Chevron Deference Decision (Loper Bright Enterprises et al. v. Raimondo)

The Supreme Court’s 6-3 decision overturning Chevron (Loper Bright Enterprises et al. v. Raimondo) will change the way agencies issue regulations and Congress considers legislation, including health-policy legislation, because courts no longer will defer to agencies’ statutory interpretation of ambiguous statutes. In the near term, this new legal reality may impact how the Department of Health and Human Services (HHS) implements some key health-policy issues such as the nursing home staffing standards rule. Also, several general trends likely will emerge in federal policymaking. Finally, policymakers have convened hearings and introduced legislation to address the change in legal doctrine.

Nursing Home Rule Implementation

Legal experts believe the Loper decision could impact the CMS nursing home staffing standards rule. Shortly after CMS finalized its rule requiring nursing homes to have 3.48 hours per resident day in total staffing, the American Health Care Association (AHCA) and the Texas Home Care Association filed suit against HHS challenging the rule.

Courts reviewing AHCA’s lawsuit will no longer use the Chevron agency deference standard, which defers to HHS. Going forward, courts can use their own interpretation of the statute to decide whether HHS had the authority to promulgate the nursing home staffing rule. The new rule does not mean the court will automatically rule against HHS; however, it may make it easier for AHCA to prevail.

Congressional Approach

• Specificity vs. Generality. Instead of reaching a compromise between competing viewpoints by enacting general language and delegating regulatory authority to agencies in order to provide specifics, Congress may seek to enact more specific legislative provisions for agencies to implement. In health policy, this could mean fewer congressional bills addressing needed reforms. Or, post-Loper, Congress may opt to provide greater statutory guidance to HHS regarding how to implement that standard. 
• Legislative Micromanagement. As a result of Loper, Congress might intervene in areas historically left to agencies. In the health policy context, this could mean the enactment of technical, narrow directives to HHS in areas that typically require substantive expertise. The dissent in Loper even mentions FDA and HHS regulations as examples of areas where agencies should (but no longer will) exercise expert judgment. Congress may seek to play that role.
• Legislative History. Although conservative jurists rely exclusively on statutory text rather than committee reports or other legislative history, Congress could try to influence future judicial interpretation of statutes by providing extra-statutory evidence of congressional intent, such as committee reports and floor statements. 
• Greater Agency Participation in the Legislative Process. Federal agencies provide technical assistance to members of Congress and staff, such as legislative drafting suggestions and other non-partisan input to improve bill text. Post-Loper, agencies might use that process to provide more prescriptive, detailed legislative text aimed not only at more detailed legislation but sustainability in the courts. 
• Changes in the Rulemaking Process. Agencies may develop longer and more detailed rules, with particular focus on the statutory basis for rulemaking, and could include more detailed preambles documenting statutory intent. Rulemaking may take agencies longer than in the past and require multiple new internal reviews. Likewise, agencies may publish more requests for information and seek greater stakeholder consensus in an effort to address legal challenges. Agencies may routinely issue RFIs before rules in the future.

Congressional Activity 

Recent post-Loper activity illustrates some of these dynamics within Congress.

• Bill Introduction. On June 23, the ranking Republican on the Senate Health Education Labor and Pensions Committee, Sen. Bill Cassidy (R-LA) introduced the Upholding Standards of Accountability (USA) Act, which would give Congress more oversight over federal agencies. The bill would require the head of an agency to testify before a congressional committee within 30 days of publishing a major rule, those nominated to Senate-confirmed positions to testify before an appropriate committee prior to Senate confirmation, and that federal agencies are permitted to communicate with Congress at all times regarding proposed rules.
• Congressional Hearing. On July 23, the House Committee on Administration convened a hearing, “Congress in a Post-Chevron World,” where lawmakers solicited advice regarding congressional actions post-Chevron. Witnesses discussed establishing a congressional regulatory office. On both sides of the aisle, policymakers did not consider this action a short-term solution and asked for other more realistic legislative oversight solutions for Congress.

AMDA will continue to monitor how the Loper decision impacts legislative and regulatory policy this year.