Wooden gavel resting on its stand, with a law office blurred in the background.
The ruling doesn’t level the playing field, but does make it less uneven
by Jeffrey S. Baird
Monday, August 12, 2024

What Happened

On June 28, the U.S. Supreme Court overturned the Chevron deference (Chevron v. Natural Resources Defense Council), which favored agencies’ rulemaking interpretations. The Chevron deference had been around for decades.

It required federal courts to defer to reasonable federal agency interpretations of ambiguous statutory provisions. As a result of the Supreme Court ruling, the courts (on their own) will need to interpret ambiguous statutory provisions.

What This Means for HomeCare

The Supreme Court ruling does not completely level the playing field, but it makes it less uneven. The ruling will give durable medical equipment (DME) suppliers more leverage in negotiating settlements of civil cases brought by the Department of Justice (DOJ).

In a federal criminal investigation, depending on the underlying facts, elimination of the Chevron deference may strengthen the defendant’s arguments on why the criminal case should pivot to a civil case. In the event that a DME supplier should go to trial, and again, depending on the facts, the risk of an unsuccessful ruling/verdict is reduced.

The reason I say that the playing field is only “less uneven” is because the law is still stacked against DME suppliers that find themselves in the government’s crosshairs. Unambiguous statutes remain a formidable problem for suppliers that are under investigation. And while it is a positive that agency deference will not be given to ambiguous statutes, the federal government still has an arsenal of weapons at its disposal:

  • The DOJ, the Office of Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS) have unlimited time and money.
  • Under the maxim of “possession is 9/10ths of the law,” federal agencies control the flow of Medicare and Medicaid money to DME suppliers. If the government cuts off the flow of funds to a supplier, and even if the supplier ultimately wins, it may be a pyrrhic victory.

Will the elimination of the Chevron deference result in some DME suppliers taking a harder line stance in defending investigations? Absolutely. But the suppliers still need to have a solid set of facts and a credible argument that the facts and the law, combined, do not result in a problem for the suppliers.

This article originally appeared in Medtrade Monday.


Jeffrey S. Baird, Esq., is chairman of the Health Care Group at Brown & Fortunato, a law firm based in Texas with a national health care practice. 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 a member of the HomeCare Editorial Advisory Board and can be reached at (806) 345-6320 or jbaird@bf-law.com.