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Chevron Doctrine

Supreme Court Strikes Down Chevron Doctrine | Implications for Medicare

The Supreme Court’s decision on June 29, 2024, to strike down the Chevron Doctrine has significant implications for numerous federal rules and regulations, particularly in healthcare.  This landmark ruling effectively limits the power of federal agencies and shifts more interpretive authority back to the courts.

Overview of the Chevron Doctrine

The Chevron Doctrine, originating from a 1984 Supreme Court case, has long shaped how courts review federal agency decisions and how agencies interpret ambiguous laws.

What it Means for Medicare

In 1984, the Supreme Court’s decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. established a new standard for evaluating federal agencies’ interpretations of ambiguous statutes. This case emerged from a dispute over the EPA’s interpretation of the Clean Air Act, leading to a two-step test to determine whether to grant deference to an agency’s interpretation.

Key Principles

The Chevron Doctrine rests on a two-step process:

  1. Step One: Determine if Congress has directly addressed the issue at hand.  If the statute is clear, it must be followed.
  2. Step Two: If the statute is ambiguous, assess if the agency’s interpretation is reasonable.  If it is, courts defer to the agency’s expertise, assuming agencies have specialized knowledge suited for technical decisions.

Supreme Court Decision Analysis

The Supreme Court’s decision to strike down the Chevron Doctrine has profound implications for federal regulatory power, especially in healthcare.

Majority Opinion

The majority opinion, decided by a 6-3 vote, focuses on limiting federal agencies’ authority to interpret ambiguous laws.  The justices emphasized the need for a clear distinction between lawmaking (Congress) and law interpretation (courts).  The ruling impacts federal agencies like CMS, restricting their ability to broadly interpret Medicare statutes.

Dissenting Opinion

The dissenting justices argued that the Chevron Doctrine provided necessary flexibility for agencies to adapt to complex and evolving issues.  They contended that the majority’s decision could lead to inefficiencies and slower responses to emerging challenges in specialized fields like healthcare.

Legal Reasoning

The legal reasoning behind the decision is that agencies should not have the final say in interpreting ambiguous statutes.  The Court aimed to reinforce the separation of powers and ensure that law interpretation remains a judicial function.

Implications for Medicare

The Supreme Court’s decision will have far-reaching effects on Medicare policies, changing how regulations are interpreted and enforced.

Regulatory Uncertainty

Without Chevron deference, judicial challenges to CMS decisions may become more frequent, potentially slowing policy changes and creating uncertainty for healthcare providers, insurance carriers, and beneficiaries.

Impact on Medicare Decisions

CMS might face more legal challenges as courts no longer defer to its interpretations of ambiguous laws.  This shift may slow decision-making processes, leading to delays in approving new treatments and potentially increased costs due to more frequent legal battles.

Future Legal Challenges

The end of the Chevron Doctrine will likely lead to a surge in legal challenges against Medicare regulations.  Agencies will no longer enjoy the same judicial deference they once did, making it easier for stakeholders to contest CMS’s decisions in court.

Stakeholder Perspectives

Healthcare providers may benefit from this development as it opens avenues to challenge burdensome regulations.  However, beneficiaries could experience mixed effects — some may benefit from more stringent oversight, while others could lose access to essential services if new regulations face prolonged legal battles.


The Supreme Court’s decision to strike down the Chevron Doctrine marks a significant shift in legal precedents, particularly impacting Medicare regulations.  Courts will now have more say in interpreting these laws, which can lead to increased litigation and potential inconsistencies in how healthcare laws are applied across different jurisdictions.

How this unfolds will be interesting and likely affect the management of the Medicare program.  My colleagues and I will be monitoring these developments closely.


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