This is a tough cut as it is retroactive to June 2011, so Medicaid patients 
in California are not getting a good break as many doctors will decide not to mess with it any longer as the pay is at the bottom of the barrel for doctors. Well let’s see we have thing thing called “insurance exchanges” coming soon and subsidies will be provided there so if that part is in motion and not enough doctors to see patients…what has been accomplished?
The surplus amount is not finalized yet but between 1 and 4 billion is what is being projected as reported in the New York Times less than a month ago. The state saves half a million with this cut; however, what doctors see in actual losses is roughly a billion in losing federal and state funds. This could go to the Supreme Court. This week the Supreme Court also ruled in favor of doctors to now allow them to organize in groups to work with resolving unfair practices by insurance companies, so now it’s not just one guy or gal as and MD up against a huge corporation any longer. Contracts the doctors had to sign to be in network had that “bully” stipulation which now has to be reversed as this decision against a subsidiary of United Healthcare stated.
US Supreme Court Rules Physicians Can Work As A Group To Fight Unfair Business Practices of Health Insurers–Victory Over United Healthcare (Oxford Subsidiary)–Context Once Again With Contracts
As this AMA article reads, HHS tried to get the cut reversed by it was ruled they had no authority.
“Some doctors with Medicaid patient bases of 50% or higher are especially concerned about how this pay cut will affect their overhead. Pamela Davis, MD, a family physician in Northridge, near Los Angeles, whose practice is 70% Medi-Cal, said the results could be “devastating.” Medicaid currently pays just a third of what physicians receive from other payers, and the cut will drop that figure down to about 20%, she said. Dr. Davis said she hopes she isn’t forced to lay off staff or cut the number of patients she sees. “It’s unbelievable that in this era where we need primary care doctors, money is being taken away.”
How low does it go, about 51% of what Medicare pays. 
It gets more complex too as the provisions of the ACA gives the doctors an increase by exempting some who are eligible but those providing primary care service who don’t qualify will get the 10% decrease. Nobody has an answer yet on how the 10% cut interacts with the Accountable Care Provisions either..everyone is confused. The ACA act also down the road has a 5% cutback on future payments…so this model looks broken all the way around as nobody, even the Query Masters can give a definitive answer., so where does that California surplus go? BD
Washington Physicians and other health care professionals in California blasted a federal appeals court’s decision to uphold a 10% Medicaid rate cut approved by the state, predicting a dismal future for patient access under the program. Organizations representing the professionals responded to the ruling by laying the groundwork for a possible appeal to the U.S. Supreme Court.
On May 24, the 9th U.S. Circuit Court of Appeals denied a petition that had been filed by various health care organizations to prevent the state from reducing their Medicaid pay. The first of several rounds of cuts initially was enacted in 2008 to help offset budget shortfalls, but a series of legal battles between California’s medical associations and state and federal regulators had delayed their implementation.
The state expects to save about a half-million dollars annually from the reductions, but for California’s health care professionals, this amounts to a roughly $1 billion loss in state and federal funds, said Lisa Folberg, vice president of medical and regulatory policy with the California Medical Assn.
Folberg emphasized that the rate revision is “a 10% cut in perpetuity” and is retroactive to June 1, 2011. “As a result, moving forward, physicians can expect to see a reduction exceeding 10% until the retroactive collections are all made.”
Some doctors with Medicaid patient bases of 50% or higher are especially concerned about how this pay cut will affect their overhead. Pamela Davis, MD, a family physician in Northridge, near Los Angeles, whose practice is 70% Medi-Cal, said the results could be “devastating.” Medicaid currently pays just a third of what physicians receive from other payers, and the cut will drop that figure down to about 20%, she said. Dr. Davis said she hopes she isn’t forced to lay off staff or cut the number of patients she sees. “It’s unbelievable that in this era where we need primary care doctors, money is being taken away.”
http://amednews.com/article/20130610/government/130619972/6/
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