There has been a lot of news to analyze from Washington, D.C. in the last couple of weeks, and the result of the 2024 election will certainly impact the operational and investment landscape in senior care. But we are still wrapping our heads around perhaps the most consequential news of late for the industry, which was the Supreme Court’s overruling of the Chevron doctrine, the 40-year judicial standard that had given a lot of leeway for administrative bodies to interpret statutes and implement regulations across the country. The case overturning Chevron is known as Loper. Now, it is up to the courts to determine those administrations’ regulatory powers, and ultimately Congress will hopefully be much clearer when creating new regulations and statutes.
It is important to note that the Supreme Court’s ruling “does not call into question prior cases that relied on the Chevron framework,” lessening the potential regulatory and legal upheaval following the decision. But going forward, we can expect to see more legal challenges against new regulations, and the challengers will likely find more success. HHS would theoretically be more cautious in the future when creating new rules and move slower. That’s good from an investor’s perspective when evaluating stroke-of-the-pen risk in certain sectors. Another good thing is that the minimum staffing rule stands a very small chance of actually being implemented now, since current legal challenges will not take Chevron into consideration.
However, another effect of the decision could be a more inconsistent regulatory landscape across the country, as interpretations of new regulations could vary from court to court, rather than from one national organization like HHS. So, the attractiveness of different operational and investment markets from an M&A perspective could hinge on the either liberal or conservative make-up of their respective district courts. We’re in a whole new world, post-Loper, but crazier things are emanating from Washington these days.
