While hopeful that the Supreme Court’s recent Chevron decision will undermine the federal staffing mandate and lead to a more rational regulatory environment, leaders in the nursing home sector also are warning that the ruling could create a period of uncertainty and tumult.

Steve LaForte, director of corporate affairs and general counsel for Idaho-based Cascadia Healthcare, is curious to see how the decision will play out in practicality. It’s a huge, broad-based change in how regulation works in the country, he said, and empowering courts to interpret statutes without deferring to federal agency interpretations could lead to inconsistent results with nursing home lawsuits.

It’s a point that Jason Keck, a partner at Fisher Phillips law firm in Chicago, made in a recent piece published on JD Supra.

“Without a uniform deference standard, different courts in different states may interpret statutes in wildly varied ways, creating a patchwork of compliance requirements across the country,” Keck wrote. “This, of course, can be challenging for employers in the healthcare industry operating across multiple states.”

Employers, regulators alike will evolve

While its effect on staffing mandate challenges is generally positive, Clifton J. Porter II is a “little cautious” when it comes to the broader implications of the Chevron ruling; Porter is the incoming president and CEO for the American Health Care Association and National Center for Assisted Living (AHCA/NCAL) and currently serves as senior vice president of government relations for the association.

The nursing home industry has many regulations that fall into that category of being vague and up for different interpretations, he said, including those issued by the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS).

“Courts have funny interpretations and you just don’t know. But we’re optimistic and grateful for the decision,” he said.

There’s a chance that operators can challenge regulation more easily, to push back against facility audits in court, Porter said. Rules on Medicare reimbursement rates, conditions of participation, billing requirements and prescription drug pricing are some other agency regs that could be affected by the Chevron decision, Keck wrote in his piece.

LaForte agrees that the Chevron decision will likely undermine the federal staffing mandate, noting that a win in court could be an easier route to quashing the mandate than waiting for Congressional action. He also anticipates that the Chevron ruling will open discussions among attorneys of best practice standards, and that other CMS regulations could be challenged and changed or overturned.

“Long term, I think that it’s going to dampen some of what I view as arbitrary and capricious rulemaking by CMS,” he said.

But, this could mean more timely and costly litigation, since regulatory action would still need to be successfully challenged in court in order to benefit from the Chevron decision. And nothing is stopping CMS and HHS from continuing vigorous enforcement measures, noted Keck.

Rationalizing an irrational regulatory construct

Porter said the Chevron decision might rationalize an irrational and inconsistent regulatory construct nursing homes currently need to abide by.

“It’s geographically different,” Porter said of regulation. “It’s the only sector where an ‘A’ is not an ‘A.’ Usually you know what your grading scale is, you know what the syllabus is, you know what the book is, you know the rules and you work to the rules, you get a fair grade. In our case, that’s just not the case.”

Instead, regulations are vague, they’re broad and they’re up for interpretation, he said. And going back to geography, some states could fine a facility $100,000 and another state may not cite a facility at all for the same issue.

“It’s just bizarre. We’ve got to change that,” Porter said of such inconsistency, especially with regard to audits and the survey process. “It shouldn’t matter who the teacher is, the inspector, it shouldn’t matter who that is.”

There could be a variety of ripple effects, if the Chevron decision impacts the state survey process If it results in a more stable and consistent process, that means a less stressed workforce, and a less stressed staff member is less likely to leave a nursing home job or the field as a whole.

“The regulatory construct is not something that makes our industry appealing. There are a lot of other places that are easier to work, and a lot more fulfilling, and you don’t feel like you get beat up every day about something that in the real world is relatively insignificant,” said Porter. “Chevron rationalized the regulations … That’s going to be my focus, at least over the next year, is really rationalizing these things.”

How Chevron could affect amount of litigation

On the flip side, the judicial process can be time consuming and costly. There could be more litigation brought by employers if they think they have a better chance now at challenging regulations, but they still need the resources to see such efforts through.

In addition, much of the litigation will flow through federal district courts, and “you get a lot of weird results from district courts,” LaForte said.

In other words, since court interpretation was given more power with the Chevron decision, that also means parties involved in litigation are at the mercy of inconsistent results based on the area of the country where they are located and the way judges in that area rule

Keck said there could be a period of “regulatory flux,” in which courts reassess existing agency interpretations. And, not every agency action will be susceptible to attack. This will lead to complicated compliance and strategic efforts among nursing home operators.

Government enforcement actions, investigations and whistleblower lawsuits might diminish as well, since the court may be unwilling to defer to agency interpretation of fraud and abuse laws, according to Keck.

And an initial victory in court could ultimately be reversed.

“Then you’ve got to go through the appeals process. That’s another year, it’s another two years, and it’s another hundreds of thousands of dollars, maybe millions in costs,” LaForte said. “I think there’s two sides of the coin.”