Supreme Court Decision Alters Standard for Court Review of Agency Interpretations

On June 28, the Supreme Court overturned a longstanding doctrine known as “Chevron deference” that required federal courts to defer to reasonable federal agency interpretations of statutes that are silent or ambiguous. This standard allowed subject matter experts within federal agencies to make regulatory decisions about program and policy details, within the scope of their authority granted by Congress. With it no longer in place, many policy decisions will shift from agency technical experts to federal judges.

This decision touches all federal agencies and programs, including Medicare. But there are no immediate policy or program impacts; any challenges to new or existing regulations must first go through the courts. An increase in such lawsuits is expected. As discussed below, this could lead to more rules being overturned, a patchwork of legal decisions, and slower and less effective policymaking.

In the post-Chevron landscape, federal rules will still have the force of law. But lawsuits challenging those rules will have a greater likelihood of success now that courts will not have to give particular weight to agency decisions and expertise.

Importantly, the Supreme Court did not replace the Chevron doctrine with another test. Absent that level of specificity, it is not immediately clear how judges will go about their review of federal regulations. Until a new standard emerges, it may be difficult for agencies to implement and interpret laws in a way that can withstand a legal challenge.

The lawsuits will also lead to inconsistent rulings as courts draw their own conclusions about federal policy technicalities. The resulting minimization of agency knowledge, along with the lack of a unified review framework, will create a patchwork of decisions across the country and uncertainty among stakeholders regarding compliance with contested regulations.

Congress could intervene and codify the Chevron deference doctrine, but this is unlikely; some lawmakers support and welcome the ruling. Instead, Congress may respond by attempting to write clearer and more prescriptive legislation, with more explicit directives to agencies, to prevent future implementing regulations from being challenged due to statutory ambiguity. However, the infrastructure needed to accomplish this does not currently exist. Building it would be extremely time and resource intensive and would represent an enormous change in legislative drafting processes. Further, success is not guaranteed. Even the most detailed legislation could not contemplate every technical nuance, underscoring the vital role of federal agency expertise in operationalizing policies and programs.

The extent of the fallout from the Supreme Court’s ruling will not be known for some time. Most immediately, we expect an increase in legal challenges and scrutiny across health care programs. This could slow congressional and agency work, hinder federal oversight and innovation, and create a confusing legal and compliance landscape. As lawsuits and policymaker responses take shape, Medicare Rights will continue to advocate for a strong, accessible, and affordable health care system for all Americans.

Read the Supreme Court’s decision.