This past summer, the U.S. Supreme Court, with its Loper Bright Enterprises v. Raimondo decision, put an end to the principle that federal courts should defer to federal regulatory agencies’ expertise when deciding on ambiguous statutes.
The 6-3 case, in which the court’s conservatives overturned the so-called Chevron doctrine, was a blow to the power of federal agencies to interpret the law and administer complex policies.
The SCOTUS decision was handed down on June 28. That same day, New Jersey-based Hackensack Meridian Health filed suit against the U.S. Department of Health and Human Services over its calculation of Medicare reimbursement for some types of hospital payments.
That suit was perhaps the first of many challenges, and, perhaps, reversals of existing regulations in healthcare and elsewhere, with many predicting widespread ripple effects.
Indeed, other healthcare organizations may also challenge “aggressive interpretations of statutes” in court, according to attorneys at the legal firm Arnall Golden Gregory.
We spoke recently with Brian Stimson, a healthcare partner at Arnall Golden Gregory, who formerly served as HHS acting general counsel, and Jason Bring, chair of the firm’s healthcare litigation team.
They offered their perspectives on a post-Chevron doctrine world – and what healthcare organizations can now expect from future rulemaking at HHS, what Congress’s role might be and why federal programs will mostly not change day-to-day.
Q. Does the Loper Bright ruling impact the day-to-day operations of federal healthcare programs?
A. Probably not, because Loper Bright is concerned with the interpretation of federal statutes. It will undoubtedly affect interpretations of federal statutes in agency rulemakings. But, the day-to-day operations of federal programs should not change absent a new rule or a successful court challenge to an existing rule.
Q. Will this change how Congress and HHS agencies approach lawmaking and rulemaking, respectively?
A. Loper Bright may prompt Congress to draft legislation containing broad, clear and express delegations of authority. Under Chevron, the federal courts treated congressional silence as a delegation of rulemaking authority to the agency.
Congress could enact statutes that were silent on important questions, knowing that the agencies would answer the questions. Now, if Congress wants agencies to answer such questions, it must say so.
Loper Bright may affect HHS agency rulemaking as well. It is no longer sufficient for an agency to publish a rule setting forth an interpretation of a statute that is not arbitrary or capricious. The agency must now show that its interpretation is the best one.
After Loper Bright, the courts will give only Skidmore deference to agency rules [a doctrine handed down in the 1944 Supreme Court case Skidmore v. Swift & Co., where courts consider an agency’s reasoning when deciding regulatory validity], meaning they will give interpretations of statutes weight based on their inherent power to persuade.
Agencies may redouble their efforts to write preambles that explain interpretations of statutes as persuasively as possible.
Q. What risks and opportunities are now presented for organizations regulated by HHS agencies?
A. Regulated entities will now have more opportunities to challenge agency rules premised on aggressive interpretations of statutes.
The Supreme Court held in [Corner Post, Inc. v. Board of Governors of the Federal Reserve System] that regulated entities may challenge rules within six years of sustaining harm, versus six years from publication of the rule.
The new trigger for the statute of limitations [under the Corner Post ruling] exposes more rules to potential challenge. Plus, with Chevron gone, regulated entities are on more equal footing in administrative law challenges, especially in courts that are skeptical of the administrative state.
The risk, however, is that regulated entities will become less selective in the challenges they bring, and courts will simply reach the same outcomes under the canons of construction that they would have reached under Chevron.
If that occurs, regulated entities may find themselves stuck with unhelpful outcomes that cannot be reversed through rulemaking.
Q. Will we now see more administrative law challenges to agency rules and policies?
A. An increase in the total number of challenges to agency rules and policies is certainly possible for the reasons stated.
But it is unclear whether an increase in the number of challenges will translate into an increase in the win-loss ratio for regulated entities. The agencies are often correct on the law and will still receive Skidmore deference.
Plus, administrative law challenges cost hundreds of thousands of dollars. Considerations such as cost, venue and case selection are all likely to bear on the number and outcome of challenges to agency rules.
Andrea Fox is senior editor of Healthcare IT News.
Email: afox@himss.org
Healthcare IT News is a HIMSS Media publication.