By: David Ostrowsky
 

For the past forty years, federal agencies have had considerable latitude to interpret and enforce regulations and subsequently advance regulatory initiatives. Per the precedent established in the Supreme Court’s 1984 decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, courts have had to defer to federal agencies regarding legal challenges over ambiguously written laws passed by Congress. The rationale was as follows: The public servants employed by the federal agencies, whether they be scientists, engineers, law enforcement officials, economists, or experts in another field, have more specialized expertise in the given matter – even more so than Supreme Court justices -- and should thus be accountable for implementing the law. But effective late last month, the High Court, believing that unelected government officials should not wield such tremendous influence, overturned that precedent, thus yielding unprecedented power to the courts to use their own discretion in interpreting laws – many of which pertain to the country’s healthcare ecosystem.

What this landmark ruling fully entails for patients, providers, and insurance companies may not be known for months, if not years. But the general consensus is that this development is likely to significantly muddle an American healthcare system already riddled with systemic flaws and inefficiencies. On a micro level, heretofore relatively straightforward functions such as determining rates to pay physicians for treating patients on Medicare could become ensnared in drawn-out legal conflicts. On a grander scale, even the gold standard of all federal healthcare agencies, the Food and Drug Administration (FDA), could pause in drafting a new regulation (i.e., one pertaining to consumer safeguards for patients or medication efficacy) out of concern that the courts will overrule it. Meanwhile, Congress could very well take longer to flesh out legislation in order to evade subsequent legal challenges. In other words, it is a frightening possibility that for an incalculable number of Americans who take medications on a daily basis, many of whom have limited resources at their disposal, significant delays could be forthcoming. Perhaps, another long-term result may be that there are significantly fewer federal-scale healthcare regulations intact and that laws vary by state, or even municipality. More specifically, one circuit could uphold a regulation from the Centers for Disease Control and Prevention (CDC), while eight or nine other circuits could assume disparate views.
 

In a sense, this seminal ruling on administrative agencies is in line with the Supreme Court’s recent track record – after all, it has overturned landmark precedents in each of the last three terms: on abortion access in 2022 and on affirmative action last year. But nevertheless, now that Chevron has been overturned, and the courts, rather than administrative agencies, will be charged with interpreting many healthcare statutes that Congress drafted, the ripple effects across the industry could be profound. Whether it be something as generic as which medical services are required to be covered under a group’s self-insured health plan or more specific measures such as a provision of the No Surprises Act (NSA) or interpretation of the Pregnant Workers Fairness Act (PWFA) or the FDA approval of a medication used for abortions, many Americans will face new hurdles in accessing medical services. As if the barriers weren’t daunting enough already, ensuing legal battles could indeed add further strain on both patients and providers.
 

Stay tuned.