Agencies Can’t Make up the Rules as They Go

As we enter the first year of post-Loper Bright v. Raimando, the landmark U.S. Supreme Court decision overturning so-called Chevron deference, healthcare providers should push back even more against unjust and inaccurate Medicare- and Medicaid-alleged overpayments, suspensions, and terminations.

Everything you do should orbit this principle.

The decision has been reinforced by 2026 district court decisions limiting U.S. Department of Health and Human Services (HHS) authority.

Judges have been shown to be receptive to the following:

• Statutory text arguments;
• Anti-guidance arguments; and
• Procedural violations.

Termination/Revocation Defense Strategy

A. Ultra Vires (Exceeded Authority) Argument

Use when:

The Centers for Medicare & Medicaid Services (CMS), a Unified Program Integrity Contractor (UPIC), or state Medicaid entity relies on:

• Manuals;
• Local Coverage Determinations (LCDs);
• “Program integrity” language; or
• Artificial intelligence (AI) findings (!!)

The argument is: the agency’s action exceeds its statutory authority and must be set aside as ultra vires. Congress, not CMS or its contractors, defines the scope of permissible exclusion and participation. Where the agency relies on sub-regulatory guidance or generalized “program integrity” concerns untethered to statutory text, its actions are unlawful. Again, see Loper Bright v. Raimondo (rejecting judicial deference to agency interpretations lacking clear statutory grounding).

How to make this hit harder? Force the agency to cite the exact statute. Then show that the statute is silent (i.e., the agency “filled the gap.”) Judges are now far more willing to say that “you don’t get to fill that gap anymore.”

B. “Guidance Is Not Law” Argument

Use when the government cites:

• Medicare manuals;
• FAQs; or
• Internal audit criteria.

The argument: CMS’s reliance on sub-regulatory guidance violates fundamental administrative law principles. Guidance documents – including manuals, FAQs, and contractor policies – do not carry the force of law and cannot form the basis for adverse action.

C. Due Process plus Property Interest against a provider

The argument: plaintiff has a protected property interest in continued participation in Medicare and Medicaid programs and the receipt of reimbursement for services lawfully rendered. The government’s actions – taken without adequate notice, evidentiary support, or opportunity to confront adverse evidence – violate procedural due process.

Medicaid Termination/Exclusion Strategy (Post-2026 Cases)

After the 2025–2026 cases, you must pivot. Do not rely on the “patient’s right to choose provider” (weakened by Medina v. Planned Parenthood South Atlantic).

What to rely on:

A. Procedural Violations

Even where states retain discretion over Medicaid participation, that discretion is not unfettered, and must comply with federal and state procedural safeguards.

B. Arbitrary and Capricious

The agency’s determination is arbitrary and capricious where it:

• Ignores contrary evidence;
• Relies on flawed audit methodologies; or
• Fails to explain deviations from prior practice.

C. Equal Treatment / Selective Enforcement

The agency’s selective enforcement against this provider, while similarly situated providers remain enrolled, raises serious concerns of arbitrary enforcement and unequal treatment.

In the Medicare/Medicaid contract termination/suspension scenario, an injunction is needed, expensive, and difficult to prove.

But if your company will cease to exist should your Medicare/Medicaid contract is terminated/suspended, then you have no choice.