- The Trump administration on Friday finalized a rule requiring HHS to review existing regulations, with some exceptions, every 10 years based on their real-world impact.
- If not reviewed and approved in time, old rules would automatically expire. When proposed in November, the rule sparked concern among providers and other groups concerned it would inject more regulatory uncertainty into the industry, and heap additional administrative burden onto HHS. The incoming Biden administration could look to overturn the rule.
- The final version of the rule gives HHS more leniency in its initial review timeline. The government first determines whether a rule has a significant economic impact on small businesses and, if it does, make any changes or withdrawals within five years, instead of the initially proposed two.
Past presidents have tried to enact stricter retrospective review of regulations to make sure they're not outdated and are functioning as designed since President Jimmy Carter signed the Regulatory Flexibility Act in 1980.
Yet 85% of HHS regulations created before 1990 have never been edited once, an agency data analysis found. HHS also has almost 300 broken citation references in the Code of Federal Regulations, meaning the regulations reference another that no longer exists.
And agencies are already required to run a cost-benefit analysis of regulations in advance of implementation, but efforts to forecast the future cost of regulations are almost completely theoretical, HHS Chief of Staff Brian Harrison told reporters on a Friday morning call.
That's why it's important to analyze rules retrospectively, and eliminate any that no longer work, HHS contends. The department updates a significant number of regulations each year, but this final rule is the first imposing a structure for the agency to review roughly 18,000 existing regulations.
The rule to sunset regulations issued by HHS affects a broad range of powerful agencies, including CMS and the Food and Drug Administration.
CMS' annual Notice of Benefit and Payment Parameters update rules are exempt, as are certain FDA device-specific, food standard and over-the-counter drug specific regulations. It also doesn't apply to agency guidances.
The initial text of the rule proposed Nov. 4 gave HHS only two years to assess rules more than 10 years but the final rule extends the deadline to five years. The secretary of HHS can also extend the review deadline once per regulation, by up to a full year.
If a regulation isn't reviewed within that timeframe, it will automatically expire.
Many trade associations commented it could create additional uncertainty in the already hyper-regulated space, though they approved of reviewing and nixing outdated rules.
"While we appreciate that this process has the potential to alleviate some regulatory burden for our hospital and health system members, we have substantial concerns that it does not provide an adequate mechanism for obtaining public input on the substance of regulations being reviewed," hospital lobby the American Hospital Association wrote in comments on the rule submitted Friday.
The final rule requires HHS to publicize in the Federal Register each month what assessments are being conducted. The public will also be able to comment on regulations under review via the regular input process. Additionally, the first reviews aren't due until 2026.
The Trump administration is hustling to solidify last-minute health priorities before President-elect Joe Biden is inaugurated Jan. 20. HHS has issued a recent flurry of regulations, many with extraordinarily short comment periods despite their significant real-world impacts.
It's part of President Donald Trump's broader deregulatory agenda. However, some critics said the rule could be a big administration imposition on an already-taxed department that's struggled over Trump's tenure to balance controversial policy priorities and its COVID-19 response.
And shooting retrospective reviews to the top of HHS' regulatory priorities could prevent the department from doing other important work, complicating efforts by the Biden administration to enact health priorities and thwarting issuance of new regulations, some legal experts pointed out.
Biden's administration could roll back the rule if it wanted, though HHS' Harrison said he didn't expect the move.