeals ruled last month that the state could move ahead.

When Brown declared this month that California's budget is finally balanced, he assumed the state would save $488 million general fund from the court-approved Medi-Cal cut.

The California Medical Association, California Hospital Association and other groups are asking the 9th Circuit for a full-bench review of the December decision. In its court petition, they say the decision "upends 16 years of Ninth Circuit precedent recognizing that federal Medicaid law does not allow California to set provider rates without documented consideration of providers' costs."

The petition comes as Brown and state lawmakers are considering an expansion of Medi-Cal to low-income childless adults and parents just above the federal poverty level as part of federal health care changes. Though the governor proposed expanding Medi-Cal in his January budget, he said he was concerned about rising state costs.



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