Supreme Court’s Decision to Overrule Chevron Doctrine Set to Impact Behavioral Health Regulations

After a landmark decision by the U.S. Supreme Court, lower courts will now have more say in behavioral health care regulation.

In a 6-3 vote, the Supreme Court overruled a 40-year decision known as the Chevron doctrine that required lower courts to defer to federal agencies on the interpretation of unclear statutes.

Chevron is overruled,” Chief Justice Roberts wrote. “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.”


The decision could impact regulations governing Medicaid and Medicare payment rates and insurance coverage of mental health services, according to KFF. In a post-Chevron world, federal agencies can issue regulations interpreting legislation, but courts will decide whether the agencies’ interpretation is lawful. 

Associate justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson dissented from the majority decision.

“Some interpretive issues arising in the regulatory context involve scientific or technical subject matter. Agencies have expertise in those areas; courts do not,” Kagan wrote. “Some demand a detailed understanding of complex and interdependent regulatory programs. Agencies know those programs inside-out; again, courts do not. And some present policy choices, including trade-offs between competing goods. Agencies report to a President, who in turn answers to the public for his policy calls; courts have no such accountability and no proper basis for making policy.”


Roberts responded to the dissenters’ assertion that judges are not experts in the field, in part, by writing that judges are experts in legal interpretation.

The Chevron doctrine was so broad that it became an impediment to determining the meaning of the law, according to Roberts.

Among the reasons Roberts listed to overrule Chevron was that federal agencies can change course on their interpretations of statutes, leaving “those attempting to plan around agency action in an eternal fog of uncertainty.”

The Supreme Court’s decision does not overturn prior decisions that relied on the Chevron framework, Roberts wrote.

A group of health care organizations including the Bazelon Center for Mental Health Law, the American Cancer Society and the American Public Health Association wrote a letter defending Chevron in January. 

The group stated that overruling Chevron would cause “tremendous disruption” to publicly funded health insurance programs, the stability of the U.S. health care system and the health and wellbeing of patients.

“Overruling Chevron would have enormous impact on the administration of federal programs – including Medicare, Medicaid, and CHIP – that are critical to public health,” the letter read.

In recent years, behavioral health providers have increasingly moved into the Medicare and Medicaid markets.

In May, virtual mental health provider Talkspace made its services available to 13 million Medicare beneficiaries in 11 states and announced plans to expand its coverage to all traditional Medicare members and several Medicare Advantage plans by the end of 2024. 

Opioid use disorder (OUD) provider Boulder Care has contracts with dozens of Medicaid managed care organizations (MCOs), and more than 85% of the provider’s patients receive benefits through Medicaid. 

Changes to federal insurance plans have negatively impacted behavioral health providers in the past. In February, Universal Health Services (NYSE: UHS) attributed a decline in its child and adolescent business to Medicaid redeterminations.