At the end of June 2024, the United States Supreme Court’s Loper Bright Enterprises v Raimondo decision sparked considerable uncertainty throughout American health care. The decision—which concerns fisheries, not health care itself—overturned a judicial principle known as Chevron deference, stemming from a 1984 Supreme Court case.

Chevron deference is the notion that when there is ambiguity in a statute an agency is responsible for executing, courts should defer to reasonable agency interpretations of that statute. In Loper Bright, the Supreme Court overruled Chevron and held that courts may not simply defer to agency interpretations and must instead determine the best interpretation of ambiguous statutes for themselves. Importantly, this does not mean an agency’s interpretation will never win out, but rather that it will only survive if the courts independently agree with that interpretation.

As a highly regulated industry, the health care sector is likely to be disproportionately affected by the Loper Bright ruling and the end of Chevron deference. And since the ruling came down, faculty in the Master of Health Care Innovation (MHCI) have been working to understand just how consequential—and how destabilizing—it might be.

At the MHCI Seminar in mid-August 2024, Holly Fernandez Lynch, JD, MBE and Theodore Ruger, JD spoke with students about the ruling’s likely complications, including:

• Unpredictable and less technically savvy decisions
  Judges are rarely experts in health care matters. Under Chevron, they were directed to defer to the expertise of regulatory agencies. Now, judges may issue decisions that are more variable and fail to consider important nuances.
• Ideologically driven decisions
  Judges throughout the United States are politically heterogeneous. Without a rule like Chevron deference to guide them, ideological concerns may play a larger role in their decisions.
• More lawsuits
  With regulatory authority weakened, groups with an interest in changing or removing agency regulations will be more likely to bring—and win—lawsuits.
• Slower, narrower regulations
  Agencies may be less inclined to write regulations, or more inclined to write them narrowly, in order to avoid the higher costs associated with additional lawsuits, and to avoid having their regulatory approaches overturned by the courts.
• The decline of strategic ambiguity
  Congress sometimes chooses to leave aspects of legislation ambiguous, purposefully relying on regulatory agencies with relevant expertise to fill in the details. With no guarantee of deference to those agencies’ choices, Loper Bright will make it more difficult for Congress to do that.

In a JAMA viewpoint published at the end of August, Lee Fleisher, MD, ML and colleagues analyze some of the likely implications of the decision for federal health agencies. They, too, predict an increase in litigation in the wake of Loper Bright and add that “US Senator Bill Cassidy has already asked several agencies to defend decisions that are purportedly unsustainable without Chevron deference.”

In addition, they write, Medicare’s Conditions of Participation (CoPs) may become subjects of litigation. CoPs are standards that health care organizations must meet in order to participate in Medicare or Medicaid programs. And among CoPs, likely targets of litigation include requirements that “promote public health, sustainability, and health equity,” like continued reporting of COVID-19 and influenza data and measures of greenhouse gas emissions by hospitals.

They write that the end of Chevron may cause uncertainty among regulated entities about whether federal policies will stick, complicating their implementation. And echoing Prof. Fernandez Lynch and Prof. Ruger’s discussion with MHCI students, they suggest that the decision incentivizes rulemaking calibrated to avoid lawsuits, which may weaken regulation in general.

But, say Dr. Fleisher and colleagues, there is “the surprising possibility that Loper Bright could have a protective effect on regulation,” too. There is the potential to supplant Chevron deference with the 1944 ruling in Skidmore v Swift & Company, which held that “the validity of [an agency’s reasoning], and the consistency of the interpretation with the agency’s past pronouncements” should determine the deference a regulatory agency receives. Steadiness, in other words, is a watchword with Skidmore. And reliance on Skidmore deference may have the added advantage of reducing “wide policy swings as presidents change.”

As of late 2024, in the wake of Loper Bright Enterprises v Raimondo, uncertainty still reigns. As Professor Ruger commented at the MHCI Seminar, the decision is deregulatory and libertarian in character. But its practical effect over the long term is unknown. And while by some measures, it is another dropped stitch in the unraveling of the regulatory state, it may also represent an evolution in how regulation is made in the United States.

Learn more about how federal health care agencies regulate the quality of health care delivery in Value and Quality in Health Care, with Lee Fleisher, MD, ML and Neha Patel, MD, MS.

And learn more about how legal structures shape and interact with American health care in Leadership and Legal Issues in Health Care, with Theodore Ruger, JD and Michael Useem, PhD.