Chevron Deference and Its Impact on the Health Care Industry

On January 17, 2024, the United States Supreme Court heard oral arguments on two cases that could have potentially far-reaching impacts on the interpretation of powers given to administrative agencies concerning their regulatory authority. Specifically, the Court will be considering the “Chevron Doctrine” which requires courts to defer to the judgment of administrative agencies when dealing with vague or ambiguous statutes. Named after the landmark U.S. Supreme Court case Chevron U.S.A. v. Natural Resources Defense Council, Inc., the Chevron Court held that when a statute is ambiguous, deference to the agency’s interpretation must be given so long as the agency’s determination is not unreasonable, or that Congress has not spoken directly to its precise issue. Although it is impossible to predict how the Court will rule with any degree of certainty, given its conservative make-up, the likely outcome may be outright repudiation of, or significant modifications to. Chevron deference.

How Chevron Will Impact the Health Care Industry

Chevron deference has had significant implications for the healthcare industry, as it demands that courts interpret and defer to administrative decision-making regarding implementing and enforcing various healthcare-related issues. Agencies under the oversight of the United States Department of Health and Human Services, such as the Centers for Medicare and Medicaid Services (CMS), have created an entire ecosystem of rules, regulations, advisory opinions, and guidance that far exceed the current limits of the statutory language passed by Congress with regards to the implementation of the federal government’s taxpayer-funded health care system. In the years since Chevron was decided, agencies like CMS have had relatively free reign to amend their programs, including their rules and regulations, without the need for prior congressional approval. If the Court were to curtail Chevron in any significant way, it would make it significantly easier for interested parties such as health care providers, and associations of such providers, to challenge agency regulations and other determinations, thereby ending the practice of showing judicial deference to reasonable interpretations of current health-care-related statutes.

Where Do We Go From Here?

Overturning Chevron, or significantly reducing the deference given to administrative agencies, could unleash a flood of federal litigation targeting the regulatory power afforded to them in the absence of an  express grant of authority by Congress. Depending on the Court’s reasoning, these cases may provide a roadmap for parties to challenge an agency’s prior determinations and any legal authority they may have relied on. If Chevron is overturned or weakened, it is not known what, if any, that such a decision would have on New York State administrative law. We will continue to carefully monitor the situation before the Court and provide our readers with any updates.

For more information, please contact David R. Ross, Esq., Shareholder, at dross@olaw.com or at (518) 312-0167. Colin Green, Law Clerk, contributed to this article.