On June 28th, the Supreme Court ruled to overturn the “Chevron” deference doctrine (in Loper Bright Enterprises v. Raimondo). The 1984 Chevron defense directs the nation’s courts to defer to a government agency’s interpretation of statute under circumstances where the law was vaguely written. The June 28th ruling shifts the deference away from the executive branch to the judicial branch when congressional intent is implicit.
Analysts and legal scholars agree that this will have dramatic consequences for health care, calling into question government rules on everything from nursing home care to clinical lab regulation to coverage mandates under the Affordable Care Act (ACA).
Why will this shift affect so many aspects of health care? First, federal laws are often written vaguely to provide agencies flexibility to implement the changes as needed. That vagueness allows technical and scientific experts to make real-world policy decisions on how to implement what Congress passes. So, 50+ years of healthcare policy in action is now open to challenge, re-writing, and nullification.
Second, the ruling will unleash a torrent of litigation. One friend of the court brief filed by the American Cancer Society and other organizations stated that this ruling would open a “litigation tsunami” on even long-settled healthcare policy. This could leave regulation with even more holes depending on rulings in different local, state, and federal courts – causing providers, insurers, and other healthcare players to struggle with compliance.
Third, the ruling could lead to more uncertainty and less stability for players in the healthcare system. For example, even simple things like the government deciding what to pay hospitals or physicians could be subject to long legal battles that could disrupt payments and patient care.
Lastly, this could significantly delay any enactment of new policies by the agencies and Congress. For example, scholars are pointing out that the FDA is extremely risk adverse and this ruling could significantly delay the release of new drugs and treatments. Congressional experts are also warning that this could slow the Congressional draft/legislating process even more as Congress would have to take more time drafting their legislative language to avoid future legal challenges. This could also pose a significant threat to those issues that need faster rulings – like supplemental appropriations (e.g., funding for things like the war in Ukraine) or regulations surrounding use of Artificial Intelligence (AI).
We will continue to watch as things unfold, but it is extremely likely that new lawsuits will be filed to stop the nursing home staffing rule, the LDT lab rule, and price negotiations for Medicare drugs.