News Briefs: Chevon Ruling Could Bring More Legal Challenges to Rules Governing MA, Medicaid

The Supreme Court’s June 28 rulings overturning the so-called Chevron doctrine could impact federal regulation of multiple industries, including Medicare Advantage, and lead to increased legal challenges to HHS regulations. In a 6-3 decision, the Court ruled on a pair of related cases — Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Dept. of Commerce — that lower courts must “exercise their independent judgment in deciding whether an agency has acted within its statutory authority,” as required by the Administrative Procedure Act (APA). The doctrine stems from a 1984 case, Chevron v. National Resources Defense Council, which dealt with environmental issues but established a legal framework allowing federal agencies such as HHS broad authority to interpret “ambiguous” laws through rulemaking. Without such discretion, the judicial system will have more power to interpret unambiguous rules that face legal challenges, which are common in MA and other highly regulated sectors of health insurance. “We believe the decision will impact the broader legislation process which we view as a positive for healthcare in general,” observed securities analyst Ann Hynes of Mizuho Securities. “HHS and CMS may face difficulties in administering Medicare and Medicaid as tasked by Congress. To ensure the agencies’ interpretations are enforced, Congress would likely need to refine the Medicare and Medicaid statutes to expand the scope of agency authority and address any existing ambiguous language by memorializing the agencies’ interpretations,” warned attorneys from Baker Donelson prior to the ruling. “Without discretion given to the agencies, health care organizations and beneficiaries would have a greater chance of success in bringing litigation against the agencies.”

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Lauren Flynn Kelly

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues since the early 2000s and specializes in in-depth reporting on Medicare Advantage, managed Medicaid and Medicare Part D. She also possesses a deep understanding of the complex world of pharmacy benefit management, having written AIS Health’s Radar on Drug Benefits from 2004 to 2005 and again from 2011 to 2016. In addition to her role as managing editor of Radar on Medicare Advantage, she oversees AIS Health’s publications and manages the health editorial staff. She graduated from Vassar College with a B.A. in English.

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