On January 17th, the Supreme Court heard oral arguments in two cases about fish that could scale back Chevron deference. The petitioners in these cases, Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. U.S. Department of Commerce, challenged the National Marine Fisheries Service’s (NMFS) interpretation of the Magnuson-Stevens Conservation and Management Act of 1976. 

What is Chevron deference? 

The issue at stake is the legal precedent known as Chevron deference. It stems from the 1974 Supreme Court case Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., which established the precedent requiring courts to defer to agency interpretations of ambiguous statutes, provided the interpretation is “reasonable” (source). 

Chevron deference has afforded executive agencies like the NMFS broad latitude to interpret legislation. Most agree that executive agencies require some deference in order to function effectively. The issues being legislated are constantly evolving, and agencies bring unique expertise and resources in applying laws within these contexts. However, some argue that agencies receive too much leeway under Chevron, allowing them to bypass the legislative process. The cases before the Court revolve around the NMSF requirement that fisheries pay for federal monitoring of their own enterprises. In Loper Bright and Relentless, the petitioners argue that the NMFS went beyond its authority under the Magnuson-Stevens Act in requiring this monitoring. Petitioners are asking the Supreme Court to overturn Chevron deference.

How might this impact Medicare and Medicaid?

For Medicare and Medicaid, the Center for Medicare and Medicaid Services (CMS) plays the same role as the NMFS does for marine resources. CMS has the power to interpret the multitude of dense and complex statutes that make up Medicare and Medicaid. They use that power regularly. The American Cancer Society submitted a ‘friend-of-the-court’ brief to the Supreme Court arguing that completely reversing Chevron deference would curtail CMS’s authority to administer Medicare and Medicaid and their ability to react to the constantly-changing healthcare landscape (source).

Overturning Chevron would open the door for many existing agency interpretations of the byzantine legislation that makes up Medicare and Medicaid to be challenged. Many judges have upheld CMS guidance using Chevron deference (source). Take, for example, Atrium Medical Center v. United States Department of Health and Human Services (2014). In this case, the judge extended Chevron deference to the way CMS interpreted how hospitals are paid for inpatient services under the Medicare Act. In order to reach this conclusion, the judge had to consider an “intricate tangle of factors, proportions, wages, wage-related costs, paid hours, short-term disability payments, and [specialized nursing] hours,” ruling that the agencies’ interpretation “was not manifestly contrary to the statute” and that the “reasoning was neither arbitrary nor capricious.” (source). In particular, the judge highlighted that CMS has the proper technical expertise to make these decisions. If Chevron were to be overturned, cases like this would become even more complicated.

To be clear, ending Chevron deference would not mean that CMS would immediately lose all power to regulate. Rather, judges may have to reevaluate rulings that CMS relied on in their administration of Medicare and Medicaid. If this were to happen, judges would have a greater responsibility in making nuanced decisions about subjects outside their area of expertise. Agencies, including CMS, are likely to lose at least some challenges without deference to their “reasonable” interpretations (source). 

As a result, Congress may have to spend significant time revisiting legislation to clarify the authority of executive agencies to carry out their responsibilities. They may also have to spend more time as they draft new legislation to ensure agency authority is clear. This would be a tall order, considering that the 118th Congress is on track to be the least productive session since the Great Depression, having passed less than 40 bills since January 2023 (source). On the other hand, some would rather see Congress spend more time legislating than delegating responsibilities to unelected agency officials.

Where does the Court stand?

During oral argument, the Court indicated an array of views when it comes to Chevron deference. The court's liberal justices expressed a high level of concern in overturning Chevron. Specifically, Justice Elena Kagan voiced unease over the heightened responsibility Congress would face. Justice Kentaji Brown Jackson similarly wondered if the increased expectations would be shifted to judges and lead to them ruling in favor of their own policy preferences (source).  

The conservative justices expressed skepticism about Chevron deference during oral arguments. Justices Brett Kavanaugh, Clarence Thomas, and Samuel Alito all expressed a need to change Chevron deference (source). Justice Amy Coney Barrett did express concern over the “flood of litigation” that may come if Chevron is overturned (source). However, Chief Justice John Roberts assuaged some of those fears, suggesting that overturning Chevron might have a relatively small impact. He pointed to the fact that the Supreme Court has not explicitly used Chevron in any of its rulings for a number of years (source).

Ultimately, a weakening of Chevron is likely, but we’ll have to wait until the end of the current term in June or July, when the Supreme Court will release one decision addressing both Loper Bright and Relentless. Readers should keep an eye out for the Supreme Court’s decision. Will NMFS’s fishery requirements fall and Chevron deference end up “sleeping with the fishes?” If so, and CMS guidances are re-evaluated, we could see disruptions for the 65 million Americans on Medicare and the 90 million that rely on Medicaid and CHIP.