Looking Back on 2024: Two Litigation Events that Could Significantly Impact Healthcare’s Future

Major events of 2024 delivered heavy helpings of dispute, debate, and contention. Alongside the clashes in politics and culture, healthcare has faced cybersecurity disruptions, workforce shortages, and financial uncertainty. Perhaps somewhat more quietly, two litigation developments could result in significant changes to healthcare industry compliance standards and practices.

June 28, 2024 Chevron Doctrine Overturned

The US Supreme Court’s decision, Loper Bright Enterprises v. Raimondo and Relentless v. Department of Commerce reversed the previous court ruling of Chevron v. Natural Resources Defense Council, Inc., which ruled that courts should consider the reasonable interpretations of relevant federal agencies that administer the statutes in question.

From Chevron:

“The Court reasoned that those with “great expertise and charged with responsibility for administering the provision would be in a better position to do so…Judges are not experts in the field, and are not part of either political branch of the Government.” Chevron, 467 US, 865.

However, Loper requires courts to rely on their independent judgment and outlaws deference to agency interpretations. This is likely to have a significant impact on healthcare, a highly federally regulated industry that has historically depended on guidance for statute interpretation. Specifically, guidance from the Centers for Medicare and Medicaid Services’ (CMS) may no longer provide the same practical clarity for the healthcare industry. 

BFMV will keep up with developments around this topic and possible shifts in fair market value, volume or value standard, and commercial reasonableness compliance efforts regarding the Stark Law, Anti-Kickback Statute, and False Claims Act throughout 2025.

September 30, 2024 Qui Tam Provision Ruled Unconstitutional by Middle District Florida Judge

A qui tam relator who brought allegations of false claims made to CMS by her former medical provider employers was found to be an “improperly appointed Officer” of the executive branch by a federal judge in Florida. Citing the Appointments Clause in Article II of the Constitution, the judge ruled in U.S. ex rel. Zafirov v. Florida Medical Associates, LLC, et al. that qui tam enforcement of the False Claims Act (FCA) is unconstitutional.

The judge dismissed the false claims case based on prejudice through the constitutional premise. While Zafirov may be appealed, the larger impact of publicly delegitimizing whistleblower authority may have ripple effects on fraud litigation in healthcare and other industries. The qui tam “whistleblower” provisions of the FCA have existed since the Civil War, with over 712 qui tam suits filed in 2023. The Department of Justice recovered over $2 billion in FCA settlements and judgments in 2023 alone, which no doubt serves to deter blatant FCA fraud. Removing the power of whistleblower action may drastically reduce the effectiveness of the FCA and resulting compliance practices within the healthcare industry.

BFMV will also continue to stay informed about the ongoing developments around the qui tam provision and its inherent impact on our industry.