The United States Supreme Court has recently made a landmark decision to overturn the Chevron doctrine, a legal principle that had guided how courts interpret federal regulations for over 40 years.
This ruling, delivered on June 28, 2024, is expected to have significant repercussions for healthcare policies and regulatory frameworks across the nation.
In a 6-3 vote, the Supreme Court ruled in the case of Loper Bright Enterprises v. Raimondo, stating that courts are no longer required to defer to federal agencies’ interpretations of ambiguous statutes.
Under the Chevron doctrine, courts typically upheld agency interpretations unless they were unreasonable. With this ruling, courts must now apply their own judgment without relying on agency expertise, which could lead to increased litigation and uncertainty in regulatory processes.
Legal experts warn that this shift will complicate the rulemaking landscape for healthcare agencies such as the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS). The absence of Chevron deference means that healthcare regulations may face more legal challenges, potentially leading to a patchwork of inconsistent rulings across different jurisdictions.
The implications of this decision are profound.
Experts predict a surge in litigation challenging existing healthcare regulations, including those related to Medicare reimbursement and coverage determinations under the Affordable Care Act (ACA). For instance, without Chevron’s protective framework, providers may find it easier to contest CMS’s decisions regarding reimbursement limits and coverage eligibility for services and medications.
Kaye Pestaina, JD, vice president at KFF, noted that this ruling could lead to a more cautious approach by agencies when drafting new rules. Agencies will likely become more exhaustive in their rulemaking processes, she stated, emphasizing that Congress will need to be more precise in its legislative language to avoid ambiguity that could invite legal challenges.
The ruling opens the door for various stakeholders—including healthcare providers, insurers, and patient advocacy groups—to challenge agency decisions that they believe overstep legal boundaries or misinterpret statutes. Legal analysts foresee an increase in cases targeting regulations that were previously upheld due to Chevron deference.
Laurie Sobel, JD, associate director at KFF, highlighted specific areas vulnerable to litigation, including risk adjustment rules under the ACA and premium tax credit eligibility criteria. Striking down these regulations could disrupt access to health coverage for millions, she warned.
As the healthcare landscape braces for potential upheaval following this Supreme Court decision, stakeholders are left navigating an uncertain regulatory environment. The elimination of Chevron deference may lead to more fragmented health policies and increased scrutiny of agency actions.
The full impact of this ruling will unfold as courts begin applying this new standard in upcoming cases, reshaping the relationship between federal agencies and the healthcare industry in profound ways.
