Three hospital groups will appeal a district court ruling that dismissed a lawsuit over the Trump administration's cuts to a discount drug program.

The American Hospital Association, the Association of American Medical Colleges and America's Essential Hospitals formally notified the court Tuesday of their intent to appeal the district court's Dec. 29 decision.

ADVERTISEMENT

The groups initially sued the administration last year over a rule that will result in $1.6 billion in cuts to hospitals participating in the 340B drug discount program.

The program requires drug companies to give eligible hospitals serving a large number of low-income patients steep discounts for some drugs.

Medicare then reimburses these hospitals at a higher rate than what they paid for drugs, allowing the facilities to take the savings and reinvest into services to help their patients.

The rule from the Trump administration, which took effect Jan. 1, lowers that reimbursement rate for hospitals.

Judge Rudolph Contreras dismissed the case because it was filed before the rule took effect.

The groups argue that the changes violate federal law and note that Contreras did not rule on the merits of that claim.