Angst over looming Chevron decision on health care

May 16, 2024

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By Ben Leonard and Chelsea Cirruzzo

Presented by The American Hospital Association

With Carmen Paun and Megan R. Wilson

Driving The Day

The U.S. Supreme Court is seen in Washington.

The Supreme Court's coming decision on the Chevron doctrine is expected to restrict the authority of federal regulatory agencies. | Francis Chung/POLITICO

CHEVRON DECISION’S POTENTIAL IMPACT — The conservative-led Supreme Court appears poised to weaken the power of federal agencies in the weeks ahead by either overturning or chipping away at the so-called Chevron doctrine.

The four-decade legal framework holds that when statutes are unclear and a federal agency regulates based on a “reasonable” reading of them, judges must uphold the regulation. Health care lobbyists, experts and Democrats fear that a Supreme Court decision could undermine Medicare and other key health care regulations. Some say Congress might have to get more specific in its intent to safeguard its policymaking.

There’s a partisan divide over the doctrine. Rep. Anna Eshoo (D-Calif.) told Pulse that striking down Chevron would empower “unelected, right-wing judges to overturn decades of precedent and impose their own preferences in cases involving health.”

Many leading Republicans have pushed for the doctrine to end. Sen. Ted Cruz (R-Texas) told Pulse it has been harmful because it “shifts decision-making away from democratically elected members of Congress.”

Here are three areas that could be affected:

Medicare regulations: Many parts of Medicare are explicitly precluded from judicial review and instead determined by HHS. A “huge question” if Chevron is overturned is what force those prohibitions would have, Leigh Feldman, director at McDermott+Consulting, said.

Experts expect more legal challenges to Medicare payment if Chevron falls.

The legislative process: Congress might have to be more prescriptive in legislation to direct agencies like HHS how it wants laws to be implemented to avoid the challenges, Feldman said.

“If laws get more prescriptive, outside stakeholders and interest groups could have a larger role in helping to craft specific provisions in the legislation,” said Jeffrey Davis, health policy director at McDermott+Consulting.

Krista Drobac, partner at Sirona Strategies, said the firm is reconsidering its potential lobbying tactics ahead of a possible decision, and lobbyists might need to find ways to safeguard existing policy.

FDA and pandemic-era rules: Many pandemic-era rules and FDA regulations around pharmaceuticals and medical devices could be at risk, said Dr. Reshma Ramachandran, an assistant professor of medicine at Yale who wrote an amicus brief to the high court.

The pandemic rules could include ones related to vaccines and public health, she said.

“It’s like the Wild West,” Ramachandran said, pointing to groups already planning challenges on regulations related to abortion post-Chevron. “That’s what we’re all worried about.”

WELCOME TO THURSDAY PULSE. Are there other implications from a Chevron decision you’re preparing for? Reach us and send us your tips, news and scoops at bleonard@politico.com or ccirruzzo@politico.com. Follow along @_BenLeonard_ and @ChelseaCirruzzo.

A message from The American Hospital Association:

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AROUND THE AGENCIES

Security personnel stand guard outside the Wuhan Institute of Virology

The HHS says research group EcoHealth Alliance didn't report that it had conducted a lab experiment at the Wuhan Institute in China. | Hector Retamal/AFP via Getty Images

HHS HALTS ECOHEALTH GRANTS — HHS has suspended federal grants to the EcoHealth Alliance, which worked with the Wuhan Institute of Virology on experiments involving coronaviruses, Carmen reports.

The research group’s work with the Wuhan lab is key to the lab leak idea of Covid-19’s origins — the unproven theory that the virus was created in the lab and accidentally leaked. HHS said it would halt its grants and propose to debar the alliance from future federal funding for failing to comply with agency rules designed to oversee grantees’ work.

The agency said EcoHealth didn’t report an experiment conducted at the lab that showed an increase in viral activity involving a coronavirus.

The alliance has maintained that it wasn’t doing risky research.

Zooming out: The move is a win for Republicans in Congress, who have pushed to defund the group for years. Republicans have proposed a criminal investigation of the alliance's president, Peter Daszak. He didn’t respond to a request for comment but has previously defended his work, saying the group’s goal is to prevent pandemics.

EcoHealth has 30 days to appeal.

A message from The American Hospital Association:

In Congress

HOUSE GOP LAUNCHES STAFFING MANDATE CHALLENGE — House Republicans rolled out a Congressional Review Act resolution that would overturn HHS' minimum nursing home staffing mandate.

The regulations, finalized last month, would require a minimum number of nursing home staff — and they’re projected to cost the facilities $43 billion over the next decade. CMS has offered $75 million to bolster nurse training, but industry advocates say that won’t be sufficient to cover the costs.

Reps. Michelle Fischbach (R-Minn.) and Greg Pence (R-Ind.) introduced the measure to roll back the rules.

The path forward: Because the Biden administration finalized the rules in the first half of the year, Biden can veto the resolution, even if Congress votes to overturn the regulations.

Some Democrats have opposed the rules. Even if they aren’t overturned, a bipartisan rebuke could occur, and they could face legal challenges.

CASSIDY FAILS TO FORCE FENTANYL SCHEDULING — Sen. Bill Cassidy of Louisiana, the top Republican in the HELP Committee, failed to get all senators to support permanently classifying street versions of the synthetic opioid fentanyl as Schedule 1 substances subject to enhanced regulation and law enforcement.

“All it does is codify current law, ensuring we don’t lose tools we need to confront the fentanyl epidemic,” Cassidy said. A temporary scheduling of illicit fentanyl substances is set to expire by the end of the year.

But Sen. Ed Markey (D-Mass.) opposed the bill, arguing that permanent scheduling would limit the government’s ability to research “overdose and addiction treatment medication” and lead to more people of color being incarcerated because it includes mandatory minimum sentences for fentanyl possession.

The House passed the bill with broad Democratic support last year.

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TELEHEALTH BILL CHANGES — The Energy and Commerce Health Subcommittee is scheduled to mark up a pared-down version of a pandemic-era Medicare telehealth extension bill today to align it more closely with legislation the House Ways and Means Committee passed unanimously last week.

Instead of making the Medicare rules permanent as in a previous version of the bill, the Telehealth Modernization Act in E&C, an amended version from sponsor Rep. Buddy Carter (R-Ga.), would extend them by two years, like the Ways and Means bill. It also would follow the Ways and Means bill by including a five-year hospital-at-home waiver extension and having similar language aimed at reducing fraud in durable medical equipment and lab test orders.

But unlike the Ways and Means bill, it would establish payment parity for federally qualified health centers and rural health clinics for in-person and virtual care.

If adopted, the move to align the bills would strengthen the House’s position in negotiating with the Senate.

CARVEOUT REQUESTS — A group of China-based biotech companies faced a setback on Wednesday as the House Oversight and Accountability Committee overwhelmingly advanced legislation that has them in the crosshairs, Megan reports.

The bill, called the BIOSECURE Act, would effectively ban the operations of Chinese “companies of concern” in the U.S. by prohibiting them — and any businesses that use their products — from receiving federal contracts, grants or loans.

One of those companies, WuXi AppTec, is used by many large drugmakers to help develop and bring medicines to market. In the leadup to the markup, WuXi AppTec and WuXi Biologics, which have China-based parent companies, had been urging lawmakers on the House panel to remove them from the bill.

The companies have been pushing back on lawmakers’ accusations that they have ties to the Chinese government and pose a national security risk. WuXi AppTec flew executives, including Richard Connell, the company’s U.S. and EU president, to Washington as part of the push. Elizabeth Steele, one of WuXi Biologics’ lobbyists, said the company has been working to “educate legislators on what our company does and doesn’t do.”

Last month, a spokesperson for Complete Genomics, a California-based company owned by MGI Tech, said its inclusion in the bill “is based on misunderstandings and representations about the company.”

The BIOSECURE Act has continued to gain momentum since a Senate committee approved its version in March.

WHEN KIDNEYS FLY — A bill reauthorizing the FAA is headed to the president’s desk — and it could change how human organs are transported by air, Chelsea reports.

The House approved the five-year reauthorization bill on Wednesday, sending it to President Joe Biden, who’s expected to sign it.

The legislation would create a working group that includes air carriers and organ transplant providers to identify best practices for transporting organs in the main cabin of a plane instead of in the cargo hold.

Organs were relegated to cargo following the 9/11 attacks when changes made to airport security protocol made it impossible for someone without a ticket to accompany luggage to the gate, meaning groups could no longer bring organs straight to a plane’s cabin. Organ procurement groups have long called for the change.

A message from The American Hospital Association:

WHAT WE'RE READING

Healthcare Dive reports on Kansas ditching CVS in its new Medicaid contracts.

The Wall Street Journal reports on new data showing a rise in cheating on drug tests.

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