Alleging that Gov. George Deukmejian's planned cuts in Medi-Cal fees are illegal, the California Medical Assn. said it will file suit to block the fee reductions. The suit, which was to be filed in the state Court of Appeal in San Francisco, is the second in less than a week against the 10% cuts scheduled to start next week. Last Friday, the California Pharmacists Assn. filed a separate suit. "As a matter of policy, we do not comment on pending litigation," said Bill Ihle, a Department of Health Services spokesman. California Medical Assn. President-elect Frederick Armstrong of San Jose said his group's suit on behalf of 60,000 physicians alleges, among other things, that the cuts were made without required public hearings.