What do fishermen have to do with healthcare?
There has been a lot of media coverage of “the Supreme Court case with the fishermen.” Much of it is long and technical. Here’s what you really need to know.
The “fishermen case” is Loper Bright Enterprises v. Raimondo, which challenges the National Marine Fisheries Service’s 2020 regulation interpreting a 1976 law as requiring fishermen to pay and transport observers who gather data to prevent overfishing. Raimondo is being decided alongside Relentless, Inc. v. Dept. of Commerce, which is a challenge to the Food and Drug Administration’s (FDA) denial of the exportation of a manufacturer’s connective tissue grafts. The U.S. Supreme Court (SCOTUS) heard oral argument (where lawyers argue in person before the Court after they’ve submitted written briefs) in both cases on January 17, 2024. A decision is expected this summer.
These cases are important because SCOTUS will decide whether to overturn a rule known as Chevron deference, named after the 1984 case in which the Court established the following rule: If a federal law is ambiguous (for example, it’s unclear what a “geographic area” is in a statute regulating nursing homes), then a federal court must defer to the relevant federal agency’s (for example, the Centers for Medicare and Medicaid Services, or CMS) interpretation of that law, even if the court may have interpreted the law differently. If you noticed that I said “federal” a million times, that’s because states have their own rules about deferring to state agencies’ interpretations of state laws. Raimondo and Relentless both challenge federal agency interpretations of federal law, and the plaintiffs in both cases argue that courts should not defer to those agency’s interpretations.
Chevron deference allows specialized agencies to make technical decisions in their fields of expertise. Congress tends to draft ambiguous legislation, partially because they can’t anticipate every technical issue or how industries will change over time, and partially because there’s a lot of editing and redrafting that happens before a bill is passed. So, Congress relies on agencies to use their specialized knowledge to interpret legislation and regulate particular industries. For example, the FDA interprets the Food, Drug, and Cosmetic Act when it determines what kind and the scope of regulations it can issue. However, opponents of Chevron, mainly conservative industry stakeholders, argue that administrative agencies overstep and overregulate. They argue that the courts are responsible for interpreting legislation, not federal agencies.
Relevance to Healthcare
Several federal agencies are crucial to regulating the healthcare industry, namely, the FDA, CMS, the Department of Health and Human Services (HHS), and the Centers for Disease Control (CDC). Based on recent legal disputes, here are some of the regulations and issues likely to be challenged in the event SCOTUS scraps Chevron deference:
- CMS’s interpretations of the Medicare Act in making changes to reimbursements for hospitals and prescription drugs;
- The FDA’s expansion of access to mifepristone, a pill used in medical abortions (there are several cases challenging the expansion making their way to SCOTUS);
- The FDA’s authority to regulate Laboratory Developed Tests, or LDTs, which are used to screen, diagnose, and treat serious diseases, and many of which have been reported as dangerously underperforming in the wake of the COVID-19 pandemic;
- The CDC’s implementation of pandemic protocols; and
- HHS’s regulations under the Affordable Care Act requiring insurers to cover preventive care like HIV prevention drugs, STI tests, and mental health screenings.
What Happens Now?
Chevron has fallen out of favor with SCOTUS, and they seem willing to roll it back. The question is, will they narrow the scope of the rule, determine some other test for weighing agency interpretations, or do away with deference altogether? Some legal experts think the most likely outcome is that SCOTUS will narrow the rule and not scrap it completely. Others believe that, even if SCOTUS does get rid of Chevron deference altogether, most federal courts will still defer to agencies as experts. Still others argue that, even before Chevron, it wasn’t super easy to overturn agency regulations, so there’s no need to worry that it will be a free-for-all if Chevron is overturned.
However, some legal experts fear that this won’t just be a return to pre-Chevron, but rather a judicial power play allowing SCOTUS (and lower federal courts) to play policymaker based on political leanings. That means any industry with deep pockets will challenge regulations it doesn’t like and ask a friendly court to impose a different policy. Another potential problem is that Chevron was relied upon in thousands of decisions issued by lower courts. Rolling it back opens the door to a flood of new litigation challenging earlier rulings about agency regulations. Regardless of what SCOTUS decides, these cases are a warning sign to Congress to be more careful in drafting legislation and to agencies to be more careful in drafting and justifying their rules and regulations.