On June 28, 2024, the Supreme Court overturned a 40-year-old ruling that had facilitated federal regulation, which has significant implications for the home health industry, potentially reducing the regulatory authority of the Centers for Medicare & Medicaid Services (CMS) going forward. This landmark decision marks a significant and potentially advantageous win for business interests.

This development follows closely after the release of the proposed home health payment rule, which includes substantial cuts for the third consecutive year.

The Chevron doctrine allowed government agencies considerable leeway in interpreting laws to create regulations. With its reversal, agencies may now require clearer directives from Congress to establish regulatory frameworks.

The Supreme Court’s decision has primarily sparked reactions focused on environmental and reproductive rights issues. However, it could also serve as a pivotal moment for home health providers to challenge and possibly reverse payment reductions. CMS recently proposed a 1.7% decrease in aggregate home health payments for 2025, amounting to $280 million, prompting the National Association for Home Care & Hospice (NAHC) to re-file a lawsuit against the U.S. Department of Health & Human Services (HHS) and CMS regarding rate cuts imposed in 2023.

Even before the formal reversal of Chevron, indications suggested the Supreme Court was moving away from its previous stance. This shift was evident in cases like West Virginia v. EPA and American Hospital Association v. Becerra, where the Court constrained agency authority in ways reminiscent of the NAHC lawsuit.

NAHC contends that recent CMS actions, such as adjustments to the 340B drug pricing program for hospitals, have similarly overstepped legal bounds. In response, the Supreme Court ruled against CMS, mandating reimbursement to affected hospitals.

The impact of these legal challenges extends beyond courtrooms, influencing public advocacy efforts and legislative proposals like the Preserving Access to Home Health Act. While litigation was not NAHC’s preferred route, the Chevron decision bolsters their case and underscores the need for clearer legislative directives.

“This decision enhances the prospects of our lawsuit,” remarked NAHC President William A. Dombi. “It also necessitates more detailed legislative language from Congress, reducing the agency’s latitude in interpretation—an overall positive development.”