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The full 9th Circuit Court of Appeals Friday upheld Gov. Jerry Brown's 10 percent cut in payments to hospitals, doctors, pharmacists and other providers of medical care to the poor under the state Medi-Cal program.

The cut, adopted by Brown and the Legislature two years ago to help balance the state budget, was nullified by federal Judge Christina A. Snyder, but a three-judge appellate panel reversed the rejection. That decision was upheld Friday by the full appeals court. The cut had been suspended by court order while the appeal was under way.

The case was in federal court because of a series of suits challenging the federal government's approval of the state action. Friday's ruling upheld the right of the federal government to approve the reduction. Attorneys for the providers and health care advocacy groups said they may seek a rehearing of the case and/or appeal to the U.S. Supreme Court.

The provider rate reduction was aimed at saving the state several hundred million dollars a year and is included in Brown's latest budget, which is now undergoing scrutiny in the Legislature. It's the centerpiece of a larger conflict over reductions of "safety net" health and welfare services that pits Brown against their advocates, with Democratic legislators caught in the middle.



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