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SANTA ROSA -- Santa Rosa Community Health Centers is among a group of health organizations suing the state of California over planned reimbursement rates for certain services that are  lower than what a group of federally qualified health centers say they are entitled to under federal rules.

The California Primary Care Association is the lead plaintiff of the suit, filed April 5 in federal court in San Francisco. The association is joined by the network of Santa Rosa health clinics that serves primarily low-income residents, as well as the Gardener Family Health Network, which runs several health centers in the South Bay, and Lifelong Medical Care in Berkeley. All are federally qualified health centers, or FQHCs.

The dispute over reimbursement rates stems from adult day health care services provided by centers throughout the state, which lawmakers sought to eliminate as a means of trimming the state's ballooning budget deficit last year, according to the court document.

Assembly Bill 97, which would have eliminated the program as a Medi-Cal benefit, was passed last year. The bill, however, faced a legal challenge from advocates of the disabled, and a settlement was reached that formed Community-Based Adult Services, or CBAS, which would act as an alternative, according to the latest lawsuit.

But the Department of Health Care Services now plans to reimburse providers of the services at the rate for Medi-Cal, the state's version of Medicaid, instead of a federal rate that is about twice as much, according to the suit. The health centers are seeking a temporary restraining order on the implementation of the lower rate.

"(The state) is wanting to pay community health centers about half of what they were paying for the same services before," said Naomi Fuchs, executive director of Santa Rosa Community Health Centers, which has eight locations in Santa Rosa. "These clients are extremely frail and disabled. At least a third cannot feed themselves."

Ms. Fuchs said roughly 50 patients are treated under its adult day care program. She also said that if the Santa Rosa health centers were forced to treat those patients at the proposed reduced rate, the centers would incur a yearly loss of about $650,000. In 2011, the health centers had $24.7 million in annual revenue.

"This new program is just the same program with a different name," Ms. Fuchs said.

The state, she added, is not reimbursing the alternative that arose from the settlement enough money to make if it viable.

"As an FQHC, we get a rate that covers our cost," she said, adding that the health centers are the only ones to provide the program in the North Bay. "They're not reimbursing the alternative enough to keep it open."

As a result, health centers likely would seek to eliminate such services, thus leaving vulnerable seniors at risk, according to the suit.

"Some FQHCs that are the only Medicaid providers of CBAS services in their county or their immediate area will have to discontinue providing CBAS services immediately," according to the complaint.

The Department of Health Care Services sought a waiver from the federal government for the newly named program. According to the lawsuit, even though the waiver was approved, it doesn't expressly waive the higher federal reimbursement rates, known as a prospective payment system. As such, "federal Medicaid law requires payment at the (prospective payment system) rate for all (Community-Based Adult Services)," according to the suit.

The department said it could not comment specifically on pending litigation, but defended its plans to pay the lower rate to health centers that treat Medi-Cal beneficiaries.

"Community-Based Adult Services reimbursement rates are included in the terms of the adult day health care settlement, which was approved by a federal district court judge," department spokesman Anthony Cava said in a statement. "Additionally, the rates are included in the amendment to our Bridge to Reform waiver, which was recently approved by the federal Centers for Medicare & Medicaid Services."

According to the suit, Medicaid law requires that federally qualified health centers be reimbursed on a per-visit rate for certain services.

Instead, the department is proposing to reimburse FQHCs at the rate that it will pay other Medi-Cal providers, which is generally less than half of the federal rate and "not sustainable" for many of them, according to the suit.

The health centers argue that if the services become unavailable, seniors who use the program will likely be forced into skilled nursing facilities or will go unattended at their homes until they suffer from an emergency or urgent medical need.

"Ironically, either or these alternatives will be more expensive than reimbursing FQHCs at the PPS rate to provide these services," according to the suit.

Ms. Fuchs said those who use the program typically have a relative who can assist them in the evenings but work during the day. Without the program, those in it would lose their homes, she said.

"They truly are our most frail, and they want the dignity of staying in their homes," Ms. Fuchs said. "They don't want to go to a nursing home."

The suit names Toby Douglas, director of the Department of Health Care Services, as a defendant. Sacramento-based law firm Murphy Austin Adams Schoenfeld LLP is representing the Primary Care Association and the health centers.