Legal Aid Foundation of Los Angeles filed suit Friday on behalf of patients against the California Department of Health Care Services.
The suit claims the state improperly moved patients into managed care even though they should have been allowed to stay on Medi-Cal's fee-for-service plan.
The state moved 240,000 Medi-Cal patients in 16 counties, including Los Angeles, to health plans to save money. About 27,000 sought exemptions but most were denied.
Attorneys say that group often suffers from life-threatening conditions, such as cancer and HIV, and require specialty care. The suit asks to move patients back.
The state says it couldn't comment because it hasn't seen the lawsuit.