What Does the End of Chevron Deference Mean for Healthcare Law?

Much has been made of the recent end of Chevron deference and the impact it may have on the authority of federal regulations and the power of federal agencies. As the healthcare industry is heavily regulated by multiple federal agencies, administrations, and departments, it is natural to ask what impact the end of Chevron deference may have on healthcare providers and suppliers.

Chevron deference, named after the landmark 1984 Supreme Court case Chevron v. Natural Resources Defense Council, was a legal doctrine that generally required federal judges, where a statute was unclear, to defer to the interpretation of the applicable federal agency, even where the judge would have made a different decision on their own. In the recent case Loper Bright Enterprises v. Raimondo (“Loper”), the Supreme Court ended Chevron deference, finding that it was contrary to the mandate in the federal Administrative Procedures Act (“APA”) that judges exercise independent legal judgment. The Court also recognized that federal agencies have no special expertise in statutory interpretation, often change their interpretations, and are particularly unsuited for deference in matters involving the scope of the agency’s own power.

Because the decision in Loper is based on the APA, disputes handled under the APA are most directly affected. In these disputes, federal judges are no longer required to defer to the interpretation of the federal agency, but must exercise independent judgement. Disputes not handled under the APA – such as most of the disputes under Medicare, which are governed by the Social Security Act (“SSA”) – may be less directly affected. While Medicare disputes are technically not subject to the APA and therefore to Loper, portions of the APA are based on portions of the SSA and there is some support for the position that that same rules should apply to both. Therefore, Loper may be applicable in some Medicare disputes. It is important to note that this only applies to disputes before federal judges. The agency itself and its contractors are generally still bound by their own regulations during the often-lengthy Medicare administrative appeals process.

However, even where Loper applies, judges are not required to disregard the agency’s position and may still find it persuasive. The Supreme Court in Loper recognized that federal agencies may have valuable technical expertise in the subject matter they regulate, and that long-standing agency interpretations carry more weight than those that change frequently. Judges are no longer required to agree with the agency, but they can still listen to and agree with the agency. In cases involving highly technical matters or decades-old policies, the agency may still be likely to prevail. Agency rules expanding the agency’s power or policies that change frequently may be more vulnerable. Therefore, the impact of Loper on the healthcare industry is likely to be highly dependent on the nature of individual disputes, but may be considerable where an agency interpretation of an unclear statute cannot withstand independent judicial evaluation.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation and structuring telemedicine and provider arrangements. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.