Next, the right of center State Policy Network features a less entertaining but well-sourced title. Their experts summarize this decision's appeal to citizens across the political spectrum.

https://spn.org/articles/chevron-overruled/

SPN EXPERTS RESPOND TO SUPREME COURT RULING IN LOPER BRIGHT ENTERPRISES VS. RAIMONDO 

 

JUNE 28, 2024 

Today, the US Supreme Court handed down a decision in Loper Bright Enterprises v. Raimondo that overrules Chevron, a precedent that has enabled federal agencies to craft regulations based on creative readings of Congressional statutes. 

The Court rolled back Chevron, which means agencies will now have less power to make regulations without explicit Congressional authorization. 

State Policy Network experts responded to this decision below, highlighting what this ruling means for states and communities across the country.  

Tony Woodlief, executive vice president at State Policy Network and a senior fellow at the Center for Practical Federalism, noted:  

“The Supreme Court’s decision should be welcomed by anyone, regardless of political party, who believes laws ought to be made by elected representatives, and not by secretive and ideologically motivated federal bureaucrats. Chevron has long been used to undermine representative government, so this is an important step towards restoring a government that is truly of, by, and for the people. Now state and local leaders who’ve been hamstrung by one-size-fits-all DC mandates will have authority to craft more suitable and beneficial policies, with greater accountability to voters for the outcomes.” 

Steve Johnson, a fellow at the Center for Practical Federalism, added: 

“Today’s Supreme Court ruling is a clear victory for those that believe unelected bureaucrats should not have the authority to make law. 

More importantly, today’s ruling needs to be a wake-up call to Congress. For far too long, Congress has shirked their responsibilities and conveniently delegated the tough job of legislating to unaccountable DC bureaucrats. Loper Bright is certainly a step in the right direction, but the real question is whether Congress will now step up and fulfill their Constitutional duty.” 

Ray Nothstine, a Future of Freedom Fellow and senior editor and writer for State Policy Network, noted:  

“One of the main problems with the Chevron doctrine is it tipped the scales in a way that aggressively favors unelected bureaucrats at the expense of the people and their elected representatives. Furthermore, Congress and our courts have ceded way too much legislative and interpretive authority to agencies. Reversing this decision is merely one step in hopefully seeing more authority from Congress and state legislators over the faceless and unaccountable government agencies ruling over us.” 

Jennifer Butler, a senior policy advisor at State Policy Network, added: 

“The Chevron doctrine undermined democratic accountability by granting unelected bureaucrats significant power to potentially circumvent Congressional legislative intent. It also obscured transparency. Chevron made it difficult for a regular citizen or even state and local governments to challenge agency decisions.  

As the media and political pundits consider the implications of this case, supporters of the Chevron doctrine will frame any limitation on deference as a ‘sky is falling’ scenario. But the truth is, one-size-fits-all governance by federal agencies harms individuals, businesses, and communities. Certain regulatory responsibilities that are currently held by the federal government can be effectively managed, and perhaps better managed, at the state level.” 

Media interested in interviewing these experts should reach out to Camille Walsh, SPN’s Media Relations Manager, at walsh@spn.org.

Morning Brew published a longform article this week teasing out healthcare implications of Chevron's downfall.

Clipped for length. Bold highlights are mine.

https://www.healthcare-brew.com/stories/2024/07/29/chevron-ruling-healthcare-industry

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The reversal of the doctrine has already come into play in at least one healthcare-related case this month, too. A federal judge in Mississippi ruled that the US Department of Health and Human Services (HHS) can’t enforce a rule banning healthcare providers from discriminating against patients based on gender identity and sexual orientation, citing Chevron’s overturning in his decision.

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Over time, Nighan said she also expects there to be a “significant increase in litigation” around policymaking. Previously, there was hesitancy to legally contest a rule that an agency had issued because it was a hard fight to win under Chevron unless the agency’s interpretation was “completely arbitrary or irrational.”

“That’s not the case anymore,” she said. “If you believe that the agency’s rule or guidance is not keeping with the interpretation of the statute, then there’s an avenue to challenge that in court that is stronger.”

Ultimately, overturning Chevron could shake up how agencies typically do business, and that may cause issues. Agencies may be less inclined to issue regulations and instead focus on more informal rulemaking, like advisory opinions, that are less enforceable than official policies, Long said.

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The ruling could also slow down the policymaking process within agencies that may try to predict which laws could face more legal challenges, and therefore, take more time to nail down regulatory details. Nighan said that the Supreme Court was aware of the potential instability this could bring, but said it would rather have the “correct” interpretation of the law, according to the high court’s majority ruling.

What are some healthcare industry policies that could be challenged in the near future?

There are specific areas experts expect will be more at risk due to this overruling.

As part of the Inflation Reduction Act that Congress passed into law in 2022, Medicare can negotiate drug prices directly with pharmaceutical companies for a select number of drugs. A number of industry players have challenged this law in court, primarily pharmaceutical companies claiming the law is unconstitutional.

Long expects there could be more of that down the road.

Other potential legal battles, she added, could target Section 1557 of the Affordable Care Act, which prohibits certain healthcare programs from discriminating against patients on the basis of race, color, national origin, sex, age, or disability.

In April, HHS issued a rule under the provision to reinstate Obama-era protections that prohibited healthcare providers from discriminating against patients based on gender identity or sexual orientation. But in July, the US District Court for the Southern District of Mississippi ruled that HHS can’t enforce the rule, citing Chevron’s overruling in the court decision.

According to Nicholas Bagley, a law professor at the University of Michigan, the FDA and Centers for Medicare and Medicaid Services have passed a number of rules likely to face legal contestation, such as a proposed FDA rule looking to regulate diagnostic tests developed in hospital and health system laboratories. He said he could see more challenges to these rules post-Chevron.

But he added that he’s not overly concerned about Chevron’s overruling, as the doctrine hasn’t been cited in any Supreme Court cases for roughly a decade. Its overruling doesn’t “change everything,” but intensifies an existing trend of increasing judicial authority over federal agencies, Bagley said. “It will make it very hard for agencies to cut through the red tape and do their jobs. This decision contributes to that—there’s no question,” Bagley said. “But it is not by itself the sole reason for concern.”

Ultimately, though, the effects of Chevron’s overturning won’t be felt immediately in healthcare, Long noted.

“This isn’t going to be something that just happens tomorrow and then it’s going to be over,” she said. “It’s something that will be long, long into the future.” 

Approaching two years since Chevron's fall, predictions of skyrocketing healthcare lawsuits have fallen flat.

For example, this panel of legal experts at Pennsylvania University's Leonard Davis Institute of Health Economics got so many facts right, but the forecast completely wrong.

Clipped for length; a very good read.

https://ldi.upenn.edu/our-work/research-updates/supreme-courts-chevron-reversal-a-seismic-shift-for-health-care-regulation/

Supreme Court’s Chevron Reversal: A Seismic Shift for Health Care Regulation

Penn Legal Experts Warn of Far-Reaching Consequences for Public Health

Hoag Levins    |    November 11, 2024

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Disruption and Fragmentation Potential

And, if you start to think about how the new concept will impact health care regulation, you begin to understand the potential scale of disruption and fragmentation in an environment in which corporate lobbying groups are working to roll back regulations.

Hoffman, who is an expert in the field of health care law, noted that just for Medicare there are thousands of final rules issued annually. “And each one of these are something that an interested party might go after,” she said. “This includes things like Medicare payment rules and Affordable Care Act (ACA) regulations which were already being challenged, like section 1557 which deals with a prohibition against discrimination on the basis of sex. What does it mean to discriminate on the basis of sex? And it also applies to health programs and activities receiving federal assistance. An agency might have interpreted that more narrowly or more broadly. It includes fraud and abuse rules, privacy rules, rules about technology, labor rules, rules about drugs and devices, and so on.”

“The looking backward at how Chevron was used might not be all that telling of what’s to come,” said Hoffman. “We’re going to see a destabilization of regulation invited in by Loper Bright—and its administrative state dismantling brethren like Corner Post and Jarkesy and Ohio v. EPA (Environmental Protection Agency)—at a scale that we don’t yet know. And there are more layers coming. And so, what does that mean for health care?”

New Tool for Industry Lobbyists

“Health care is big business and big money and what this decision puts in the hands of these big and powerful companies is the power to gum up the regulatory process,” Hoffman said. “The number one to thing about it is that these big powerful companies now have a new tool. The second major thing to think about is the fact that health care regulation is vast and complicated. And so, there are going to be a lot of handholds for these corporations to use if they want to challenge regulations.”

“Just think of the Department of Health and Human Services (HHS),” Hoffman continued. “It’s a massive agency with operating divisions and offices that include the Centers for Medicare and Medicaid Services (CMS), the Centers for Disease Control and Prevention (CDC), the National Institutes of Health (NIH), the Indian Health Service (IHS), the Food and Drug Administration (FDA), and more. And HHS is not the only agency that regulates health care. Health care is regulated within the Treasury Department, the Defense Department, the Labor Department, and elsewhere. It is one of the most regulated fields.”

Panelist Fernandez Lynch pointed to the FDA and the complexity of its work in relation to the new ruling. “The Food, Drug and Cosmetic Act is a very broad statute filled with ambiguity, some purposeful, some not so purposeful,” she said. “The way it works is that the FDA is directed to approve a new drug if there is ‘substantial evidence of effectiveness.’ That’s the statutory language, ‘substantial evidence of effectiveness.’ The statute goes on to refer to ‘adequate’ and ‘well controlled trials.’ But what’s the definition of ‘substantial’? What’s ‘adequate’? What’s ‘well controlled’? It’s really core to what FDA does in pharmaceutical policy. Another part of the statute has to do with accelerated approval by which the agency is directed to grant use of that pathway when there is an end point that’s reasonably likely to predict clinical benefit—there’s lots and lots of discretion for the agency to interpret that.”

Ruling’s Limit

Fernandez Lynch noted that the SCOTUS ruling did attempt to limit the reach of the decision on interpreting ambiguous statutory language, particularly when Congress explicitly gave the agency flexibility to do the interpreting. “So, basically what the court said was if something is ambiguous, we shouldn’t assume that Congress meant that the agency should be the ones to get to decide, and the courts should decide,” she said. “But if Congress said, ‘we want the agency to be the ones to figure this out,’ then the courts will defer in those circumstances. For instance, people don’t seem to be especially worried that the FDA’s decisions about particular drug products are now going to be litigated heavily because that’s very clearly within the FDA’s domain of flexibility granted by Congress.”

Fernandez Lynch also pointed out, “Another big challenge of relying on the courts for these interpretations under the new ruling is that we could end up with different decisions as different circuit courts rule in conflicting ways on the same regulation. There’s also the question whether courts can issue national injunctions to put a rule on hold,” she continued. “This really raises the issue of inconsistent application of regulations across different parts of the country for some time as those rules are being resolved,” she said. “That actually puts pressure on the Supreme Court to take these cases and resolve them. But that, in turn, means there are going to be more cases moving up through the federal courts and more requests for the Supreme Court, so the volume of that will increase as well.”

Commonly framed as bureaucrats losing power to the courts, this view has proven short-sighted, as well. 

True, Chevron was applied within SCOTUS. However, it does not follow that its impact (and now its absence) is limited to the Court. Far from it. Instead, Congress is put on notice that it's responsible to make clear law (as Heritage Foundation noted).

In addition, I expect even the possibility of court losses will have a chilling effect upon bureaucratic rulemaking, with the result of more freedom for patients and clinicians. (Reference the thousands of rules promulgated per year by Medicare, cited above.) 

Which is not to say the vultures lawyers aren't circling for suits. 

Clipped lightly for length.

https://www.doctorsmanagement.com/blog/a-new-chapter-in-statutory-interpretation-what-it-means-for-healthcare/

A New Chapter in Statutory Interpretation: What It Means for Healthcare

Sean Weiss, Partner & VP of Strategic Litigation Services    |    April 9, 2025

I’ve always been a fan of history, especially the 80s, with its vibrant energy, iconic figures, and cultural moments. But today’s story isn’t about retro tunes or neon fashion; it’s about a major Supreme Court decision that takes us back to 1984 and reshapes how healthcare regulations are interpreted. It is my hope that this analysis shows that by restoring the courts’ role in interpreting laws, providers can now more effectively challenge agency actions. When providers follow established clinical guidelines and document their work in good faith, they are well-positioned to defend against claims of overpayment or misinterpretation of statutory mandates.

On June 28, 2024, in a 6–3 decision in Loper Bright Enters, Inc. v. Raimondo and Relentless, Inc. v. Department of Commerce, the Supreme Court turned the page on a decades-old rule. By overturning the long-standing Chevron deference, a principle that let federal agencies like HHS and CMS interpret laws in their favor the Court has declared that it’s the courts’ job, not the agencies’, to decide what Congressional statutes really mean.

Rethinking Agency Deference

Under the old Chevron doctrine (from Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)), courts would follow a two-step process when reviewing an agency’s interpretation of a law:

Step One: Is Congress Clear?
If Congress’s intent was obvious, the court simply applied the law as written.
Step Two: Ambiguity Means Deference

If the law was unclear, courts would lean on the agency’s interpretation as long as it was a reasonable one.
This approach, particularly during formal rulemaking processes under the Administrative Procedure Act (APA), meant that agencies had broad latitude to set rules. But that’s all changed.

The New Approach: Judicial Independence

The Supreme Court’s new ruling makes it clear: the APA requires courts to step in and interpret the law themselves, using their own judgment rather than deferring to agency explanations. Courts must now answer all relevant legal questions without relying on an agency’s view of ambiguous language (see 5 U.S.C. § 706). In simple terms, even if a law gives agencies some wiggle room, it’s up to the courts to figure out what that really means ensuring that the law reflects Congress’s true intent.

While agencies can still offer their expert opinions to help inform the court, those opinions are no longer binding. This shift is especially significant for healthcare providers facing tough reimbursement decisions.

Healthcare Compliance Audit Services

What This Means for Healthcare Reimbursement
This decision is set to shake up how reimbursement issues are handled, especially in cases involving overpayment demands and appeals. Here are a few key areas to watch:

1. Overpayment Demands and Statistical Extrapolation
Medicare contractors and the Office of Inspector General (OIG) have often used statistical sampling methods to claim that providers have been overpaid sometimes by huge amounts. These methods are only allowed when there’s a “sustained or high level of payment error” or if attempts to fix the error have failed (42 U.S.C. § 1395ddd(f)(3)). With the new ruling, providers now have stronger grounds to challenge these statistical methods, as courts will independently review whether these practices truly show a systemic problem.

2. Settlement Opportunities
The decision might encourage Medicare contractors to settle overpayment disputes rather than risk lengthy litigation. Federal law allows the HHS Secretary to negotiate settlements that resolve projected overpayments based on less-than-perfect statistical samples, as long as the provider agrees not to contest the claim. If providers can limit the government’s reliance on questionable extrapolations, we could see more settlements that fairly reflect the real situation.

3. Self-Audits and Refund Requirements
CMS’s rules for identifying and returning overpayments set out in the “Reporting and Returning of Overpayments” rule from February 12, 2016 (81 Fed. Reg. 7654, codified at 42 C.F.R. pts. 401, 405) may now face more scrutiny. Providers can argue that the criteria for what counts as “credible information” and an “identified overpayment” should be determined by the courts, not just by agency rules. This could mean more flexibility for providers when it comes to self-audits and refunds.

4. Overpayment Appeals
Perhaps the most immediate impact is in the appeals process. With less deference to CMS’s interpretations, providers can expect a more balanced review of reimbursement disputes. This change empowers providers to demonstrate that they have met all necessary medical requirements even if they haven’t strictly followed every piece of agency guidance. If a rule that CMS relied on is later challenged or overturned in court, providers may have a better chance of winning their appeal.

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Navigating the New Landscape
The Supreme Court’s June 28, 2024 ruling is a game changer. By shifting the power to interpret laws back to the courts, this decision opens the door for healthcare providers to challenge unfavorable reimbursement decisions and overpayment recovery demands that were once protected by Chevron deference. While the future impact on day-to-day reimbursement remains to be fully seen, one thing is clear: providers now have more tools at their disposal to ensure that statutory mandates truly reflect the intent of Congress.

Providers should consider working with legal counsel to review and adjust their compliance and reimbursement strategies in this new era of judicial independence. The ultimate goal is to foster a more balanced system where the law is interpreted fairly, benefiting both providers and patients.