SCOTUS: HHS Overreach with Children's Hospital, Chevron deference at stake

WASHINGTON, DC: Today, SLF filed an amicus brief with the U.S. Supreme Court on behalf of a number of children’s hospitals impacted by unlawful agency overreach in Children’s Hospital v. Azar. For almost thirty years, Congress has reimbursed hospitals that treat a disproportionate number of Medicaid patients based on a calculation Congress provided in a statute. But in 2010, the federal agency overseeing those reimbursements suddenly announced a change in the calculation. Under the new calculation, the losses already suffered by hospitals treating Medicaid patients have become debilitating.

The agency claims it can get away with this because of the doctrine established in Chevron v. NRDC. Under Chevron, a court must defer to an agency’s interpretation of a statute if (1) the congressional statute is ambiguous and (2) the agency’s interpretation is reasonable. This doctrine is unworkable because lower courts inconsistently apply it. It should be overruled altogether because it allows agencies to interpret, enact, and enforce laws in violation of separation of powers.

But if the Supreme Court does not overrule Chevron, lower courts at least need better guidance about how to apply it. Here, traditional tools of statutory meaning give a clear reading of the congressional statute. That means the agency was not free to interpret and apply the law as it saw fit; it needed to follow the calculation already established by Congress. Without a better check on agencies by the judiciary, the already overbearing bureaucracy will only grow.

Click here for SCOTUS amicus brief

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