Several hospital lobbying groups and health care systems sued the federal government on Monday to prevent it from implementing a new rule that would reduce Medicare reimbursements for prescription drugs bought through a program designed to lower drug costs for hospitals serving low-income patients.

The American Hospital Association, the Association of American Medical Colleges and America's Essential Hospitals, an industry trade group representing community safety-net hospitals, argue in their complaint that the acting secretary of the U.S. Department of Health and Human Services, Eric Hargan, exceeded his statutory authority in proposing to cut $1.6 billion in so-called 340B drug payments. (Hargan, who was confirmed by the U.S. Senate last month, is a former Greenberg Traurig shareholder.)

Eastern Maine Healthcare Systems in Brewer, Maine; Henry Ford Health System in Detroit and Park Ridge Health in Hendersonville, North Carolina, are also named plaintiffs in the suit, which was filed in U.S. District Court for the District of Columbia in Washington, D.C.

According to the complaint, Congress enacted the 340B program in 1992 to lower the cost of drugs purchased by certain public and nonprofit hospitals and federally funded clinics that serve large numbers of low-income patients. Under the current Centers for Medicare & Medicaid Services rules governing the program, participating health care providers receive 6 percent on top of the drug's average sales price in Medicare reimbursements. Under the new rule, which was approved on Nov. 1 and is scheduled to go into effect on Jan. 1, the reimbursement rate would be slashed to 22.5 percent under the average sales price, a $1.6 billion reduction in the reimbursement rate, the complaint states.

This nearly 30 percent reduction exceeds the secretary's authority because it thoroughly undermines the 340B program by depriving eligible hospitals of critical resources Congress intended to provide through the discounts, the hospitals argue in the complaint.

“Elimination of these resources will, in turn, threaten the ability of covered entities to provide essential healthcare services and programs to their communities, including underserved populations within those communities,” it states. “This is flatly inconsistent with the intent of the 340B program, which was designed to help covered entities stretch scarce federal resources to reach more patients.”

The government has 21 days to file a responsive pleading.

The plaintiffs are represented by attorneys Carlos T. Angulo, Alexandra W. Miller and Wen Shen in the Washington office of Zuckerman Spaeder.