Re: Medi-Cal insurance coverages
What the California state government did was reduce reimbursement rates. Not specifically for diabetes, for all kinds of services, and now it's just not enough. I suppose the hospital felt they were up against a wall: Charge patients the difference between the reimbursed amount and the actual cost of care, or go out of business.
Still, $500 surcharge per visit seems pretty extreme. Most office visits only cost $100-$200 altogether, and most patients with public health care simply don't have that kind of money. You could try calling around to other providers and see what happens.