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Chevron & HC Compliance

by | Jul 8, 2024



July 8, 2024

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Chevron and Compliance

On June 28, the Supreme Court handed down what may be its most important decision in decades, the so-called Chevron decision. Some commentators believe this decision is about environmental regulation. But, in truth, the entire landscape of healthcare compliance is changed. The goal here is not to reargue the decision or assess its merits but to address its relevance to healthcare compliance.

Quick Summary

The issue in the Chevron case is when federal agency rule making goes beyond administering the law as passed by Congress and becomes agency based legislating. Chevron argued that an EPA requirement that Chevron pay EPA inspectors to sit on certain fishing vessels exceeded any mandate passed by Congress. The Supreme Court agreed with Chevron and limited the scope of agency actions to administering laws as passed by Congress. While EPA was the focus, the decision applies to DHHS, CMS, FDA, and CDC.

The Cause

Eric Felten, a well known author and columnist, wrote a ground breaking book called The Ruling Class in 1993. He argued that Congress was passing ever vaguer laws that sound good in principle but lack the specificity needed to be administered. Details were left to the Federal administrative agencies. The reason? If a law backfired or had unanticipated consequences (the end of gas stoves?), Congress could say that the agency made a bad decision and that this was not their intent. Congress takes the high road; the agencies are blamed. This has worked so well for members of Congress that the problem has grown worse up to today.

What It Means For Healthcare

Suppose, hypothetically, that CMS decides that telehealth services are only reimbursable if there are periodic in-person encounters. Is CMS writing regulation without Congressional authority or is it administering the law as passed by Congress? Not entirely clear. Suppose OIG pursues a provider for billing for telehealth services provided while not following CMS rules. But the provider claims CMS was overstepping Stalemate.

Nothing will happen immediately and until someone challenges an action by one of the health agencies, which they certainly will. Expect an avalanche of litigation. These cases will take years to wind through the courts. Courts will have varying levels of expertise in adjudicating these cases, decisions will be mixed, vary by jurisdiction and challenged while many currently accepted administrative mandates may go unobserved.

We are looking at a period of sustained confusion in the rules that apply to healthcare delivery and payment. This could go on for decades. Law firms will be awash in money, agencies will be hamstrung by sustained litigation, and the courts will have to quickly learn a whole lot about healthcare delivery and payment.

What It Means For Healthcare Compliance

Healthcare compliance only works if compliance professionals can advise their organizations to follow the rules even if they dislike them. Compliance says you do not pick and choose among the rules. When a compliance professional learns that their organization is non-compliant, they can point to the black lettered text. Not so easy now. The organization can respond by saying we don’t like that text and we can challenge it as an administrative fiat. The necessary clarity on which compliance depends is suddenly blurry. This will happen again and again in the coming years. It is essential that compliance professionals understand exactly what the Chevron decision says – and what it doesn’t say. Messaging to their organizations will have to be nuanced to reflect this new reality and the high cost of challenging unpopular administrative actions made clear.

Mark Pastin, Ph.D. is President of the Health Ethics Trust, a division of the Council of Ethical Organizations, established in 1993 to assist healthcare organizations in all aspects of compliance program operation and development.

Copyright, 2024, Health Ethics Trust/Council of Ethical Organizations

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