The American Hospital Association said it would refile a lawsuit against the Trump administration's cuts to a discount drug program after losing its appeal Tuesday.
"We will continue our fight to reverse these unwarranted cuts and protect access for patients, and we expect to refile promptly in district court," the AHA said.
Three judges from the U.S. Court of Appeals for the District of Columbia Circuit ruled Tuesday that AHA's suit against the Department of Health and Human Services (HHS) was premature.
"When the plaintiffs filed this lawsuit, neither the hospital plaintiffs, nor any members of the hospital-association plaintiffs, had challenged the new reimbursement regulation in the context of a specific administrative claim for payment," Judge Gregory Katsas wrote.
"Nor could they have done so, for the new regulation had not yet even become effective."
HHS's changes, which went into effect in January, resulted in $1.6 billion in cuts to the 340B Medicare discount drug program.
The program requires that drug companies 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 changes that took effect in January lowered that reimbursement rate, so hospitals participating in the program get less money.
A federal judge threw AHA's lawsuit against the administration in December, leading AHA to appeal.
Since the appeals court didn't rule on the merits of the case, AHA said it will refile in district court.
“We are deeply disappointed that the courts have once again failed to rule on the merits of our case," AHA said in a statement.
"As today’s decision stated, ‘The question presented is not whether they may obtain judicial review of their challenges….but when and how they may do so through the special-review scheme for Medicare claims.’For more than 25 years, the 340B program has played a critical role in helping hospitals expand access to care for vulnerable patients and communities, with drug discounts that cost the government nothing."