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PDI Surgery Center in Windsor, California's only nonprofit dental surgery center exclusively serving low-income children, will receive a special exemption from a much-feared state budget cut that threatened to shut its doors.

The exemption to the state's 10 percent cut to Medi-Cal reimbursements comes only three weeks before a rolling schedule of cuts is expected to begin. By January, the cuts will apply to services such as medical transportation, general dental services, durable medical equipment, pharmaceuticals, doctors, clinics and certain nursing facilities.

Because of its unique role serving impoverished children with severe dental decay, the state's health services cut PDI a break, said Assembly member Wesley Chesbro, D-Arcata, who championed the exemption in Sacramento.

"PDI Surgery Center would have had to close its doors had it been forced to absorb these cuts," Chesbro said.

In May, Chesbro brokered a meeting between PDI's CEO Viveka Rydell and officials at the California Department of Health Services. At the meeting, Rydell made her pitch for why the surgery clinic should be exempt.

Established five years ago with significant local support, the center initially served low-income children in Sonoma, Lake and Mendocino counties. But as the only nonprofit surgery center in the state, its territory grew quickly.

Since the center opened, nearly 10,000 children from 30 counties in Northern California, from Santa Cruz to the Oregon border, have been treated at the center.

"The founders never thought that 30counties in the state would need this," Rydell said.

Unlike many medical clinics in the North Coast region, PDI is not a federally qualified health center, and therefore does not receive an enhanced reimbursement rate for Medi-Cal. Rydell said she argued with state health services officials that the surgery center sees the same population of children and should receive a break from the cuts.

The break granted to PDI was written as a categorical exemption and applies to "dental pediatric surgery centers that provide at least 99 percent of their services under general anesthesia" to youths under 21. But PDI is the only center in the state that qualifies, Chesbro said.

"We did not know at all that the department was going to agree with us," he said, adding that the exemption speaks to the uniqueness of what PDI does.

The cuts were supposed to have gone into effect in June 2011 as part of an effort to control a vast state budget deficit, but they were delayed after the California Medical Association and others sued the state, arguing that the cuts would harm millions of patients who rely on Medi-Cal.

The federal 9th Circuit Court of Appeals removed the hold on the cuts earlier this year and the U.S. Supreme Court refused to take up an appeal.

The exemption PDI received does not relieve the center from having to pay the state back-dated cuts, which total $525,000. Other medical providers affected by the 10 percent cut will also have to pay the state retroactively.

Were the exemption not granted, PDI would have needed to raise an additional $300,000 a year to cover operations. The center already raises $400,000 through grants and events.

Exemptions were also granted to rural "level B" nursing facilities that are part of acute care hospitals and for certain high-cost prescription drugs used to treat extremely serious conditions, according to an implementation schedule released this week by state health-services officials.

The schedule sets the first 10 percent cuts for medical transportation and general dental care for Sept. 9. Reimbursement cuts for medical supplies begin Oct. 24, and cuts to pharmacists, physician, clinic and certain nursing facilities begin Jan. 9, 2014.

Rydell said that in the five years the center has been in operation, a tenure that has coincided with the Great Recession, the severity of children's tooth decay has gotten progressively worse.

Though PDI was spared, the state's 10 percent cut applies to general dental care. That could impact more than 5 million children who will be enrolled in Medi-Cal by the end of the year, according to Jenny Kattlove, director of the Children's Partnership, a national nonprofit advocacy group.

"This action has grave consequences for children and their access to dental care," said Kattlove in a statement responding to the state's implementation schedule released this week.

"Already, California ranks as one of the 10 worst states in terms of Medicaid-enrolled children getting dental care," Kattlove said.

You can reach Staff Writer Martin Espinoza at 521-5213 or martin.espinoza@pressdemocrat.com.)