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Legal and policy experts on a KFF webinar explained how the Supreme Court’s recent decision to overturn the Chevron precedent will impact legislators, agencies, and courts as they interpret and enforce policies in the health care realm.
When the Supreme Court overturned the longstanding Chevron doctrine on June 28,1 it threw into uncertainty the rulemaking and interpretation processes for laws, including those affecting health care. According to legal and policy experts speaking at an event hosted virtually by KFF, this decision could have major implications for health policy, including more legal challenges to health-related regulations.
To begin, Kaye Pestaina, JD, vice president and director of the program on patient and consumer protections at KFF, explained that Chevron deference was a framework used to make decisions when regulations were challenged in court, which usually resulted in the court deferring to the issuing agency and upholding the regulation. Now, the decision in Loper Bright Enterprises v Raimondo means that courts need to apply their own judgment to decide the interpretation, with no new framework on how to exercise this judgment.
A decision hailed by some as curbing federal overreach may instead have the effect of locking regulations into a structure that cannot keep up with changing times. | Image Credit: © fotofabrika - stock.adobe.com
As a result of no longer receiving deference, agencies will likely become more cautious and exhaustive as they draft and update rules, according to Cindy Mann, JD, partner at Manatt Health and former deputy administrator of CMS. While the courts should respect explicit delegations of authority, there are many statutes containing less clear language like “actuarial soundness” that could be the target of new litigation.
Congress, too, will need to be more specific when writing legislation, said Dean A. Rosen, JD, partner at Mehlman Consulting and former chief health care advisor to Senate Majority Leader Bill Frist. But this is a challenge both politically, because some ambiguity in amendments has been used as a negotiating strategy, and pragmatically because legislators and staff aren’t always experts in technical issues like actuarial value. He predicted that it will be easier to achieve specificity when it comes to bipartisan legislation, whereas more divisive or technical areas will be more difficult to legislate around.
In addition to the impact on the policy-making progress going forward, the overturn of Chevron could provide an avenue for several rules to be struck down or constrained. Laurie Sobel, JD, associate director of women’s health policy at KFF, flagged the following as vulnerable:
Pestaina also noted her concern that the regulations surrounding the Affordable Care Act’s health insurance marketplaces, including risk adjustment and premium tax credit eligibility, may be susceptible to challenge. Striking down those rules could upset the whole framework of access to health coverage.
One area that most likely won’t be affected by the ruling is state Medicaid waivers, including work requirements, according to Mann. She predicted that we will continue to see contention and litigation around these efforts, but Chevron deference was mostly applied to regulations with notice and comment period, rather than the regulatory guidance involved with waivers.
The panelists discussed how the health policy world will react to this decision, including by writing in language to protect legislation against challenges.
“I think there will be some mechanisms that likely develop over time as you see Congress trying to protect legislation, just as we’ve seen things like severability being used as standard form,” Rosen said. “But I think in some of these cases, there’s such a diversity of potential laws and regulations that it’s also going to be difficult.”
Moderator Larry Levitt, executive vice president for health policy at KKF, noted the irony that the Loper Bright decision, hailed by some as curbing federal overreach, may instead have the effect of locking regulations into a structure that cannot keep up with changing times.
“We cannot ossify the program rules,” Mann said. “We’ve got to come to some ability to have rules evolve and modernize as the world changes without Congress stepping in every 5 minutes to adjust its statutory pronouncements.”
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