SCOTUS Term Wraps With a Bang

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Julie Rovner: Hello and welcome back to “What the Health?” I’m Julie Rovner, chief Washington correspondent for KFF Health News, and I’m joined by some of the best and smartest health reporters in Washington. We’re taping this week on Tuesday, July 2, at 11 a.m. As always, news happens fast and things might have changed by the time you hear this, so here we go.

If you’re a regular listener, you’ll remember that the week of Memorial Day we did a roundup of the health policy-related Supreme Court cases whose decisions we expected to come in June. Well, now it’s the week of July Fourth, and we’re going to follow up and talk about how those cases got resolved. We are pleased to welcome back to the podcast Sarah Somers, legal director of the National Health Law Program. Last winter, Sarah helped us understand what was at stake in perhaps the most significant health-related case of the term. Sarah, welcome back to “What the Health?”

Sarah Somers: Hello, Julie. Thank you so much for having me.

Rovner: So let’s talk about the big kahuna first, or should I say the big herring? Tell us about the court’s decision in Loper Bright Enterprises v. Raimondo. Technically, this was a case about herring fishing and who should pay for government observers on fishing boats. But the reverberations from this will be felt all over the federal government, right?

Somers: Absolutely. This is yet another example of the kind of case that can sneak up out of nowhere for those of us who are interested in health policy, because it doesn’t have anything to do with health policy or our usual subjects. What this had to do with is a Department of Commerce regulation that required fishing boats to pay for observers to the extent to which they were fishing. And so this was something that normally would not concern us, but the parties introduced a much broader question, which is whether they should overturn a case called Chevron, which deals with the extent to which courts should defer to agency interpretations. Chevron was decided in 1984, and what it’s meant is that if a statute is clear, then a court needs to follow the statute. But if it’s ambiguous, then the court needs to defer to a reasonable interpretation by the administrative agency.

And so this is a particularly troubling case because the regulation at issue had been withdrawn and the fishermen involved in the case had been reimbursed for any fees that they’d paid. So this wasn’t really a live issue. And it just shows the extent to which the court was really eager to get to this question. Conservative lawyers and scholars and judges have had Chevron in their sights for a good while — and have been critical of it saying that it gives agencies too much power. Now, those of us who work in health policy think it actually gives the agencies an appropriate amount of power. The agencies are the ones who have the expertise, who have the time, and who have the official function of interpreting what a statute means. In the case, the work that we do, Medicaid is the statute that we’re most interested in. Medicaid, a notoriously hypertechnical and confusing statute, and just one of hundreds that agencies are interpreting all over the federal government.

What administrative agencies do touches on the lives of every American in so many ways: environmental, transportation, health, I could go on and on, but it’s all-encompassing. Yeah, the war on Chevron has finally culminated in this final battle, and now the court has ruled that the court doesn’t have to give particular deferences to agencies anymore. They can take a fresh look at everything and say, “I don’t care what you say, accountable experts, with all of your time and your know-how, we’re going to take a look at this and see if we agree or not. And if we don’t, then it’s a whole new day.”

Rovner: So what kind of health issues are we most concerned about here that we would now not necessarily be giving deference to the administrative agency?

Somers: I was thinking about this as falling into two categories. There are sort of the high-profile, more controversial, or ideological issues. Issues like bans on discrimination and treatment for LGBTQ people; protections for discrimination for people with disabilities; regulations that ensure access to services for people with limited English proficiency; anything to do with abortion; a lot of things to do with family planning. These are the kind of things that draw controversy and are always vulnerable to challenge. But then there’s a whole ’nother world of things that people don’t really think about, which is the complexities of how rates are determined for hospitals; how rates are determined for managed-care plans; how patient billing is conducted; all the myriad regulations that govern how hospitals function. And these are the kind of things that just grind along and keep the wheels of the health care industry turning. And what this does is it throws a lot of sand in those gears and sometimes can bring things to a halt.

And so it can influence these high-profile issues where people might be more vulnerable to discrimination, not have access to services in their language. But also the kind of invisible things that you don’t see — but you just know as a patient, as a provider that the works are being gummed up and it’s not working efficiently and quickly the way it’s supposed to.

Rovner: I’ve seen a few people write that they’re worried about agencies getting more timid in light of this. That they might be less inclined to regulate on things that they wouldn’t normally regulate about.

Somers: I think that’s absolutely true. And I already think the agencies are quite cautious because they’re always vulnerable to challenge under the Administrative Procedure Act. But this is just going to turn up the heat several notches and keep them out of areas that they really are very much needed, where their expertise and their experience is needed. I think that’s absolutely true. If you want to talk about the other decision that goes hand in hand with this one then …

Rovner: We’ll get there in a second, but before that, I’ve also seen commentary about the concern that this will give an advantage to businesses, or basically entities that have enough money to continue to go to court. Because those are the ones who’ll be able to file and complain about regulations. Whereas people who might be affected by other regulations will not have as much access to the courts.

Somers: Absolutely. This is a deep-pocket industry, and it’s just going to open the floodgates to more litigation for the well-resourced and connected among us — these big agencies, big corporations. It’s true that from the beneficiary side, or the patient side, you also may want to argue with an interpretation of a regulation, but it’s much less likely that you will have the resources and the time and really the knowledge to be able to do it. So the deck is really stacked in favor of industry after this.

Rovner: So one of the things that was in this decision or that [Chief] Justice [John] Roberts wrote was that this did not open the floodgates to go back and look at previous regulations. You couldn’t go backwards. I know that was a big concern. But there was another case that kind of said, “Well, maybe you can tell us about that other case.”

Somers: Yes. And let me just comment for a second on what Justice Roberts said, which is that, oh, this doesn’t mean that cases decided under Chevron aren’t good law anymore. In order to disrupt that you’d need some kind of special factors or special consideration. As Justice [Elena] Kagan pointed out, we don’t know what that would look like and anybody can come up with a special reason, an important reason it should be overturned. And it also, more importantly, forget the ones that are settled, the ones that have never been challenged because industry might’ve thought, well, it’s not worth it. Well, now it is worth it, right? And that bleeds to the next case, which is about Corner Post v. Board of Governors of [the] Federal Reserve [System]. And I will say, speaking for myself, this one snuck up on me a little bit. We’ve been watching Loper Bright for a long time. Our organization filed an amicus brief in the case.

The Corner Post kind of snuck up. And it’s about, once again something very far removed from health policy, about debit card fees that get passed on to merchants, and they hate it. And so two big industry groups came after this regulation, saying even though the statute of limitations had passed, we’re challenging it. Normally it’s six years after a regulation is final you have to challenge it. But they said that’s not fair, we didn’t even exist. And so now that we’re harmed by it, we should be able to challenge it. And sure enough, six out of the three justices said, “Yeah, that’s right.” And so what that means is everybody can look around and take a fresh look at things that have been on the books seven years, 10 years, 20 years, who knows? Including as Justice [Ketanji Brown] Jackson pointed out, cases about drug approval like approving mifepristone, the drug that’s used in abortions. So it all just weaves together into a web that is going to tangle up health advocates, patients, providers, and it’s really scary.

Rovner: Well, let’s move on to the abortion cases. There were two this term. One of the two was challenging the FDA’s approval of the abortion pill mifepristone. The other was asking whether a federal law that requires hospitals to provide emergency stabilizing care for pregnant women and others — including potentially abortion — overrides Idaho’s near-total ban on the procedure. In both cases, the court avoided reaching the merit. So we don’t really know what the justices think or what they might’ve ruled, but let’s take them one at a time. Let’s talk about what happened with the abortion pill case. That was the one brought by a group of conservative health professionals in Texas.

Somers: Right. These providers, doctors, and dentists said that it violated their religious beliefs to have to have anything to do with abortion. And even though they were not going to ever prescribe it, they argued, What if somehow we had to be burdened by treating somebody who had taken this pill? Well, they didn’t actually have any evidence that that had happened. And so what the court said was, you actually don’t have a stake in this other than a political one. And we’re not here to get into political questions like that. That’s not what the courts are for. You have to have what’s called standing, meaning, what’s your stake in this? How are you going to be harmed? Which is absolutely true and kind of a mark in contrast to Loper Bright, where really was the standing of these groups that were suing. But anyway, what goes on here in this case is that the court said you don’t have standing, but that doesn’t mean nobody could have standing. Who knows?

And so, sure enough, the states are waiting in the wings to bring it up themselves and argue anew that they’re the ones who are being harmed by it. So it’s an undead kind of issue, and it’s almost certain to come back and haunt us.

Rovner: You already mentioned that drugmakers in general have been kind of freaked out by the idea of judges making scientific decisions that overrule the FDA. That could still happen, right?

Somers: Absolutely. And the FDA is barraged by lawsuits. They have so many fronts on which already they have to defend themselves. And in addition to agencies being timid, there long have been concerns about industry capture in different parts of the agency. And so there already are so many areas on which they’re vulnerable in trying to regulate drugs. This is just one new blow.

Rovner: So the other case, as I said, pits Idaho’s abortion ban against the Federal Emergency Medical Treatment and Active Labor Act, EMTALA. Remind us again what EMTALA is and how it could relate to abortion.

Somers: What EMTALA is is a very important federal law that says that hospitals have to provide necessary stabling treatment to people who arrive in an emergency medical condition. And this means not just treatment to save somebody’s life, but also to prevent any kind of serious impairment to bodily functions or great pain or serious dysfunction or other types of jeopardy. So what that meant is EMTALA is requiring hospitals in every state to provide certain kinds of treatment that are banned by Idaho’s abortion ban. For example, Idaho’s abortion ban says you can’t provide any kind of abortion care unless someone is at the verge of death. And so there are a lot of situations — and they’ve already been happening in Idaho, while this law has been in effect — where you might have devastation to your reproductive organs, you might be in horrible pain. The pregnancy isn’t viable and you’re suffering because of this law that is conflicting with EMTALA.

And so the argument is: Federal law is superior to state law, and federal law has to rule if there’s a conflict with state law. And so in this case, the district court in Idaho said, “Yeah, this violates EMTALA.” And the court ended up taking it away from the 9th Circuit Court of Appeals, the Supreme Court did, and lifting the stay. And now what that meant was that the law was in effect, pregnant people were suffering horribly, having to be airlifted out of the state. And what does the court do at the end of the day but come back and say, “Yeah, we shouldn’t have done that. We’re going to let this go back and they’re going to figure this out more fully.” And the stay is going to stay in effect. That’s all fine and good in Idaho, for now. But then you already have the 5th Circuit, which has similar laws that are in effect. And so those people down there and the doctors who are trying to treat them are still in limbo.

And that’s what Justice Jackson said in her dissent, which is like you’re just leaving all these people in the lurch and doctors don’t know what to do. They’re scared of getting prosecuted, and so you should have just decided this instead of saving it for another day. And the majority kind of gave a roadmap to the court of appeals like, here’s how you can show that this actually doesn’t conflict with EMTALA.

Rovner: Which, I mean, the general rule is that federal laws are supreme to conflicting state laws, right? That’s a kind of …

Somers: Exactly. Federal law preempts state law, and it shouldn’t be a hard question. It’s the kind of thing that 10 years ago, regardless of Dobbs [v. Jackson Women’s Health Organization] would not have been a closed question.

Rovner: And technically the court just kind of said, “Oops, we shouldn’t have taken this case, or at least we shouldn’t have taken it now.” I read that as being they could not come to an agreement that they were likely, like, split 3-3-3. Is that your reading, too?

Somers: That’s the speculation. We never really know what goes on behind those closed doors. But it did seem like a real punt and a throwing up of the hands like, well, we don’t know what to do. So we’re just going to call this whole thing off. It was interesting too, to see Justice Jackson along with Justice [Clarence] Thomas and [Samuel] Alito saying, “We should decide this.” But they wanted to decide it very differently. They wanted to just call the question once and for all, but that’s not what happened.

Rovner: In both of these abortion cases, if Donald Trump is returned to office, his administration could likely just do itself what the plaintiffs are seeking here, right?

Somers: Yeah. A federal law could be passed if Congress was all Republican and Trump was president. There are all kinds of things that they could do through this. They could try to amend EMTALA. Who knows the mischief they could get into, the policymakers?

Rovner: But even if Congress remains, or at least one house of Congress remains in Democratic hands, one presumes that the administration would be pushed to both alter its interpretation of EMTALA and perhaps revoke the approval of mifepristone. Those are both theoretical things that the administration could do, right?

Somers: Absolutely. There’s executive action that could endanger access to abortion. Of course legislative action. And then there are these legal issues looming in the courts that could just come back again.

Rovner: So none of these cases are over. The court in the past few weeks also ruled in a couple of cases I call health care-adjacent. In one, the justices overturned a bankruptcy settlement reached between state governments and families of people who died of opioid overdoses, and Purdue Pharma, the company that made OxyContin and lied about how addictive it was. What happened in this case? What was the Supreme Court doing in a bankruptcy case?

Somers: Yes, questions were raised about the settlement. This is a huge settlement, billions of dollars on behalf of all the people who died and suffered from addiction because of the drugs that were being prescribed at a time when people weren’t aware of how addictive they were. The majority said that the settlement was not adequate to protect debtors or even the creditors and other victims. And all this work had gone into, all this time to try to come up with the settlement, but the majority was saying, this just gets the defendants too much off the hook. They still have too much of themselves protected from bankruptcy and from debtors and from creditors.

Rovner: One of the terms of the settlement was that it would basically eliminate any future claims against the Sackler family, the people who own Purdue Pharma.

Somers: Exactly. It really arguably let them off the hook. But at the same time, the dissent in this case said, “Look, this has been so hard-fought. It’s been so difficult to get everybody on the same page. There’s so much money at stake. And some of these people are in really dire straits and they need the money now.” So it was a real trade-off between are you really letting the bad actors off the hook, and what do you take today so that you can get the most relief for people as quickly as possible? Definitely not something as a health advocate I thought I’d have to think about bankruptcy, but think about it I did.

Rovner: And it was not decided ideologically.

Somers: Not at all.

Rovner: It was a very odd breakdown of justices with liberals and conservatives on both sides.

Somers: Exactly. And you can see the liberal and conservative arguments on both. You know what I mean?

Rovner: Let’s put it this way, I was glad I wasn’t being asked to decide that case.

Somers: 100{e60f258f32f4d0090826105a8a8e4487cca35cebb3251bd7e4de0ff6f7e40497}, oh my gosh, yes.

Rovner: Finally, the court ruled in a case out of Grants Pass, Oregon, that cities can enforce bans against sleeping in public even if the sleepers have no homes and no other access to shelter. This is also kind of health care-adjacent but could have repercussions, right?

Somers: Yeah, it’s health care-adjacent in two senses. One is the arguments that the local governments were making, which is that having people camping in public places is a public health problem. There’s a lot of attendant problems that the local governments say they have to deal with that affect the health of the community. But it’s also an important health issue from the perspective of the people who are unhoused, who are forced to sleep in their cars or in public, because housing is one of the primary drivers of health. And we know there’s a horrible housing crisis in this country. It’s not just people who have limited income who can’t find housing. People at higher and higher income levels are struggling to find housing now. And so it just seemed like the ultimate cruelty to say to people, yes, we know you don’t have housing. We know it’s impossibly unaffordable. We know there’s a shortage. And the same time, too bad for you.

The underpinning of this decision is for years they had said it’s a cruel and unusual punishment under the Eighth Amendment to have criminal penalties against people because of their status. Like you can’t have criminal penalties for being an addict. You can’t have criminal penalties for someone being homeless. But what they split this hair and said, well, it’s not for being homeless it’s because they’re camping. And Justice [Sonia] Sotomayor in her dissent sort of said, “Oh, come on. That’s really a distinction without a difference.” And it’s the real concern on the part of Justice [Neil] Gorsuch — writing for the majority — was for the local governments and how hard this was on them and how difficult. And OK, but it’s really hard on the people who are going to be forced to stay awake or go to jail.

Rovner: And it’s not like a lot of these people can just move on. Many of them have jobs in the community. They just don’t pay enough for them to be able to afford housing.

Somers: They have jobs and they have families and their kids can be in school. There’s all kinds of reasons they want to stay there. And there was also discussion of, well, there really is shelter space but people don’t want to go because they don’t want to be forced to go to religious services, because they don’t want to be in a sober house. Well, I don’t know. That was subject to dispute in the record. But also there’s other reasons of safety and concern not going to shelters. And something that looks available on paper may not actually be available. So, it’s very cruel.

Rovner: To wrap up, which of these cases do you think is going to have the most lasting significance when it comes to health care?

Somers: That’s a really good question. Right now, because of the potential chaos it can unleash, I would say sort of the one-two punch of Loper Bright and Corner Post. It seems like that could be a real shock to the system and cause a real upheaval in administrative law. Sometimes these things don’t shake out as badly as we think they do. It may be that most judges who are faced with these cases that aren’t ideological may be like, “You know what? I do want to defer to the agency because I don’t know anything about the Two-Midnight Rule in Medicare. I don’t know anything about actuarial soundness and Medicaid managed care, so why don’t I let the agency do that?” But at least in the short term it’s going to be pretty disruptive.

Rovner: Yeah. And to be clear, the ruling didn’t say they can’t defer to the agency. The ruling just said they don’t have to defer to the agency.

Somers: Exactly. And Justice Roberts in his majority opinion cited a case called Skidmore [doctrine], which is a level of deference to the agency that’s like a step below Chevron [doctrine]. And it just says you need to give it respectful deference based on how reasonable it is. And sometimes in practice, Chevron and Skidmore may not look that different. And so I remain hopeful that courts will still show respectful deference to the civil servants who really know what’s going on.

Rovner: We shall keep an eye on it. Sarah Somers, thank you so much for this Supreme Court wrap-up.

Somers: Sure. I’m happy to do it.

Rovner: So, OK, that is our show for this holiday week. As always, if you enjoy the podcast, you can subscribe wherever you get your podcasts. We’d appreciate it if you left us a review; that helps other people find us, too. Special thanks as always to our technical guru, Francis Ying, and our editor, Emmarie Huetteman. As always, you can email us your comments or questions. We’re at whatthehealth@kff.org, or you can still find me at X, @jrovner. We will be back in your feed next week. Have a lovely holiday. And until then, be healthy.

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