The Supreme Court just limited federal power. Healthcare is taking a hit.

A landmark Supreme Court decision that limits the power of federal agencies will likely have dramatic consequences for the nation’s health care system, challenging government rules on everything from consumer protections to drug safety to nursing home care.

The June 28 decision overturns a 1984 precedent that held that courts should show deference to federal agencies when faced with legal challenges to their regulatory or scientific decisions. Instead of giving precedence to agencies, courts will now exercise their own independent judgments about Congress’s intent when crafting a particular law.

The ruling is likely to have seismic implications for health policy. A flood of lawsuits — with plaintiffs like small businesses, drugmakers and hospitals challenging regulations they say are not specified in the statute — could leave the country with a patchwork of divergent health regulations that vary by location.

Agencies like the FDA will likely be much more cautious when crafting regulations, Congress will likely spend more time fine-tuning legislation to avoid legal challenges, and judges will be more likely to strike down current and future regulations.

Health policy leaders say patients, providers and health systems should brace for more uncertainty and less stability in the health care system. Even routine government functions, such as setting rates for paying doctors to treat Medicare beneficiaries, could become embroiled in lengthy legal battles that disrupt patient care or require providers to adapt.

Anti-regulation groups could seek out and secure biased judges to reverse agency decisions, said Andrew Twinamatsiko, director of the Health Policy and the Law Initiative at Georgetown University’s O’Neill Institute. One example is the challenge to the FDA’s approval of an abortion drug that survived a Supreme Court challenge on procedural grounds.

“Judges will be more emboldened to challenge agency decisions,” he said. “That will make agencies vulnerable to attack.”

The regulations are essentially technical instructions for laws written by Congress. Federal agency employees with expertise in the law—for example, rare disease drugs or senior health care—decide how to translate Congress’s words into action, with input from industry, advocates, and the public.

Until now, when agencies issued regulations, there was typically a single rule that applied nationwide. But after the high court ruling, lawsuits filed in more than one jurisdiction could result in conflicting rulings and regulatory requirements — meaning health care policies for patients, providers, or insurers could vary widely from area to area.

For example, one district may follow regulations issued by the Centers for Disease Control and Prevention, while other districts may disagree.

“You can have eight or nine of 11 different views about the courts,” said William Buzbee, a law professor at Georgetown University.

A court in one district can issue a nationwide order enforcing its interpretation while another district disagrees, said Maura Monaghan, a partner at Debevoise & Plimpton. Few cases reach the U.S. Supreme Court, which can leave conflicting directives in effect for years.

In the near future, health policy leaders say agencies should brace for more litigation over controversial initiatives. For example, the Affordable Care Act’s requirement that most health plans cover preventive services is already in litigation. Multiple challenges to the mandate could mean different requirements for coverage of preventive care depending on where a consumer lives.

Drugmakers have filed a lawsuit seeking to stop the Biden administration from implementing a federal law that would force makers of high-priced drugs to negotiate prices with Medicare — a key part of President Joe Biden’s efforts to lower drug prices and control health care costs.

Parts of the health care industry can adopt reimbursement rates for physicians set by the Centers for Medicare & Medicaid Services because those specific rates are not written into law. The agency issues regulations that update payment rates for Medicare, the health insurance program for people 65 and older and disabled people under 65. Groups representing doctors and hospitals regularly gather in Washington to lobby against rate cuts.

And providers, including those backed by wealthy investors, have sued to block federal surprise billing rules. The No Surprises Act, which passed in 2020 and goes into effect for most people in 2022, aims to protect patients from unexpected out-of-network medical bills, especially for emergencies. The Supreme Court ruling is expected to spark more litigation over its implementation.

“This is really going to create a tectonic shift in the landscape of administrative regulation,” Twinamatsiko said. “The approach that’s been in place since 1984 has created stability. When the FDA or the CDC adopts regulations, they know those regulations are going to be followed. That’s been reversed.”

Industry groups including the American Hospital Association and AHIP, a trade group for insurers, declined to comment.

Agencies like the FDA that use their regulatory authority to make specific decisions, such as granting exclusive marketing rights after a drug is approved, will be vulnerable. The reason: Many of their decisions involve discretion and are not clearly defined by federal law, said Joseph Ross, a professor of medicine and public health at the Yale School of Medicine.

“The legislation that governs most work in the health care sector, such as the FDA and CMS, is not prescriptive,” he said.

FDA Commissioner Robert Califf said last year on an episode of the “Healthcare Unfiltered” podcast that he was “very concerned” about disruptions caused by judges overturning his agency’s scientific decisions.

The Supreme Court ruling will be particularly important for the nation’s federal health agencies because their regulations are often complex, creating the opportunity for even more fierce legal battles.

Cases that may not have been heard in court due to agency deference may now find more favorable outcomes.

“A whole host of existing laws could be vulnerable to attack,” said Larry Levitt, vice president of health policy at KFF.

Other consequences are possible. Congress could try to iron out more details as it crafts legislation to avoid challenges — an approach that could increase partisan gridlock and slow the already glacial pace of legislation, Levitt said.

Agencies are expected to be much more careful when creating regulations to ensure they do not go beyond the scope of the law.

The Supreme Court decision, taken by a majority vote of 6 to 3, was overturned Chevron USA vs. Natural Resources Defense Councilwhich said courts should generally support a federal agency’s interpretation of a statute as long as it is reasonable. Republicans largely praised the new ruling as necessary to ensure agencies do not overstep their authority, while Democrats said after the decision that it amounted to a judicial power grab.

This article was written by KFF Health Newsa nationwide newsroom that does in-depth journalism on health issues and is one of the main operational programs KFF — an independent source of health policy research, polling and journalism.