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An unexpected quirk in the new health care law has left birth control clinics struggling to balance their budgets in California. Clinics that have long enjoyed state support in California to run as nonprofits are now being forced to think of themselves as businesses.

April Dembosky of member station KQED visited a clinic near San Francisco.

APRIL DEMBOSKEY, BYLINE: Priscilla Castillo is surrounded by a rainbow of paperwork. These are the various insurance forms patients fill out when they come to the Planned Parenthood in Concord, about 30 miles east of San Francisco.

PRISCILLA CASTILLO: There's a blue one. There's a pink one. There's a yellow one. There's, you know, this, and then depending on the service, there's a whole other set.

DEMBOSKEY: Soon, all that paper will be gone. The clinic is moving to a new electronic system - it's latest attempt to cut costs in the age of Obamacare. At the start of the New Year, the vast majority of their patients became eligible for Medicaid. That's great for low income patients who will now have access to low cost medical care, but it's not clear that it's a great thing for family planning clinics in California.

For years, these clinics have been paid through a robust state program, the first and largest of its kind in the country. Now, as more of their invoices get paid by Medicaid, they're bracing for their revenues to drop. California's Medicaid rates are among the lowest in the country. Last month they were cut another 10 percent.

KATHY KNEER: Providers are looking at 2014 with a great deal of trepidation.

DEMBOSKEY: Kathy Kneer is the president and CEO of Planned Parenthood Affiliates of California.

KNEER: You know, our landlord's not going to take a rate cut, our utilities are not taking rate cuts, our staff are already under-compensated. It's very difficult. We just have to reduce services.

DEMBOSKEY: She says clinics will lose money on every Medicaid patient. Health centers in rural areas and some urban areas that already have trouble breaking even will have no other choice but to limit how many patients they can see. Clinics may also have to shorten the time providers can spend with each patient.

That's because the state program reimburses clinics for counseling time, but Medicaid does not. Kneer says this presents a critical challenge for explaining the proper use of contraceptives to people who are using them for the first time, especially young people and immigrants.

KNEER: You know, we had an Asian couple come in and the man wanted to be very supportive of his partner so he said he would take the pills. If you don't have counseling time, you hand them pills and push them out the door and something like that, you know, could happen.

DEMBOSKEY: Studies show that taking time to counsel patients contributes to their adherence to birth control. Audrey Hackenworth has been coming to Planned Parenthood since she was 17.

AUDREY HACKENWORTH: Being here, they gave me a lot more real life information, things that were actually applicable versus just like the textbook anatomy stuff that school teaches you.

DEMBOSKEY: Different clinics are developing different survival strategies to adapt to the funding changes. Some are planning to expand beyond reproductive services to provide a full range of primary care so they can claim reimbursement for more services and tap into a pool of federal money. But some Planned Parenthoods perform abortions. They can't take federal funds. Instead, they're forging partnerships with other clinics so they can get some income from referred patients.

They're also focusing on improving efficiency. That means cutting back on the counseling time, partly because they won't get paid for it, but mainly because it leaves other patients sitting in the waiting room too long.

CASTILLO: We don't want to lose clients because, you know, they can go to another location and, you know, get in and get out in 15 minutes. You know, we definitely want to be competitive.

DEMBOSKEY: Clinic directors like Priscilla Castillo have been under pressure to keep things moving.

CASTILLO: Before we would give all the information all the time and now we're kind of training folks to kind of ask certain key questions and focus on what is it they're here for specifically and then bombard them with that information that they're asking for.

DEMBOSKEY: Planned Parenthood and other family planning clinics in California are looking for the right balance of time that's both good for the patient, but also helps them stay in business. For NPR News, I'm April Demboskey in San Francisco.

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