A federal appeals court ruled Friday that a provision of President Donald Trump’s signature tax and domestic policy law cutting Medicaid funding to Planned Parenthood entities that perform abortions does not constitute unconstitutional punishment.

The Boston based 1st U.S. Circuit Court of Appeals overturned a preliminary injunction issued in July by U.S. District Judge Indira Talwani, who had found the law likely violated the Constitution by targeting Planned Parenthood health centers, Reuters reported.

The appeals court allowed the provision to take effect in September while it reviewed the Trump administration’s appeal of Talwani’s ruling.

Planned Parenthood has said at least 20 health centers have closed since Trump signed the measure into law in July.

Talwani has since blocked enforcement of the law in a separate case brought by 22 Democratic led states and the District of Columbia, though the appeals court temporarily stayed that ruling while it considers whether to lift the injunction.

Alexis McGill Johnson, president of Planned Parenthood Federation of America, said Friday’s decision allows the administration to restrict access to care.

“This ruling enables the Trump administration’s attempts to block access to care for patients most in need and force Planned Parenthood health centers to the financial brink,” Johnson said in a statement.

The dispute centers on a provision of the One Big Beautiful Bill Act, passed by the Republican led Congress, that bars Medicaid funding for nonprofit organizations that provide family planning services if they perform abortions and received more than $800,000 in Medicaid funds during the 2023 fiscal year.

In July, Talwani ruled that the provision amounted to a bill of attainder designed to punish Planned Parenthood for providing abortion services.

A bill of attainder is a legislative act prohibited by the Constitution that imposes punishment on a person or group without a judicial trial.

U.S. Circuit Judge Gustavo Gelpi, writing for a three judge panel appointed by former President Joe Biden, rejected that conclusion.

“The law simply does not impose ‘punishment’ as the term has been historically understood,” Gelpi wrote.

“It instead uses Congress’ taxing and spending power to put appellees to a difficult choice: give up federal Medicaid funds and continue to provide abortion services or continue receiving such funds by abandoning the provision of abortion services,” he added.

The Trump administration argued on appeal that Congress acted lawfully in restricting Medicaid funding for abortion providers following the Supreme Court’s 2022 decision overturning the nationwide right to abortion.

Talwani had also ruled that the law burdened the First Amendment rights of some Planned Parenthood affiliates that do not provide abortions by limiting their ability to associate with the broader organization.

The appeals court overturned that holding as well, narrowly interpreting the law to apply only to affiliates operating under common corporate control with organizations that perform abortions.