Providers, however, have argued for years that taking on new patients will not be financially viable.
Last year, a federal appeals court backed California's right to cut payments to the Medi-Cal program by 10 percent. State officials at the time said that would save the state more than $330 million each year.
Groups representing doctors, hospitals and pharmacists said they filed a request Monday for a rehearing before the full 9th Circuit U.S. Court of Appeals, rather than a three-judge panel that ruled in the state's favor last year.
"There is no doubt in my mind that if these cuts are allowed to stand, community clinics will close," said Tom Hayes, CEO of Eastern Plumas Health Care, which operates an acute care hospital and medical clinics in rural Plumas and Sierra counties. "Most of our patients are lifelong residents of the area, and to force them to move would be heartbreaking."
The state's planned cuts to reimbursement rates would apply only to those hospitals that have skilled nursing units within their acute care facilities, which represents about 25 percent of all hospitals in the state, said Jan Emerson-Shea, a spokeswoman for the California Hospital Association.
Hospitals, which by law must provide emergency care to the uninsured, will increasingly be treating new Medi-Cal enrollees, said Robin Swanson, a spokeswoman for the Assembly speaker. In turn, that could help offset the cost of charity care and ultimately bring down health care costs for all, she added.
Physicians, however, are not required to treat new Medi-Cal patients and could opt out altogether.
Associated Press Writer Don Thompson contributed to this report from Sacramento. Burke reported from San Francisco.