Dorothy, You’re Not In Kansas Anymore
Mark June 28, 2024 on your calendar as potentially one of the most significant dates in the compliance and regulatory world’s history. On that date, the Supreme Court concluded Loper v. Raimondo, overturning a 40 year old ruling – the Chevron Doctrine.
No, this is not about gas prices. This longstanding rule stated that in cases related to Federal regulations and compliance, the Courts were instructed to defer to the federal agencies’ reasonable interpretations of the law. Made sense, after all they wrote the laws and regulations, knew what they meant and would logically be the “expert” on interpretation of the rules. Somehow, SCOTUS felt otherwise. With Chevron gone, compliance and regulatory interpretations have been directed to individual Federal, State and local courts.
This decision is felt by many to be one of the most significant cases for federal health policy. It could have an impact on all areas of regulation. For example, what if an employee requests a private entrance to your practice and a private office due to anxiety? Historically, the ADA, who wrote the disability rules, would decide if this was a “reasonable request” based on the individual aspects of your business – one main agency making rules. Now that decision can be made by any and all Federal courts and every State court instead of one agency deciding the rules. Another example could be whether or not you must encrypt patient data, there could be 50 or more such decisions. It could also affect the requirement that most Affordable Care Act health plans cover preventive services and could now mean health care policies for patients, providers or insurers could differ greatly from one area to another.
Healthcare compliance may have just become as chaotic as the Mad Hatter’s world in Alice in Wonderland.
Why? SCOTUS decided that Chevron deference was inconsistent with the Administrative Procedure Act (APA), which mandates that courts exercise independent judgment when reviewing agency actions. This shift reduces the power of executive agencies, endangers numerous regulations and transfers authority from the executive branch to Congress and the courts.
The Supreme Court decision to overturn Chevron will significantly impact health policy and the health care industry at-large.
What agencies would be subject to this new world of local review? Just to name a few of importance to you:
- Centers for Medicare and Medicaid Services (CMS)
- Health and Human Services (most things health care)
- Office of Civil Rights (HIPAA)
- Equal Employment Opportunity Commission (most things HR)
- Food and Drug Administration
- National Institute of Health (healthcare policies)
- Center for Disease Control (more healthcare policies)
- Occupational Safety and Health Administration (OSHA)
- Americans With Disabilities Act
- Federal Trade Commission
- and on and on…..
The Chevron ruling may reshape health care policy, influencing how regulations are drafted, interpreted and enforced. Even more staggering, the full impact will depend on how individual courts apply new standards in specific cases. Specific examples – glasses and contact lens rules under the FTC, discrimination opinions, Federal vision plan challenges, open interpretations of the No Surprise Act, the upcoming HIPAA Omnibus Rule, Medicare’s ability to negotiate drug prices – we can go on for a while. Supreme Court Justice Elena Kagan wrote that the ruling has created a “jolt to the legal system,” and that the court has in “one fell swoop,” given “itself exclusive power over every open issue—no matter how expertise-driven or policy-laden—involving the meaning of regulatory law.” Predicted results include massive court backlogs, inconsistent rulings, variable policies based on where you practice and a significant increase in lawsuits against providers and payers.
Although prior decisions affirming regulations based on Chevron should remain going forward, courts will no longer be required to follow Federal agency positions or interpretations, potentially boosting litigants’ confidence in challenging any new rulings or regulations. Some may argue this could sometimes place providers in a better light – such as challenges to CMS reimbursement rules. If you truly believe everything you read on the internet, this may excite you. But in reality, this shift has the potential to create massive uncertainty for providers and other stakeholders in the healthcare industry.
This will likely lead to more lawsuits and potentially longer lead times for agency decisions as government lawyers work to strengthen their legal positions. It may make certain locations more or less favorable for health care company operations or expansions and could lead to a surge of litigants venue shopping for judges sympathetic to their challenges to particular agency actions. My oh my….
What can you do?
The Supreme Court’s decision fundamentally alters the dynamics of regulatory authority, making it essential doctors stay informed and proactive in responding to these developments. This situation emphasizes the importance of staying in compliance with assistance from the experts. It also means we must all stay engaged with legislative processes and advocate for clear and effective health care regulations.
Stay tuned – this is going to be a roller coaster ride!
