Tuesday, July 16, 2024

Federal Healthcare Agencies Impacted as Supreme Court Overturns Chevron Deference

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In a 6-3 decision, the U.S. Supreme Court overturned the Chevron deference, reducing federal healthcare agencies’ power to interpret and enforce regulations. This significant ruling changes the long-standing precedent requiring courts to defer to federal healthcare agencies’ interpretations of ambiguous laws if deemed reasonable.

In the case of Loper Bright Enterprises v. Raimondo, combined with Relentless v. Department of Commerce, the Supreme Court reversed the 1984 Chevron v. Natural Resources Defense Council decision. Justice Neil Gorsuch, in a concurring opinion, emphasized the finality of this decision.

Without Chevron, courts are no longer obligated to defer to agency interpretations, instead assessing their persuasiveness. This shift is expected to bring more scrutiny to federal healthcare agencies’ regulatory actions, especially when advancing ambitious policies. However, Chief Justice John Roberts clarified that past rulings based on Chevron will remain intact under statutory stare decisis.

Federal Healthcare Agencies Face Increased Scrutiny Following Supreme Court Ruling

Healthcare attorney Richard Hughes IV noted the increased scrutiny on federal healthcare agencies like the Centers for Medicare & Medicaid Services, particularly regarding provider reimbursement cuts and drug pricing regulation. Kelly Clearly, a former HHS Deputy General Counsel, highlighted the need for agencies to demonstrate their interpretations are not only permissible but optimal.

The Biden administration had argued for agency expertise in resolving statutory ambiguities, but the court’s majority disagreed, asserting judicial branch competence in interpreting laws. Experts at Georgetown University’s O’Neill Institute for National & Global Health Law warned of significant consequences, calling the decision an attack on federal healthcare agencies’ ability to address pressing policy challenges.

Healthcare Agencies

Ruling Shifts Regulatory Power to Courts, Raising Concerns Over Public Health and Safety

Some believe the ruling will remove burdens on providers and increase accountability in judicial reviews, promoting stability and clarity in the law. However, liberal Justice Elena Kagan, in her dissent, criticized the decision for its potential to disrupt regulatory efforts crucial for public health and safety.

The effects of this ruling may not be immediate, but legal challenges to regulatory rules are expected to increase, potentially limiting federal healthcare agencies’ adaptability to new technologies like artificial intelligence. This landmark decision shifts the responsibility of interpreting statutory ambiguities from agencies to the courts, altering the landscape of federal regulation.


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Resource: Fierce Healthcare, June 28, 2024

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