By: Trevor Anderson, Managing Shareholder

In the context of Medicare reimbursement appeals and cases, Chevron deference has traditionally played a crucial role. When the Department of Health and Human Services (HHS) and its sub-agencies implement changes that affect reimbursement rates for hospitals, prescription drugs, or introduce new coverage requirements, Chevron deference has often been invoked to support the agency’s stance on those issues. Without Chevron deference, the regulatory landscape for Medicare and related programs would likely become more contentious and uncertain, impacting how federal healthcare policies are implemented and enforced.

If agencies are no longer given deference in interpreting ambiguous statutes, HHS and CMS may face difficulties in administering Medicare and Medicaid as mandated by Congress. Now, CMS would need to demonstrate that its interpretations of statutes governing provider reimbursement, drug pricing regulations, and initiatives are not only legally permissible but also the most optimal interpretations under the law. This heightened scrutiny could potentially complicate the regulatory environment within the healthcare industry, affecting providers and reimbursement.

Without Chevron deference, providers could potentially have more avenues to challenge the agency’s reimbursement decisions. This change could lead to an increase in the number of disputes over coverage and reimbursement. Beneficiaries and their advocates may increasingly turn to the courts to interpret statutory language in ways that favor broader coverage and more favorable reimbursement rates. In a complaint filed June 28, 202 in the District Court for the District of Columbia, New Jersey-based Hackensack Meridian Health asked the court—not the Centers for Medicare and Medicaid Services’ (CMS’) technical experts—to weigh in on Congress’ intent when calculating enhanced rates for hospitals caring for more low-income patients.

The absence of Chevron deference would likely intensify litigation surrounding Medicare policies, making the judicial resolution of coverage disputes more prevalent. This shift could impact how Medicare policies are implemented and could potentially influence broader regulatory decisions within the healthcare sector.

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 recognizing the agencies’ interpretations. Without discretion given to the agencies, healthcare providers and beneficiaries would have a greater chance of success in bringing litigation against the agencies.