Courts become the new health policy arena
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If courts weren't already exerting outsized influence over health policy, they're much closer to being final arbiters now that the Supreme Court has scrapped the decades-old doctrine that gave the Food and Drug Administration, Centers for Medicare and Medicaid Services and other health agencies the power to interpret vague or ill-defined laws.
Why it matters: Judges could get the final say on Medicare payment rates, drug and device regulation and even what constitutes a public health emergency.
The big picture: We've already seen courts shape the rules of the road on matters like access to abortion pills, surprise billing disputes and how certain hospitals access discounted drugs.
- But experts say that Friday's total repeal of the "Chevron deference" doctrine means that the courts, and not the executive branch, will get to interpret ambiguities in laws.
- "This is only going to hasten the trend that we're already seeing" of judges setting aside regulations, said Zachary Baron, director of Georgetown University's Health Policy and the Law Initiative at the O'Neill Institute.
In the short run, the decision will render rulemaking far less predictable, which could have a destabilizing effect on drug and device manufacturing, major health providers and public health efforts.
- It also followed a separate ruling by the high court that weakened agencies' in-house enforcement tribunals, which could have major implications for Medicare and other big public health programs.
Between the lines: Justice Elena Kagan's dissenting opinion laid out some of the potentially strong consequences for health care.
- Medicare payments to hospitals are adjusted based on geographic area. But that "could be as large as a multi-state region or as small as a census tract," Kagan wrote. The ruling takes discretion away from regulators who gather data on the effects of using different definitions.
- "Congress knows the Department of Health and Human Services can do all those things — and that courts cannot," Kagan wrote.
The decision opens the door to a new wave of legal challenges to high-profile political issues like abortion pills and Affordable Care Act preventive services requirements, said Larry Levitt, executive vice president for health policy at KFF.
- Technical regulations governing public health and provider payment that rely on agency wonks to interpret federal statute could also be easier to challenge now.
- One tempting target could be a recent requirement that home health agencies pass through 80% of their revenue to their care staff, said Kelly Cleary, an Akin attorney and former deputy general counsel at HHS.
- "That is an example of a policy that is based on a very creative reading of a statute," she said. "I think it's going to be very vulnerable."
The decision won't affect challenges to Medicare drug price negotiations that argue the whole law is unconstitutional, Levitt said. But certain ways the Biden administration implements the negotiations could be vulnerable.
- Case-by-case drug and device approvals also likely won't be affected by the decision, said Gerald Masoudi, a partner at Covington and former FDA chief counsel. But questions like what constitutes a "breakthrough" technology that's subject to accelerated reviews could be litigated.
On the whole, the decision will slow down the policymaking process significantly, experts say.
- Congress, which has struggled to do its basic job of keeping the government open year to year, will need to craft more precise and technical legislation.
- Federal regulations, already sometimes more than 1,000 pages, will get longer as agencies document their thought processes even more meticulously.
- And parties challenging health policies in court will have even more incentive to bring cases before judges they think will be sympathetic to their cause.
Yes, but: Courts won't completely disregard agencies' technical expertise, said Stuart Gerson, an attorney at Epstein Becker Green.
- Agencies can still persuade a court through policy and scientific arguments that their regulations correctly interpret the law, under a legal principle known as Skidmore deference.
- A court will still have to "rely, to a significant degree, though not to an exclusive degree, on what agency experts are telling it" about whether a policy is arbitrary or not, Gerson said.
- And just because a rule is challenged doesn't mean the court will find it invalid, said Sheila Lynch-Afryl, a senior analyst at Wolters Kluwer, pointing to a 2022 decision that upheld how HHS applied Congress' formula for calculating safety-net hospital payments.
What we're watching: Whether the decision kicks off an exodus of scientists and regulators from health agencies.
- "Most people go to work in government in order to get things done. And to the extent it's harder to get anything done, it'll be a less attractive path for top experts," KFF's Levitt said.
Tina Reed contributed reporting.
