Supreme Court decision could lead to legal challenges to payments, risks to healthcare regulation

Editor's Note

Food and Drug Administration (FDA) regulations are at risk, and legal challenges to Medicare payments are likely to rise following the Supreme Court’s overturning of the 40-year-old legal precedent Chevron deference, according to a June 28 report in Becker’s Hospital Review.

"Chevron deference is the principle that when disputes arise over regulation of an ambiguous law, judges should defer to federal agency interpretations so long as those interpretations are reasonable," Becker’s reports. Writing for the majority, Chief Justice John Roberts deemed the framework is “unworkable” in part because it allowed agencies to change course without input from Congress.

As for the decision's impact, Becker’s cites an article written prior to the decision from Suhasini Ravi, now a health policy director at the White House. In October, she emphasized that overturning the precedent could have significant impact due to agencies' need for expertise in emergencies and evolving technologies.

Citing a May Politico report, Becker’s also notes that experts also expect more legal challenges to Medicare payments and a need for Congress to be more explicit in legislation to guide agencies like the Department of Health and Human Services.

Finally, Becker’s cites an amicus brief written by Reshma Ramachandran, MD, an assistant professor of medicine at Yale, who warned that many pandemic-era and FDA regulations could be jeopardized by Chevron's overturning. Various health organizations, including the American Cancer Society, argued that overturning Chevron could disrupt the administration of federal programs crucial to public health, affecting nearly half the US population.

Opponents of Chevron argued that it biased litigation in favor of government regulators and allowed agencies to change rules with each new administration, forcing judges to defer to these shifts.