AMARILLO, TX – In a pivotal decision, the United States Supreme Court recently overruled the Chevron doctrine, a longstanding principle that granted federal agencies wide latitude to interpret ambiguous statutes. The ruling in Loper Bright Enterprises v. Raimondo, issued on June 28, 2024, is poised to reshape the regulatory environment for many industries, including durable medical equipment (DME) manufacturers and suppliers.

The Chevron Doctrine’s Impact on Regulatory Oversight
For nearly four decades, the Chevron doctrine required courts to defer to a federal agency’s interpretation of ambiguous laws it administered, provided the interpretation was reasonable. This deference allowed agencies like the Centers for Medicare and Medicaid Services (CMS) and the Food and Drug Administration (FDA) to play a significant role in shaping regulations impacting the DME sector.

However, the Supreme Court’s 6-3 ruling in Loper Bright has shifted the balance of power from the executive to the judiciary. The Court held that the Administrative Procedure Act (APA) does not support the Chevron standard of deference, asserting that the judiciary, not agencies, should resolve statutory ambiguities. Chief Justice John Roberts, writing for the majority, emphasized that courts are better suited to determine the meaning of ambiguous statutory provisions.

Implications for the DME Industry
This landmark decision is likely to have significant repercussions for the DME industry. Federal agencies such as CMS and the FDA have relied on Chevron deference to interpret laws that govern the safety, effectiveness, and reimbursement of DME products. Without this deferential standard, many existing regulations may face increased legal scrutiny, creating uncertainty for manufacturers and suppliers.

Increased Legal Challenges on the Horizon
One immediate consequence of the ruling may be a surge in legal challenges against existing and new DME regulations. Industry stakeholders will now have a stronger basis to contest regulations they believe exceed statutory authority or are based on unreasonable interpretations of the law.

For instance, the FDA’s regulatory framework for DME products often hinges on its interpretation of the Federal Food, Drug, and Cosmetic Act (FDCA). With the advent of new technologies and innovations in the DME space, such as advanced mobility devices and home health monitoring systems, the FDA’s interpretations may now be more vulnerable to legal challenges. Manufacturers might argue that the FDA’s approach to regulating these emerging technologies exceeds the statutory authority granted by the FDCA.

Similarly, CMS’s policies on DME reimbursement, including competitive bidding programs and coverage determinations, could be subject to more rigorous judicial review. Providers and suppliers who disagree with CMS’s decisions may find courts more willing to overturn policies that were previously upheld under the Chevron deference. 

Potential for Rollback of Existing Regulations
The Loper Bright decision does not automatically invalidate current regulations, but it does open the door for those regulations to be revisited and potentially struck down in future litigation. Long-standing DME regulations could now be at risk if courts find the underlying statutory interpretations unconvincing.

For example, CMS’s rules regarding the reimbursement rates for DME products, which have been a point of contention for suppliers, could be subject to new legal scrutiny. Suppliers may argue that CMS has overstepped its authority in setting rates or in implementing changes to the competitive bidding program. Courts may now be more inclined to agree with these arguments, leading to a potential rollback of certain policies.

A Cautious Approach to Future Regulatory Challenges
The Supreme Court’s decision is also expected to make federal agencies more cautious in their regulatory actions. Agencies may become less willing to address emerging issues in the DME industry without clear congressional mandates, fearing that their interpretations could be overturned in court. This could slow the regulatory response to new challenges, such as the integration of artificial intelligence in DME products or the expansion of home-based care services.

Navigating the Post-Chevron Regulatory Landscape
For DME manufacturers and suppliers, the post-Chevron world presents both challenges and opportunities. While the ruling may lead to greater legal uncertainty, it also provides a pathway for the industry to challenge regulations that are seen as overly burdensome or not grounded in clear statutory authority.

Industry stakeholders should closely monitor developments in the regulatory environment and consider engaging in litigation where appropriate. Proactively shaping the evolving regulatory framework will be crucial in ensuring that the DME industry can continue to innovate and thrive in this new era of administrative law.

Conclusion
The Supreme Court’s decision to overturn Chevron deference marks a significant shift in the regulatory landscape for DME manufacturers and suppliers. As agencies adjust to this new reality, industry stakeholders must remain vigilant and adaptable, ready to navigate the complexities of a legal environment where agency interpretations are no longer given the benefit of the doubt.

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, manufacturers, and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or [email protected].

Bradley S. Byars, JD, is a member of the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, manufacturers, and other health care providers throughout the United States. Mr. Byars can be reached at (806) 345-6303 or [email protected].