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SACRAMENTO (AP) _ Thirty California hospitals sued the state Department of Health Services in federal court Thursday, claiming the agency has illegally frozen reimbursement rates paid to hospitals for treating low-income Medi-Cal patients.

The lawsuit filed in U.S. District Court in Sacramento charged the state with illegally trying to fix its budget problems on the backs of the state's hospital industry. It asked the court to invalidate the freeze or rule that it can't be instituted without federal approval.

Hospitals traced the freeze to an Aug. 16, 2004, vote by the Legislature declaring that "the state faces a fiscal crisis that requires unprecedented measures" to reduce state spending. Among them was retaining 2003 reimbursement levels for hospitals that have no Medi-Cal contracts with the state, but must accept Medi-Cal patients who come to their centers.

Gov. Arnold Schwarzenegger wants to trim $142 million more from Medi-Cal bills during the next five years as the program faces rising costs in California and throughout the country.

California has 6.6 million people in the Medi-Cal system, the state's version of the federal-state Medicaid program. Though many California hospitals have state contracts and pre-negotiated reimbursement rates to treat low-income, elderly and disabled patients, the lawsuit involves the estimated 20 percent of hospitals without contracts.

Many are in smaller cities and most of their Medi-Cal cases involve emergency room visits, said Byron Gross, the Los Angeles-based attorney who filed the suit.

"They show up and the hospitals have to treat them, and they can't transfer them until they are stabilized," Gross said.

The lawsuit said the state unilaterally set reimbursement rates without considering the effects of higher hospital costs for workers' compensation, malpractice insurance and staffing laws requiring one nurse for six patients.

Among hospitals and firms filing the lawsuit are Santa Rosa Memorial Hospital, San Antonio Community Hospital of Upland, seven hospitals of San Francisco-based Catholic Health Care West, Regional Medical Center of San Jose, nine Sutter Health Systems hospitals throughout Northern California and St. Joseph Hospital of Eureka. Gross, citing statistics that more than half the state's hospitals are losing money and that 43 have closed since 1999, said 40 more hospitals across the state may eventually join the lawsuit.

Department of Health Services spokeswoman Norma Arceo said director Sandra Shewry had not been officially served with the lawsuit and had no comment.