Last summer, the U.S. Supreme Court, with its Runner Bright Enterprises vs Raimondo decision, ending the principle that federal courts must rely on the expertise of federal regulatory agencies when deciding ambiguous laws.
The 6-3 case, in which the court’s conservatives called the Chevron Doctrinewas a blow to the power of federal agencies to interpret the law and implement complex policies.
The Supreme Court decision was made on June 28. The same day, New Jersey-based Hackensack Meridian Health has filed a lawsuit against the U.S. Department of Health and Human Services on the calculation of Medicare reimbursement for certain types of hospital payments.
That lawsuit may have been the first of many challenges and perhaps reversals of existing regulations in health care and elsewhere, with many predict widespread ripple effects.
According to attorneys at law firm Arnall Golden Gregory, other health care institutions can also challenge “aggressive interpretations of the law” in court.
We recently spoke with Brian Stimson, a healthcare partner at Arnall Golden Gregory, who previously served as acting general counsel to HHS, and Jason Bring, chair of the firm’s healthcare litigation team.
They offered their perspectives on a post-Chevron world, what health care organizations can now expect from future rulemaking at HHS, what the role of Congress might be, and why federal programs largely won’t change on a day-to-day basis.
Q. Does the Loper Bright ruling have any implications for the day-to-day operations of federal health care programs?
A. Probably not, because Loper Bright is in the business of interpreting federal law. It will undoubtedly affect the interpretation of federal law in agency regulations. But the day-to-day operation of federal programs should not change without a new rule or a successful challenge to an existing rule.
Q. Will this change the way Congress and the HHS agencies approach legislation and rulemaking, respectively?
A. Runner Bright can prompt Congress to legislate with broad, clear, and explicit delegations of authority. Under Chevron , the federal courts treated Congress’s silence as a delegation of rulemaking authority to the agency.
Congress could pass laws that said nothing about important questions, knowing that the agencies would answer the questions. If Congress wanted the agencies to answer such questions, it should say so.
Runner Bright could also affect the rulemaking of HHS agencies. It is no longer enough for an agency to publish a rule establishing an interpretation of a statute that is not arbitrary or capricious. The agency must now demonstrate that its interpretation is the best one.
After Loper Bright, the courts will only Skidmore Reverence to the agency’s rules (a doctrine established in the 1944 Supreme Court case Skidmore v. Swift & Co., in which courts consider an agency’s reasoning when determining the validity of regulations), meaning that they will give weight to interpretations of statutes based on their inherent persuasiveness.
Agencies can redouble their efforts to write introductions that explain the interpretation of laws as persuasively as possible.
Q. What risks and opportunities now present themselves for organizations overseen by HHS agencies?
A. Regulated entities now have greater ability to challenge agency rules based on aggressive interpretations of statutes.
The Supreme Court ruled in the case (Corner Post, Inc. v. Board of Governors of the Federal Reserve System) that regulated entities may challenge regulations within six years of the time the harm occurred, rather than six years after the rule was published.
The new trigger for the limitation period (under the Corner post ruling) exposes more regulations to potential challenges. Moreover, with Chevron gone, regulated entities are on an equal footing in administrative challenges, especially in courts skeptical of the administrative state.
However, there is a risk that regulated entities will become less selective in the proceedings they bring, and that courts will simply reach the same outcomes on the basis of the rules of interpretation as they would have reached under Chevron.
If this happens, regulated entities may face adverse outcomes that cannot be reversed through regulation.
Q. Will we now see more administrative legal challenges to agency rules and policies?
A. An increase in the overall number of challenges to the agency’s rules and policies is certainly possible for the reasons mentioned.
But it is unclear whether an increase in the number of challenges will lead to an increase in the win-loss ratio for regulated entities. The agencies are often right about the law and will still receive Skidmore deference.
In addition, administrative challenges cost hundreds of thousands of dollars. Considerations such as cost, location, and case selection are all likely to affect the number and outcome of challenges to agency rules.
Andrea Fox is Editor-in-Chief of Healthcare IT News.
Email address: afox@himss.org
Healthcare IT News is a publication of HIMSS Media.