Proposed Rule2021-22503
Department of Health and Human Services Proposed Repeal of HHS Rules on Guidance, Enforcement, and Adjudication Procedures
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 20, 2021
Issuing agencies
Health and Human Services Department
Abstract
The Department of Health and Human Services (HHS or the Department) is proposing to repeal two final rules: ``Department of Health and Human Services Good Guidance Practices,'' published in the Federal Register of December 7, 2020; and ``Department of Health and Human Services Transparency and Fairness in Civil Administrative Enforcement Actions,'' published in the Federal Register of January 14, 2021.
Full Text
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[Federal Register Volume 86, Number 200 (Wednesday, October 20, 2021)]
[Proposed Rules]
[Pages 58042-58053]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-22503]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Part 1
RIN 0991-AC29
[HHS-OS-2020-0008; HHS-OS-2021-0001]
Department of Health and Human Services Proposed Repeal of HHS
Rules on Guidance, Enforcement, and Adjudication Procedures
AGENCY: Office of the Secretary, Department of Health and Human
Services.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Department of Health and Human Services (HHS or the
Department) is proposing to repeal two final rules: ``Department of
Health and Human Services Good Guidance Practices,'' published in the
Federal Register of December 7, 2020; and ``Department of Health and
Human Services Transparency and Fairness in Civil Administrative
Enforcement Actions,'' published in the Federal Register of January 14,
2021.
DATES: To be assured consideration, comments must be received at the
address provided below, no later than 11:59 p.m. November 19, 2021.
ADDRESSES: You may submit comments through the Federal eRulemaking
Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the ``Submit a comment''
instructions. Warning: Do not include any personally identifiable
information (such as name, address, or other contact information) or
confidential business information that you do not want publicly
disclosed. All comments may be posted on the internet and can be
retrieved by most internet
[[Page 58043]]
search engines. No deletions, modifications, or redactions will be made
to comments received. Inspection of Public Comments: All comments
received before the close of the comment period will be available for
viewing by the public, including personally identifiable or
confidential business information that is included in a comment. You
may wish to consider limiting the amount of personal information that
you provide in any voluntary public comment submission you make. HHS
may withhold information provided in comments from public viewing that
it determines may impact the privacy of an individual or is offensive.
Warning: Do not include any personally identifiable information (such
as name, address, or other contact information) or confidential
business information that you do not want publicly disclosed. For
additional information, please read the Privacy Act notice that is
available via the link in the footer of <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the search instructions on that website to view the public
comments.
FOR FURTHER INFORMATION CONTACT: Daniel J. Barry, Acting General
Counsel, 200 Independence Avenue SW, Washington, DC 20201. Email:
<a href="/cdn-cgi/l/email-protection#c087afafa487b5a9a4a1aea3a580a8a8b3eea7afb6"><span class="__cf_email__" data-cfemail="b4f3dbdbd0f3c1ddd0d5dad7d1f4dcdcc79ad3dbc2">[email protected]</span></a>. Telephone: 877-696-6775.
SUPPLEMENTARY INFORMATION:
I. Overview of the Proposed Rule
HHS is proposing to repeal two rules that were issued in December
2020 and January 2021 to implement Executive Orders (E.O.s) issued on
October 9, 2019. One rule relates to guidance document procedures and
the other relates to civil administrative enforcement and adjudication
procedures. The Department codified both rules collectively in 45 CFR
part 1.
On January 20, 2021, the President, under a new administration,
revoked both E.O.s that served as the basis for these rules and
directed agencies to promptly take steps to rescind any rules and
policies implementing or enforcing the revoked E.O.s, as appropriate
and consistent with applicable law. Accordingly, the Department has
reconsidered these rules and now believes that they create unnecessary
hurdles that hinder the Department's ability to issue guidance, bring
enforcement actions, and take other appropriate actions that advance
the Department's mission. The Department continues to abide by its
longstanding commitment to follow applicable principles of due process
and administrative law, as a matter of policy; however, upon further
reflection, we now conclude that these rules significantly burden the
Department and are inconsistent with the policies and goals of the
current Administration. Both rules created a single set of procedures
for guidance documents and civil enforcement for the entire Department,
which we believe is contrary to the efficient and effective
administration of the wide array of programs by the Department, given
the diversity of those programs. For these reasons, as discussed in
greater detail in this document, and consistent with the President's
January 20, 2021, directive, we are proposing to repeal both rules.
II. History of the Rulemaking
On October 9, 2019, the White House issued two E.O.s: Executive
Order 13891, ``Promoting the Rule of Law Through Improved Agency
Guidance Documents,'' 84 FR 55235 (Oct. 15, 2019) (E.O. 13891) and
Executive Order 13892, ``Promoting the Rule of Law Through Transparency
and Fairness in Civil Administrative Enforcement and Adjudication,'' 84
FR 55239 (Oct. 15, 2019) (E.O. 13892). These E.O.s served as the basis
for two rules promulgated by the Department in December 2020 and
January 2021: ``Department of Health and Human Services Good Guidance
Practices,'' 85 FR 78770 (Dec. 7, 2020) (GGP rule or the HHS GGP final
rule, effective January 6, 2021), and ``Department of Health and Human
Services Transparency and Fairness in Civil Administrative Enforcement
Actions,'' 86 FR 3010 (Jan. 14, 2021) (the Civil Enforcement rule,
effective January 12, 2021). The Department codified both rules
collectively in 45 CFR part 1. Shortly after the rules became
effective, on January 20, 2021, the President, under a new
administration, issued Executive Order 13992, which revoked both E.O.s
that served as the basis for these rules. 86 FR 7049 (Jan. 25, 2021).
A. Revoked Executive Orders
E.O. 13891, ``Promoting the Rule of Law Through Improved Agency
Guidance Documents,'' required agencies to treat guidance documents as
non-binding both in law and in practice, except as incorporated into a
contract; take public input on guidance documents into account; and
make all guidance documents available on a single website. 84 FR 55235.
E.O. 13892, ``Promoting the Rule of Law Through Transparency and
Fairness in Civil Administrative Enforcement and Adjudication,''
imposed a number of procedural hurdles on agencies engaged in civil
administrative enforcement or adjudication. 84 FR 55239. As noted, both
of these E.O.s have since been rescinded. 86 FR 7049.
However, prior to the rescission of these E.O.s, and consistent
with the directive in E.O. 13891, the Department published the GGP
rule. Although E.O. 13892 did not require rulemaking, the Department
also published a final rule to implement E.O. 13892, the Civil
Enforcement rule.
B. GGP Rule
On August 20, 2020, consistent with the requirements of E.O. 13891,
HHS published a notice of proposed rulemaking entitled ``Department of
Health and Human Services Good Guidance Practices,'' the stated purpose
of which was to ``promote the appropriate issuance and use of guidance
documents . . .'' 85 FR 51396. The rule's stated intent was to increase
accountability, improve the fairness of guidance issued by the
Department, guard against unlawful regulation through guidance, and
safeguard the important principles underlying the United States
administrative law system. Id.
The major provisions of the HHS GGP proposed rule were: (1) A
requirement that each guidance document issued by the Department
generally include certain information, including a statement that the
guidance does not have the force and effect of law and is not binding
unless specifically incorporated into a contract; (2) heightened
procedures for ``significant guidance documents,'' including a period
of notice and comment, a requirement for HHS Secretary (Secretary)
approval on a non-delegable basis, and a requirement for submission to
the Office of Information and Regulatory Affairs (OIRA) for review
under Executive Order 12866; (3) creation of a repository for all
guidance documents along with a provision stating that guidance
documents not in the repository are not effective and will be
considered rescinded; and (4) procedures for the public to petition the
Department to withdraw or modify any particular guidance document.
HHS proposed that its new requirements for guidance would apply to
all components of the Department except for the Food and Drug
Administration (FDA). 85 FR 51396. The preamble to the HHS GGP proposed
rule explained that FDA already operates under a set of GGP
regulations, see 21 CFR 10.115, as required by the Federal Food, Drug,
and Cosmetic Act (FD&C Act), 21 U.S.C. 371(h); no other agency within
HHS functions under a similar set of regulations or statutory
[[Page 58044]]
provisions. 85 FR 51396. FDA's GGP regulations have been in effect for
more than two decades. See 21 CFR 10.115. The preamble also explained
that FDA would be proposing amendments to its GGP regulations to
address E.O. 13891 separately. 85 FR 51396.
The Department followed the notice of proposed rulemaking with a
correction on August 26, 2020. 85 FR 52515. The correction changed
certain dates by which documents would be required to be in the
guidance repository or else be deemed rescinded.
During the comment period for the notice of proposed rulemaking,
the Department received nearly 90 comments on the proposed rule. 85 FR
78771. The comments are available at <a href="https://www.regulations.gov/document/HHS-OS-2020-0008-0001/comment">https://www.regulations.gov/document/HHS-OS-2020-0008-0001/comment</a>.
The Department issued the HHS GGP final rule on December 7, 2020.
85 FR 78770. In response to public comment and the Department's further
consideration of the policies addressed in the rule, the HHS GGP final
rule made several changes to the proposed rule. First, in addition to
the requirement in the proposed rule that the Secretary approve, on a
non-delegable basis, all significant guidance documents, the final rule
added the requirement that the Secretary approve, on a non-delegable
basis, all non-significant guidance documents that the Secretary
determines would implicate a policy matter of priority to the
Secretary; potentially create a serious inconsistency; or otherwise
interfere with an action taken or planned by another HHS agency or the
Office of the Secretary. Id. at 78786.
Second, the HHS GGP final rule added more detail on what
information the Department needs to provide when responding to a
petition to amend or withdraw guidance, including a statement on
whether the Department agrees or disagrees with the petition and its
rationale. 85 FR at 78787.
Third, although FDA had been excluded from the scope of the HHS GGP
proposed rule, the final rule included FDA within its scope. 85 FR at
78785. The preamble to the HHS GGP final rule explained that one
commenter had urged HHS to amend FDA's good guidance practices
regulations to be consistent with the requirements in the HHS GGP
proposed rule. 85 FR 78771. HHS agreed with this comment, and then
explained that, because the FDA regulations had not yet been amended to
address E.O. 13891, FDA would be included in the HHS GGP final rule
until the Secretary issued a final rule amending FDA's separate GGP
regulations. Id.\1\
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\1\ In fact, the Department did not issue a proposed or final
rule to amend FDA's GGP regulations to address E.O. 13891 before
January 20, 2021, when E.O. 13891 was revoked.
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The Department codified the GGP rule in 45 CFR 1.1 through 1.5.
C. Civil Enforcement Rule
On January 14, 2021, HHS issued a final rule entitled ``Department
of Health and Human Services Transparency and Fairness in Civil
Administrative Enforcement Actions.'' 86 FR 3010 (Jan. 14, 2021). The
Civil Enforcement rule, which was issued as a procedural rule without
notice-and-comment rulemaking, stated that it was intended to provide
regulated parties with greater transparency and fairness in
administrative actions and to be consistent with the requirements of
E.O. 13892. 86 FR 3010. The Department stated that ``[t]he rule is
designed to ensure accountability, fairness of how the Department uses
guidance, proper use of guidance documents, and opportunities for third
parties to be heard, and to safeguard the important principles
underlying the United States administrative law system.'' 86 FR 3011.
The rule contains a number of provisions, including the following:
(1) A requirement that the agency avoid unfair surprise by only
applying standards and practices in a civil enforcement action that
have been publicly stated; (2) a requirement that if the agency relies
on a decision to assert new or expanded claims of jurisdiction, it must
publish the initial decision in the Federal Register or the
Department's guidance repository before the conduct over which the
jurisdiction is sought occurs; and (3) a requirement that the
Department give parties--before the agency takes a civil enforcement
action--written notice of its initial legal and factual determinations,
an opportunity to respond in writing and in certain cases orally, and a
written response to the affected entity (when timely requested).
The Department codified the Civil Enforcement rule in 45 CFR part
1, by revising Sec. Sec. 1.1 and 1.2, and adding Sec. Sec. 1.6
through 1.9.
III. Legal Authority
The legal authority for this proposed rule is 5 U.S.C. 301. That
provision states in relevant part that ``[t]he head of an Executive
department or military department may prescribe regulations for the
government of his department, the conduct of its employees, the
distribution and performance of its business, and the custody, use, and
preservation of its records, papers, and property.'' Both the HHS GGP
final rule and Civil Enforcement rule relied on the same authority.
IV. Discussion of Proposed Rule
This proposed rule, if finalized as proposed, would repeal both the
GGP rule and the Civil Enforcement rule, codified collectively in 45
CFR part 1. 45 CFR part 1 would be reserved. This repeal is consistent
with the policies of the Biden-Harris Administration as reflected in at
least three E.O.s issued by President Biden. First, Executive Order
13992, which is titled ``Revocation of Certain Executive Orders
Concerning Federal Regulation,'' 86 FR 7049 (Jan. 25, 2021) (E.O.
13992), revoked both EOs 13891 and 13892 and directed agencies to
promptly take steps to rescind any orders, rules, regulations,
guidelines, policies, or portions thereof, implementing or enforcing
the revoked EOs, as appropriate and consistent with applicable law. As
explained in Section II, History of the Rulemaking, the Department
drafted the HHS GGP final rule and Civil Enforcement rule in direct
response to the revoked EOs; hence, the department has reconsidered
these rules and has determined it is appropriate to rescind these rules
in accordance with section 3 of E.O. 13992.
Further, E.O. 13992 states that it is the policy of the current
Administration to use available tools to confront the urgent challenges
facing the nation, including the coronavirus disease 2019 (COVID-19)
pandemic, economic recovery, racial justice, and climate change. Id.
E.O. 13992 explained that to tackle these challenges effectively,
executive departments must be equipped with the flexibility to use
robust regulatory action to address national priorities. Id. The order
also stated that it was revoking ``harmful policies and directives that
threaten to frustrate the Federal Government's ability to confront
these problems'' and was empowering agencies to use appropriate
regulatory tools to achieve these goals. Id. As explained in greater
detail in this document, the Department concludes that both the HHS GGP
final rule and Civil Enforcement rule inappropriately constrict the
Department's ability to efficiently interpret and enforce regulations.
Thus, both rules are inconsistent with the policy expressed in E.O.
13992 Sec 1, and we are proposing that they be rescinded.
Second, the E.O. titled ``Advancing Racial Equity and Support for
Underserved Communities Through the Federal Government,'' 86 FR 7009
(Jan. 25, 2021) (E.O. 13985), states that it is
[[Page 58045]]
the policy of the Biden-Harris Administration for the Federal
Government to pursue a comprehensive approach to advancing equity for
all, including people of color and others who have been historically
underserved, marginalized, and adversely affected by persistent poverty
and inequality. The E.O. directed agencies to recognize and work to
redress inequities in their policies and programs that serve as
barriers to equal opportunity. Id. Further, both the HHS GGP final rule
and the Civil Enforcement rules have a disproportionate effect on
marginalized and vulnerable historically underserved communities,
because they make it harder for agencies to take action to protect
public health or remove bad actors from the market, which in turn harms
those who need HHS services the most. For the GGP rule, commenters
serving underserved communities explained that programs like Medicaid
and CHIP rely on guidance to run the program effectively, and the
effectiveness of the program directly affects the children, older
adults, people with disabilities, and families these programs serve.
Thus, a rule that hinders the publication of guidance may in turn harm
the programs and the populations served, who rely on guidance documents
to clarify program coverage requirements and have fewer resources to
determine, for example, how and why guidance may be rescinded. Further,
commenters pointed out that agency specific websites, such as
<a href="http://Medicaid.gov">Medicaid.gov</a>, provide easy access to all the applicable guidance. While
the rule did not preclude agencies from maintaining topical websites
that contain agency specific guidance, it is much easier for
organizations with limited resources serving marginalized communities
to check the topical websites for new guidance than to check the
repository to determine how and why and whether guidance may have been
rescinded.
Third, the E.O. titled ``Strengthening Medicaid and the Affordable
Care Act,'' 86 FR 7793 (Feb. 2, 2021) (E.O. 14009), states that it is
the policy of the Biden-Harris Administration for the Federal
Government to protect and strengthen Medicaid and the ACA and to make
high-quality healthcare accessible and affordable for every American.
The E.O. directs HHS, among others, to examine its regulations,
policies, and the like to ensure that they are consistent with the
policy of providing high quality and accessible health care for all,
and do not undermine protections for people with pre-existing
conditions under the ACA, reduce coverage under or otherwise undermine
Medicaid or the ACA, or undermine the Health Insurance Marketplace or
the individual, small group, or large group markets for health
insurance in the United States. Because HHS frequently issues guidance
to clarify policies and beneficiary protections under Medicaid, the
additional regulatory hurdles and confusion created by the HHS GGP
final rule would likely undermine those goals by impeding and delaying
the issuance of Medicaid guidance.
In addition to being inconsistent with this Administration's E.O.s,
these rules created a single set of procedures for guidance documents
and civil enforcement for the entire Department, which is incompatible
with the efficient and effective administration of a Department as
large and diverse as HHS. The Department's mission is to enhance the
health and well-being of all Americans, and it accomplishes that
mission through the work of many individual agencies, including the
Administration for Children and Families (ACF), the Administration for
Community Living (ACL), the Centers for Disease Control and Prevention
(CDC), the Centers for Medicare & Medicaid Services (CMS), FDA, the
Indian Health Service (IHS), the National Institutes of Health (NIH),
and the Office for Civil Rights (OCR). Each of HHS's agencies plays a
critical role in protecting and advancing public health by, for
example, confronting the COVID-19 pandemic; administering and
overseeing the Medicaid and Medicare programs and Affordable Care Act
marketplace; providing federal health services to more than two million
American Indians and Alaska Natives; taking action to protect consumers
from unapproved, misbranded, or adulterated human or animal medical
products or tobacco products; investigating, detaining, and recalling
contaminated foods; addressing medical product shortages; enforcing
age-restrictions or other controls around access to certain regulated
products; and quickly distributing grant funds that help vulnerable
populations, low-income families, elderly Americans, Indian tribes, and
persons with disabilities to receive key resources, especially during
the COVID-19 pandemic. Each agency within HHS serves the overall
mission but does so in unique ways, often addressing different
stakeholders and using specialized regulatory tools.
The imposition of these uniform requirements interferes with
agencies' established practices and has disrupted agencies'
relationships with stakeholders. FDA also faces a separate challenge
with the GGP rule of simultaneously implementing two distinct GGP
regulatory frameworks--its own, and that of the HHS GGP final rule--
which is particularly inopportune at a time when rapid scientific
advancements, as well as ongoing efforts to address the COVID-19
pandemic, warrant that FDA retain the ability to issue and revise
guidance documents in a timely manner. As discussed in greater detail
in Section A.1, like FDA, other HHS agencies rely on this flexibility
to issue timely guidance and quickly share valuable information with
stakeholders. Further, as discussed in section B, HHS agencies have
developed their own processes for civil administrative enforcement that
are unique to the specific requirements of each program. Accordingly,
the Department no longer believes that a one-size-fits-all approach to
Department guidance or civil administrative enforcement is appropriate
and has concerns that the rules, imposing one set of requirements for
its vastly different HHS agencies, may hinder the agencies' abilities
to efficiently address public health issues, including but not limited
to public health emergencies.
In light of the reasons explained in this section, the Department
has taken a renewed and critical look at the HHS GGP and Civil
Enforcement rules and has concluded that both rules frustrate the
Department's ability to efficiently direct and operate in the interest
of public health and are inconsistent with the policies and goals of
the current Administration. The rules make Department operations more
cumbersome and burdensome, impeding the Department's ability to quickly
communicate its regulatory interpretations, policies, and
recommendations, and use robust tools such as circulars, bulletins,
advisories and other guidance documents to protect and advance the
national public health and to promote the Department's mission.
Accordingly, for the reasons previously stated, as well as specific
concerns with each rule discussed in this section, HHS is proposing to
repeal both rules in their entirety and remove 45 CFR part 1.
As a procedural matter, we have chosen to engage in notice-and-
comment rulemaking for both rules. The Civil Enforcement rule was
issued without notice and comment under the Administrative Procedure
Act (APA), 5 U.S.C. 553, because the Department determined that it was
a rule of agency organization, procedure, or practice. 86 FR 3010. The
requirements for notice and comment prior to finalization also do not
apply to regulations that involve ``a matter relating to agency
[[Page 58046]]
management or personnel.'' 5 U.S.C. 553(a)(2). Because the Department
issued the Civil Enforcement rule without going through notice-and-
comment rulemaking, HHS could repeal the Civil Enforcement rule without
prior notice and comment based on the well-established principle ``that
agencies use the same procedures when they amend or repeal a rule as
they used to issue the rule in the first instance.'' Perez v. Mortg.
Bankers Ass'n, 575 U.S. 92, 101 (2015). Similarly, although the
Department chose to issue the GGP rule through notice-and-comment
rulemaking, we note that generally the HHS GGP final rule involves
matters relating to agency procedure and practice that did not require
notice-and-comment rulemaking before promulgation. We also note that
other departments and agencies have recently rescinded similar rules,
and most have proceeded without notice-and-comment rulemaking at both
the initial rulemaking and repeal stage. Nevertheless, to ensure
transparency and public participation, and because the provisions of
the two rules are codified in the same part of the Code of Federal
Regulations with some overlapping and related provisions, the
Department has opted in its discretion--for substantive and procedural
clarity--to proceed with notice-and-comment rulemaking to repeal both
rules together and in their entirety.
A. GGP Rule (45 CFR 1.1 Through 1.5)
1. Department-Wide Concerns Regarding the HHS GGP Final Rule
The Department is proposing to repeal the HHS GGP final rule for
the following interrelated reasons: (1) It delays or prevents the
issuance of guidance documents, which provide valuable information to
stakeholders and the general public, including historically underserved
populations; (2) it imposes uniform, inflexible requirements on
agencies that do not adequately account for the agencies' different
operations and are likely to cause confusion among regulated entities
and members of the public; (3) it mandates the use of a guidance
repository and provides for the rescission of guidance absent any
active policy consideration by the agency, which may lead the public to
believe that certain active policies are rescinded; and (4) it diverts
limited agency resources that the Department now believes are better
directed elsewhere.
Delay or Prevent Issuance of Guidance Documents. The procedures
required in Sec. 1.3 for the issuance of guidance documents have the
potential to delay or impede the issuance of a significant portion of
HHS guidance documents that play an important part in effective
communication with stakeholders and enhance public health. For example,
the rule establishes substantial, time-consuming, and resource-
intensive requirements for the issuance of ``significant guidance
documents.'' See 45 CFR 1.3(b). Required procedures for significant
guidance documents include submitting such documents to the Office of
Information and Regulatory Affairs (OIRA) in the Office of Management
and Budget (OMB) for review prior to publication, providing a public
notice-and-comment process, generating an agency response to major
concerns raised during the comment period, complying with applicable
requirements for significant regulatory actions as set forth in
Executive Orders, and obtaining approval by the Secretary on a non-
delegable basis. Id. Each of these steps takes considerable time,
effort, and Department resources to accomplish. Moreover, under the
rule, all of these steps are required in combination before a
significant guidance can be finalized.
As a matter of the policy, the Department is no longer convinced
that these burdens are justified for non-binding agency guidance
documents. The additional procedures provide little value, because the
Department already has all the tools it needs to ensure adequate public
notice and participation in the guidance process, and a one size fits
all approach of the procedures fails to accommodate the range of
guidance practices of HHS operational divisions. Moreover, the net
effects of this requirement are serious burdens on the Department and
an overall process that could unduly extend the time needed to
promulgate significant guidance. This result is particularly concerning
if the definition of significant guidance is construed to apply to a
large number of guidance documents, in light of the potential
cumulative effects.
The GGP rule imposes additional steps on the process of issuing
non-significant guidance as well. For non-significant guidance, Sec.
1.3 requires Secretarial approval under certain circumstances, which
could delay the issuance of these guidance documents by drawing on the
Secretary's finite time and resources. Further, this requirement could
delay even non-significant guidance that do not require Secretarial
approval because the process requires the Secretary to make an
affirmative decision on whether a document requires Secretarial
approval.
The Department has determined that the delay or non-issuance of
guidance documents could have substantial negative consequences for the
public, including for regulated entities. Guidance holds an important--
and legally distinct--place in the Department's regulatory toolbox: It
provides an approach to communicating the Department's policies and
interpretations that can be more immediate and clearer than case-by-
case adjudication, as well as faster and more flexible than legislative
rulemaking. Through guidance, traditionally, the Department has been
able to quickly and responsively communicate its agencies' non-binding
current thinking regarding legal interpretations, recommendations, and
policies. Guidance can be helpful, for example, to provide information
relevant to a subset of regulated entities, address technical issues,
give current examples, and keep pace with rapid advancements in science
and technology. While this pathway has been important in a wide array
of contexts, it is essential in areas of uncertainty, confusion, or
rapid scientific or technological development, where clarity is needed
to protect the public health and foster industry confidence and
business investments.
Timely guidance is particularly important to parties that are
subject to Department regulation. Guidance can assist regulated
industries by helping guard against unequal treatment, unnecessary
costs, and unnecessary risk. For example, for medical product
developers who are engaged in expensive, multi-year development
programs with the ultimate objective of finding a proper path to
satisfy FDA's approval standards, guidance documents can provide
recommendations on how to satisfy regulatory requirements and can
describe how FDA staff applies those requirements to particular types
of situations. This allows developers to design and invest in their
product development strategy with more clarity and more confidence. The
timely issuance of FDA guidance documents helps to accelerate the
development and availability of innovative new products (or competitors
to products already on the market) by: Encouraging particular
methodologies, such as clinical trial models, to identify evidence that
helps expedite product review; giving advice on how emerging
technologies and breakthrough drugs and devices can meet FDA
requirements for approval or clearance; and explaining FDA processes
and procedures, including processes for premarket review, so developers
can navigate those processes more quickly.
[[Page 58047]]
Having a robust, efficient guidance system has been especially
critical during the COVID-19 emergency. FDA COVID-19-related guidance
documents have addressed shortages of essential products including
gowns, masks, gloves, and ventilators; the development of vaccines and
drug products to prevent and treat COVID-19; recommendations for
validating COVID-19 tests and evaluating the impact of viral mutations
on COVID-19 tests; and even COVID-19-related effects on the food supply
chain. The expeditious publication of the Office of Civil Rights
guidance related to the Health Insurance Portability and Accountability
Act (HIPAA) during the COVID-19 pandemic also served to communicate
critical information to health care providers and the public about
sharing and accessing protected health information. In the context of
Federal financial assistance, guidance allowed the agency to issue
grant funds quickly, which has been essential to providing states and
tribes with information on permissible uses of funds to help vulnerable
families, refugees, and foster children during the COVID-19 pandemic.
For example, ACF's Children's Bureau used a guidance document to
provide information to states on how they could use supplemental
funding under the Child Abuse Prevention and Treatment Act and the
Community-Based Child Abuse Prevention program provided by the American
Rescue Plan Act. By issuing guidance quickly, Children's Bureau was
able to, shortly after the passage of the law, provide states with
information on how to apply for the funds and use them so that the
funds could be used to promote the safety and well-being of children
during the on-going pandemic.
The Department expressed a contrary assessment in the final rule,
concluding that the benefits of receiving stakeholder input generally
outweigh any administrative costs or incremental delays. 85 FR 78778.
The Department also pointed to the exceptions process for significant
guidance documents under Sec. 1.3(b)(2)(ii), under which HHS could
elect not to conduct a comment period if it were to find that notice
and public comment are impracticable, unnecessary, or contrary to the
public interest. Id. The Department considered this exceptions process
to be sufficient to preserve flexibility during public health
emergencies. Id.
As a matter of policy, the Department is no longer convinced that
the benefits of receiving stakeholder input outweigh any administrative
costs or incremental delays in the case of public health emergencies.
The Department now disagrees that the exceptions process for
significant guidance documents provides sufficient flexibility for the
Department to respond to public health emergencies. To rely on the
exception under Sec. 1.3(b)(2)(ii), the Department would still need to
make findings that public comment would be impracticable, unnecessary,
or contrary to the public interest and incorporate the findings and a
statement of the reasons into the guidance document. Even if the
exceptions could be met during a public health emergency, these
additional processes would still need to be followed and would still
consume time and resources in a situation where time and resources are
limited. In addition, the unprecedented nature of the COVID-19 pandemic
has underscored the need for the Department to be able to act quickly
during public health emergencies.
Retaining the HHS GGP final rule, with its relative lack of
flexibility and procedural burdens that go far beyond what is needed
for a transparent and inclusive guidance process, unduly hampers the
Department's mission, particularly at this critical time. While the
Department is aware that the GGP rule permits significant guidance
documents to be exempted from applicable requirements ``if the
Secretary [of HHS] and the Administrator of OIRA agree that exigency,
safety, health, or other compelling cause warrants the exemption,'' the
documents may be exempted only if several burdensome conditions are
met. Specifically, for exemption, the Secretary and Administrator must
come to the described agreement, the Secretary ``must make this
finding,'' and ``the significant guidance document must incorporate the
finding and a brief statement of reasons in support.'' See 45 CFR
1.3(b)(4). Thus, even where this pathway is taken, as a matter of
policy HHS is now concerned that the procedural burdens of the rule may
inappropriately delay guidance during an emergency.
The Department has reconsidered the relative merits of an
efficient, flexible guidance process and weighed them against the
processes finalized in the HHS GGP final rule. Ultimately, the
Department favors an approach that is consistent with the
Administrative Procedure Act (APA), which exempts non-binding documents
like interpretive rules and general statements of policy from notice-
and-comment rulemaking requirements.\2\
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\2\ See, e.g., American Hosp. Ass'n v. Bowen, 834 F.2d 1037,
1045 (D.C. Cir. 1987) (``The reading of the [section] 553 exemptions
that seems most consonant with Congress' purposes in adopting the
APA is to construe them as an attempt to preserve agency flexibility
in dealing with limited situations where substantive rights are not
at stake.'').
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Confusing and Unhelpful Uniform Standards. As mentioned previously
in this document, the GGP rule imposes identical requirements on
agencies with different legal authorities and mechanisms for achieving
their mission. This attempt to fit vastly different documents into one
rubric is unnecessary, counterproductive, and likely to confuse the
public about the role of different documents. HHS now believes that
more flexibility is appropriate in light of the different roles and
responsibilities of the agencies within the Department.
For example, Sec. 1.3(a)(3)(i) of the GGP rule requires every
guidance document to bear the following statement: ``The contents of
this document do not have the force and effect of law and are not meant
to bind the public in any way, unless specifically incorporated into a
contract. This document is intended only to provide clarity to the
public regarding existing requirements under the law.'' Although the
Department previously concluded that this statement is unlikely to be
confusing, 85 FR 78778, upon reconsideration, the Department is now
concerned that this universal statement is not appropriate for and
cannot cover the range of HHS documents that fall within the definition
of ``guidance document'' under Sec. 1.2(a). A better approach would be
for each agency to provide information that is appropriate to the
agency's stakeholders and the expected uses of the particular document,
while acknowledging the document's non-binding nature under the APA. An
FDA guidance document may discuss enforcement priorities, for example,
and any standard guidance statement for FDA guidance should account for
that. An ACF document providing guidance on the requirements of a
regulation can indicate that its provisions may become incorporated
into the terms and conditions of a grant agreement, which has
contractual aspects that bind both the government and the grantee.
Furthermore, the Department is concerned that the required
statement that incorporation of provisions of a guidance document into
a contract would render the guidance binding may be confusing to the
public. While the terms of the contract may be binding, that is, the
contractual parties must
[[Page 58048]]
follow the guidance due to the contract terms, the guidance itself
remains non-binding. The GGP rule's required statement suggests, to the
contrary, that the nature of the guidance is altered by the contract.
The Department is similarly concerned about the ambiguity of the
term ``contract,'' especially as it relates to assistance agreements,
such as grants and cooperative agreements. While it is understood that
assistance agreements have contractual aspects, in several other
contexts the Department draws a clear legal and programmatic
distinction between contracts and assistance agreements. For example,
the Federal Grants and Cooperative Agreement Act, 31 U.S.C. 6301-6308,
distinguishes between grants and contracts by explaining that agencies
should use contracts for the direct benefit of the Federal Government,
and agencies should use grants when the principal purpose of an
agreement is the transfer of anything of value for a public purpose.
Nevertheless, both contracts and grants require entering into an
agreement that binds both parties to its terms, including terms found
in guidance documents. The undefined nature of such a key term in a
required disclaimer term could create uncertainty and confusion within
the Department and among the public.
Like the disclaimer on guidance documents, the definition of
``guidance'' in 45 CFR 1.2 is vague and overly broad and could lead to
confusion over the type of documents subject to the rule's
requirements. ``Guidance'' is defined, in part, as a ``Department
statement of general applicability, intended to have future effect on
the behavior of regulated parties and which sets forth a policy on a
statutory, regulatory, or technical or scientific issue, or an
interpretation of a statute or regulation.'' See 45 CFR 1.2(a). In
addition, the preamble to the HHS GGP proposed rule provided that
``guidance may come in a variety of forms, including, but not limited
to, letters, memoranda, circulars, bulletins, advisories, and preambles
and may include video, audio, and Web-based formats.'' 85 FR 51396.
Contrary to the previous conclusion that this definition is not
confusing, 85 FR 78772, upon reconsideration, this broad definition and
understanding could be read to encompass an entire range of documents
not intended to serve as guidance, such as resolution documents,
agreements and case closure letters, and memoranda published on
Department agency websites to inform and educate the general public and
regulated entities about agency enforcement activities.
HHS has rejected the alternative approach of addressing these
problems by revising the rule. It would be difficult to establish
definitions, standard descriptors, policies, and procedures that are
clear and that are workable across the Department's many components. As
a matter of policy, we now believe it is much better to allow
flexibility in approach. With the repeal of this rule, the agencies
would be able to develop policies, practices, and rules, consistent
with applicable law and as appropriate to their context, and they would
be able to update these over time as warranted. This more decentralized
approach is also consistent with the revocation of E.O. 13891, which
had taken a relatively centralized and standardized approach.
Repository. 45 CFR 1.4 provides for a repository that includes all
Department guidance documents. Section 1.4(a)(2) of the rule deems any
guidance document not in the repository rescinded. Although the
Department plans to maintain a guidance document repository, it now
considers the provisions of the HHS GGP final rule governing the
repository to be inappropriate and unnecessary, particularly with
respect to the rescission requirement for documents not in the
repository.
Although the Department previously concluded that the automatic
rescission of guidance documents not included in the repository would
improve transparency and decrease confusion, 85 FR 78781, upon
reconsideration, the Department now has serious reservations about that
conclusion. The rescission requirement creates additional burdens among
stakeholders by causing confusion about which guidance documents have
been rescinded, superseded, or otherwise become obsolete. Even if a
guidance document is posted on an HHS website, it is rescinded by the
GGP rule if it is not in the repository, see Sec. 1.4(a)(3)(ii);
rescission can occur simply because a guidance is not uploaded to or is
removed from the repository due to human error or technical failures,
even if it is publicly available elsewhere. The Department acknowledged
in the preamble to the final rule that accidental rescission can occur
in this manner. CMS has since encountered difficulties, particularly
when establishing automatic processes for publishing guidance documents
in the repository. These difficulties have required time and resources
to address, and at times CMS has had to resort to a cumbersome manual
process to publish the guidance documents. A concern is that, if any
document is omitted from the repository, even inadvertently, as a
result of using the manual approach, it is rescinded.
The Department also questions whether this rescission approach is
consistent with the APA. The APA requires that an agency consider
relevant factors and make policy choices based on those factors.\3\ It
is not clear that rescission of a policy due to human error, oversight,
or a technical failure meets these standards. In addition, the
Department is concerned that serious questions and problems would arise
if a guidance document is ``rescinded'' under the GGP rule, even for a
finite period of time, when the guidance in question continues to
reflect agency interpretations and policies. In that event, regulated
entities would face a high degree of uncertainty as to the Department's
current thinking--whether the current thinking is still the same as
described in the rescinded guidance or has changed significantly--
particularly in light of the possibility that the guidance may have
been unintentionally rescinded because of human error or technical
failure.
---------------------------------------------------------------------------
\3\ See Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29, 43
(1983) (courts ``consider whether the [agency's rescission] decision
was based on a consideration of the relevant factors'') (citations
and internal quotations omitted); F.C.C. v. Fox Television Stations,
Inc., 556 U.S. 502, 515 (2009) (``[T]he agency must show that there
are good reasons for the new policy.'').
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The GGP rule also does not address the situation in which guidance
documents are in the repository, but a regulated entity cannot access
or view them--for example, due to flaws in the repository search
function. For such documents, individuals may incorrectly believe that
documents are missing from the HHS repository, and therefore believe
that guidance has been rescinded and/or no longer represents the
Department's policy or interpretation. In that event, again, regulated
entities would risk taking actions based on a misunderstanding of the
Department's current interpretations and policies. Or, more likely,
regulated entities may have the added burden of inquiring with the
agency about whether the guidance is in the repository, either
informally or by petition, which would consume time and resources for
both the requestor and the Department.\4\ The Department is also
concerned that this structure may
[[Page 58049]]
cause regulated entities to restructure their compliance processes and
operations, which could be quite costly. With all these possible
concerns in mind, the Department invites stakeholders to comment on
their experience with the repository. Although we no longer think
automatic rescission is appropriate, the Department intends to retain
the repository and is interested in stakeholders' experience using it.
Specifically, the Department is interested in knowing whether
stakeholders have been able to easily find the guidance applicable to
them in the repository and how the Department can improve its usability
and utility.
---------------------------------------------------------------------------
\4\ Several commenters noted that they have no trouble finding
current guidance without the repository. One commenter pointed out
Medicaid guidance can easily be accessed through the ``Federal
Policy guidance'' tab on <a href="http://Medicaid.gov">Medicaid.gov</a> website. Another commenter
suggested that guidance documents on topical web pages was more
helpful than the repository, which was not indexed.
---------------------------------------------------------------------------
As noted earlier in this section, the Department believes that
there is value in an online guidance database, and currently plans to
retain a guidance document repository. However, upon reconsideration,
the Department does not see a need to establish this administrative
tool by regulation. Particularly in light of the experience of the
COVID-19 pandemic, the Department now believes that flexibility is
preferable to rigid requirements. The Department's current
understanding has also been reinforced upon observing the technical
challenges associated with a centralized repository. The Department
believes that the better approach would be to engage with the
individual agencies to develop the most efficient and user-friendly
repository system that has the flexibility to change with improving
technology and experience, and not to be constrained by regulatory
requirements. If the proposed repeal of the HHS GGP final rule is
finalized, the Department currently intends for the repository at
<a href="http://www.hhs.gov/guidance">www.hhs.gov/guidance</a> to remain active, but the additional requirements
imposed by the GGP rule (e.g., that removal from the repository would
affect rescission of a guidance) would be removed. We propose the
automatic rescission requirement will have no effect on the status of
guidance documents regardless of when they were issued. If the HHS GGP
final rule is repealed as proposed, guidance documents will remain
validly issued regardless of whether they were ever inadvertently not
included in the repository. HHS will seek to ensure the repository is
as complete and up to date as possible.
Unnecessary Diversion of Resources. Other aspects of the HHS GGP
final rule also raise concerns because they divert agency resources
without providing adequate compensating benefit, or are simply
unnecessary. Although the Department previously believed that the
petition process would not unduly strain HHS resources and delay the
issuance of new guidance documents, 85 FR 78783, we now have serious
policy reservations about this allocation of resources. The Department
has now determined that the petition process concerning the withdrawal
or modification of guidance documents, established in Sec. 1.5--which
requires written responses from the Department on a short timeframe
regardless of the petition's subject matter or merits or of competing
public health priorities--is unnecessary and burdensome. This process
allows a petitioner to petition for hundreds of guidance documents to
be rescinded at once or allows one or many petitioners to re-petition
regarding a single guidance document multiple times. Further, many
agencies have well-established petition processes that are already in
use by stakeholders seeking changes to or rescission of existing
guidance, and there are equally well-established processes for
stakeholders wishing to challenge agency decisions (including those
involving applicability of a guidance) that are unique to the agency
and the communities with whom the agency works. These processes include
citizen petitions related to FDA guidance and the appeals process at 42
CFR part 498 for facilities that disagree with decisions involving
application of guidance governing Medicare eligibility and
participation. Further, many stakeholders are in regular communication
with agencies and express their comments, suggestions, or concerns with
guidance in their formal and informal discussions with agency
employees. It is not necessary, in the Department's view, to require an
expedited response to all guidance-related concerns, some of which may
warrant extensive review and consideration.
The GGP rule also contains generalized statements related to the
role and effect of guidance that are not necessary and could cause
confusion. For example, Sec. 1.3(a)(1) states, ``[u]nder the
Administrative Procedure Act, the Department may not issue any guidance
document that establishes a legal obligation that is not reflected in a
duly enacted statute or in a regulation lawfully promulgated under a
statute.'' To the extent that provisions such as this one seek to
capture a current understanding of principles established by the APA,
the Department has reconsidered that effort and now sees little benefit
in it. It is unnecessary because the APA governs agency conduct
concerning guidance without the need for agency regulations.
If HHS were to finalize this proposed rule to repeal the HHS GGP
final rule, appropriate parameters and procedures for guidance
documents issued by HHS agencies would remain in place. Repealing the
HHS GGP final rule would not change the existing state of the law on
the non-binding effect of guidance documents or whether they lack the
force and effect of law. Nor would such repeal permit an agency to use
guidance documents to establish or change policies where rulemaking is
otherwise required, or to require outside parties to take or refrain
from taking certain actions that are not addressed by statute or
regulation. See generally Azar v. Allina Health Servs., 139 S. Ct. 1804
(2019) (finding that Medicare-related guidance cannot create additional
burdens beyond those included in statute or regulation). The Department
would retain appropriate internal procedures for approval of the
issuance of guidance documents and would continue to make guidance
documents available to the public. Further, OIRA would continue to
review guidance documents in appropriate circumstances, as it did
before the issuance of E.O. 13891. Stakeholders could still petition
the Department to take certain actions related to guidance documents
under their general rights to communicate with and to seek redress from
the Federal Government. In summary, the Department no longer believes
that the provisions of the HHS GGP final rule are warranted.
2. Conflict With FDA Good Guidance Practices
The HHS GGP final rule also presents implementation problems for
FDA. If HHS were not already proposing to repeal the rule in its
entirety, HHS would have proposed to amend 45 CFR part 1 to remove FDA
from the scope of that regulation. Indeed, it is also possible that, if
the exclusion of FDA from 45 CFR part 1 can proceed separately on a
faster track, the Department may choose to finalize that part of the
repeal in advance of finalizing other aspects of this rulemaking.
As noted, FDA, unlike the other divisions of HHS, has long operated
under a statutory provision concerning guidance and has its own GGP
regulations, which address FDA's practices related to guidance
documents, including practices and procedures for issuing, revising,
and implementing guidance documents. FDA adopted its GGP regulations
over 20 years ago at the conclusion of a public process that began in
the 1990s. In May 1995, the Indiana Medical
[[Page 58050]]
Device Manufacturers Council submitted a citizen petition to FDA
requesting, among other things, that FDA establish greater controls
over the initiation, development, and issuance of guidance documents to
ensure the appropriate level of meaningful public participation. In
response to this petition, and after an opportunity for public comment,
in February 1997, FDA published a guidance document on GGPs. 62 FR 8961
(Feb. 27, 1997). On November 21, 1997, the President signed into law
the Food and Drug Administration Modernization Act of 1997 (FDAMA)
(Pub. L. 105-115). Section 405 of FDAMA added section 701(h) to the
FD&C Act, which codified certain parts of the 1997 FDA GGP guidance
document. In response to FDAMA, FDA issued a proposed rule on February
14, 2000, 65 FR 7321, to amend its administrative regulations to codify
its policies and procedures for developing, issuing, and using guidance
documents, including those set forth in section 701(h) of the FD&C Act.
FDA issued a final rule establishing the GGP regulation on September
19, 2000. 65 FR 56468.
FDA currently issues its guidance documents consistent with section
701(h) of the FD&C Act (21 U.S.C. 371(h)) and 21 CFR 10.115, which
include procedures for the following:
<bullet> Public participation in the development of guidance
documents, including to propose topics for guidance, submit drafts of
proposed guidance for consideration, comment on most guidance documents
before implementation, and comment on revising or rescinding any
guidance documents at any time after issuance;
<bullet> For most guidance documents, publication of a notice in
the Federal Register announcing the guidance document's availability;
<bullet> Public availability of guidance documents, both on
<a href="http://FDA.gov">FDA.gov</a>, and, upon request, in hard copy;
<bullet> Standard elements of guidance documents, including
elements to make clear the non-binding effect of guidance documents, to
identify the Center or Office issuing the guidance, and to identify the
activities to which the guidance applies;
<bullet> Approval of guidance documents; and,
<bullet> An appeals process if FDA does not follow its GGP
regulation or if an FDA employee treats a guidance document as binding.
FDA also operates under longstanding regulations regarding citizen
petitions. See 21 CFR 10.30, 10.31. For years, stakeholders have
submitted petitions under FDA's regulations that suggest that the
agency take certain actions on guidance documents, particularly to
amend guidance.
The Department is concerned that the HHS GGP final rule establishes
standards and processes that overlap with but are distinct from those
in section 701(h) of the FD&C Act, FDA's GGP regulation, and/or FDA's
regulation governing citizen petitions. For example, section 701(h) of
the FD&C Act and 45 CFR 1.3(b)(4) contain different standards for
dispensing with prior public participation for certain guidance
documents. Having two sets of regulations governing FDA guidance
practices, as well as two sets of regulations governing citizen
petitions related to FDA guidance documents, creates practical
difficulties and confusion. For these reasons as well as the general
concerns with the GGP rule discussed in this document, the Department
no longer believes that this regulatory overlay on the FDA guidance
processes adds value.
In addition, the application of the HHS GGP final rule to FDA
guidance presents problems that were not considered or addressed at the
time the Department made the decision to extend the rule to apply to
FDA. For guidance documents erroneously rescinded based on their
absence from the repository, the Department believed that rescission
could be remedied simply through issuing the guidance consistent with
``the procedures in [the HHS] rule.'' 85 FR 78781. However, FDA has its
own statutory mandate and regulations requiring promulgation of
guidance through a notice and comment process in most cases. Therefore,
if a guidance document is erroneously rescinded under Sec. 1.4(a)(2)
of the HHS GGP final rule, FDA would need to consider how to
repromulgate its guidance in a manner consistent not only with the HHS
GGP final rule, but also with its own statute and regulations.
Repealing the HHS GGP final rule--and in particular, removing FDA from
the scope of 45 CFR part 1--is important to stabilize and clarify the
regulatory regime for FDA guidance documents, including the process for
submitting citizen petitions related to FDA guidance documents. As
discussed in this section, the Department now believes that any
procedures going beyond those set forth in FDA's current regulations--
such as those for significant guidance documents--are unwarranted for
FDA guidance. In addition, it is inefficient and confusing for
regulated entities as well as FDA staff to toggle back-and-forth
between HHS and FDA GGP rules to try to figure out what the
requirements are.\5\
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\5\ The FDA GGP rule is an example of an agency developing
procedures uniquely suited to its mission and statutory authorities.
Trying to impose processes that were tailored to FDA upon all other
agencies within the Department, or trying to force FDA to conform to
a process for the entire Department, would create additional burdens
and confusion.
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B. Civil Enforcement Rule (45 CFR 1.1-1.2, 1.6-1.9)
The Department is proposing to repeal the Civil Enforcement rule
because the rule: (1) Creates unnecessary hurdles and roadblocks in
agency actions, likely to the detriment of the public; (2) conflicts
with and undermines current agency processes; and (3) diverts critical
Department resources.
Creates Unnecessary Hurdles. The processes and procedures set forth
in the Civil Enforcement rule create unnecessary hurdles and roadblocks
for agency actions, to the detriment of the public health and other
national priorities. Section 1.9 requires the Department to follow
certain steps before taking civil enforcement actions, including
providing parties with an initial notice of the agency's legal and
factual determinations, an opportunity to object or respond, and the
Department's ``written response'' to the affected party's objections.
The Department previously anticipated that existing HHS procedures
already satisfied the requirements established in Sec. 1.9. 86 FR
3012. Upon reconsideration, as a matter of policy, the Department now
finds that the Civil Enforcement rule creates a rigid, burdensome, and
resource-intensive path for Department staff, which is unnecessary when
other tools in use, such as information negotiation, could be more
efficient and effective.
Section 1.7(a) prohibits the Department from applying ``standards
or practices'' in a civil enforcement action that have not been
``publicly stated.'' That new restriction on the Department's authority
is inconsistent with settled case law,\6\ and it could interfere with
the Department's ability to enforce new laws and address
[[Page 58051]]
emerging threats, particularly through the use of adjudicatory
proceedings.
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\6\ See SEC v. Chenery Corp., 332 U.S. 194, 203 (1947)
(``[P]roblems may arise in a case which the administrative agency
could not reasonably foresee. . . . Hence, we refuse to say that the
Commission, which had not previously been confronted with the
problem of management trading during reorganization, was forbidden
from utilizing this [adjudicatory] proceeding for announcing and
applying a new standard of conduct''); Martin v. Occupational Safety
& Health Rev. Comm'n, 499 U.S. 144, 154 (1991) (``Within traditional
agencies . . . adjudication operates as an appropriate mechanism not
only for factfinding, but also for the exercise of delegated
lawmaking powers, including lawmaking by interpretation.'').
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Overall, through provisions such as these, the rule could impede
and delay civil enforcement actions, as well as depress the overall
number of actions, given finite Departmental resources. Slower and
fewer enforcement actions could not only leave more bad actors in the
market, but could embolden them, ultimately undermining the public
interest.
Although Sec. 1.9 includes an exception for actions involving ``a
serious threat to health, safety, or similar emergency,'' 86 FR 3013,
the discretionary exception does not address fraudulent actors who
drain the Department's resources when allowed to remain in Departmental
programs. For example, it is not in the public interest for an HHS
agency such as CMS to take fewer enforcement actions against providers
and suppliers who fraudulently bill patients and harm the Medicare
trust funds. Delayed action against fraudulent billing would allow
further diversion of taxpayer dollars and loss of program funding,
forcing divisions to reprioritize program resources. Additionally, the
exception does not alleviate the burden on the Department, because the
process, including the Department's written response to the party's
objections, must still be followed ``as soon as practicable.'' 86 FR
3013. Finally, analyzing whether a particular action falls into the
exceptions set forth in Sec. 1.9(c) would itself require an
expenditure of time and resources that could delay actions needed to be
taken on a time-sensitive basis.
Conflict with Existing Processes. Although the Department
previously concluded that the requirements set forth in the final rule
would facilitate smoother operations, 86 FR 3013, upon reconsideration,
the Department is now concerned that the requirements in Sec. Sec. 1.6
through 1.9 may create conflict and cause confusion to Department staff
and the public with respect to existing agency processes and
regulations. The various agencies under the HHS umbrella each have
procedural regulations, some of which have been specifically designed
to govern a particular type of proceeding. See, e.g., 21 CFR part 17
(procedures governing hearings concerning the imposition of civil money
penalties by FDA); 42 CFR part 488 (CMS and State Agency survey,
certification, and enforcement procedures for Medicare providers and
suppliers); 42 CFR part 498 (Appeals procedures for determinations that
affect participation in the Medicare Program); 45 CFR part 160, subpart
E (Procedures governing hearings challenging the imposition of civil
monetary penalties in HIPAA cases). The procedures required under the
Civil Enforcement rule do not adequately account for these pre-
existing, agency-specific procedures, nor do they account for the
differences between agencies within the Department. Instead, the Civil
Enforcement rule dictates an overlay of new, and in some cases
redundant, requirements. These requirements may conflict with or
diverge from the existing procedures established to provide parties
notice and an opportunity to be heard. This overlay creates confusion
for both HHS agencies and regulated parties and could delay or prevent
civil enforcement.\7\
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\7\ Further, we note that if the GGP rule is not repealed as
part of this rulemaking, the limitations on use of guidance
documents in 45 CFR 1.6(b), which were added as part of the Civil
Enforcement rulemaking, may raise additional questions regarding the
appropriate scope and use of guidance documents--especially in light
of potentially conflicting directives in the HHS GGP final rule.
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The procedural regulations already established within HHS comply
with principles of due notice, fairness, and transparency. Parties that
are subject to civil administrative enforcement actions and
adjudications under the existing procedures established prior to the
Civil Enforcement rule are routinely provided with sufficient notice of
the action, adequately informed of laws and regulations to which they
are subject to, fully instructed on contesting or appealing agency
determinations prior to actions of legal consequence, and protected
from unfair surprise. The Civil Enforcement rule did not provide any
evidence to the contrary. Thus, overall, the Department has not
identified grounds to justify the expenditure of resources on
compliance with the rule, particularly given that such expenditure
would divert resources from other important Department activities, as
explained in the next subsection.
Diverts Resources. Further, the Civil Enforcement rule could
require the expenditure of significant resources to respond to spurious
challenges to valid enforcement actions and adjudications. The rule is
likely to invite opportunistic litigation not only because parties will
have new procedural grounds to object to agency actions, but also
because many of the provisions in Sec. 1.9 are opaque and susceptible
to multiple interpretations. The additional time and resources that
would be needed to address and defend against such challenges would
significantly impede the Department's ability to take enforcement
actions and would divert resources from mission-critical activities.
In summary, the Civil Enforcement rule deprives the Department and
its agencies of necessary flexibility in determining when and how best
to conduct civil administrative enforcement actions and adjudications
based on particular facts and circumstances. The Civil Enforcement rule
also unduly restricts the Department's ability to take timely action to
enhance the health and well-being of all Americans.
C. Reliance Interests
In issuing this proposed rule, the Department has considered
reliance interests that may have accrued in connection with 45 CFR part
1. As an initial matter, the Department doubts that any serious
reliance interests have accrued. Both the HHS GGP and Civil Enforcement
final rules became effective only a couple of weeks before the change
in Administration and before the E.O.s on which they relied were
revoked. They have been in place for only a few months, most of which
time followed that revocation. It is unlikely that serious reliance has
developed in that short amount of time. Cf. Clark-Cowlitz Joint
Operating Agency v. FERC, 826 F.2d 1074, 1084 (D.C. Cir. 1987) (finding
limited reliance interest where rule was in place for only six months,
among other things). Under these circumstances, it is likely that
regulated entities would have anticipated that the rules would be
reconsidered and potentially rescinded, particularly after the
revocation of E.O.s 13891 and 13892 on January 20, 2021. Indeed, other
departments and agencies have already repealed rules issued pursuant to
those E.O.s.\8\
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\8\ As of May 28, 2021, over 10 other departments and agencies
have repealed such rules. See Tennessee Valley Authority Final Rule,
```Promoting the Rule of Law Through Improved Agency Guidance'
Regulations; Rescission,'' 86 FR 28488 (May 27, 2021) (rescinding
rule on guidance); Environmental Protection Agency Final Rule, ``EPA
Guidance; Administrative Procedures for Issuance and Public
Petitions; Rescission,'' 86 FR 26842 (May 18, 2021) (rescinding rule
on guidance); National Endowment for the Humanities and National
Foundation on the Arts and the Humanities Final Rule, ``Processes
and Procedures for Issuing Guidance Documents,'' 86 FR 26184 (May
13, 2021) (rescinding rule on guidance); U.S. Office of Government
Ethics Final Rule, ``Removal of U.S. Office of Government Ethics
Guidance Documents Regulations'' 86 FR 25801 (May 11, 2021)
(rescinding rule on guidance); Railroad Retirement Board Final Rule,
86 FR 22866 (Apr. 30, 2021) (rescinding rule on guidance); Social
Security Administration Final Rule, ``Rescission of Rules on
Improved Agency Guidance Documents'' 86 FR 20631 (Apr. 21, 2021)
(rescinding regulations on guidance); Department of Interior Final
Rule, ``Procedures for Issuing Guidance Documents,'' 86 FR 19786
(Apr. 15, 2021) (rescinding regulations on issuing guidance);
Council on Environmental Quality Final Rule, ``Guidance Document
Procedures Rescission,'' 86 FR 19149 (Apr. 13, 2021) (rescinding
regulations on issuing guidance); U.S. Agency for International
Development (USAID) Final Rule, ``Procedures for the Review and
Clearance of USAID's Guidance Documents; Rescission'' 86 FR 18444
(Apr. 9, 2021) (rescinding regulations on issuing guidance);
Department of Transportation Final Rule, ``Administrative
Rulemaking, Guidance, and Enforcement Procedures,'' 86 FR 17292
(Apr. 2, 2021) (removing regulations regarding issuing guidance and
conducting enforcement actions, among other things); Pension Benefit
Guaranty Corporation Final Rule, ``Rescission of Pension Benefit
Guaranty Corporation Rule on Guidance,'' 86 FR 17066 (Apr. 1, 2021)
(rescinding rule on issuing guidance); Department of Energy Notice
of Proposed Rulemaking, ``Procedures for the Issuance of Guidance
Documents,'' 86 FR 16114 (Mar. 26, 2021) (proposing to rescind final
rule on issuing guidance); Department of Energy Final Rule,
``Procedures for the Issuance of Guidance Documents,'' 86 FR 14807
(Mar. 19, 2021) (further delaying effective date of final rule on
issuing guidance in order to conduct rulemaking to withdraw the
rule); Department of Labor Final Rule, ``Rescission of Department of
Labor Rule on Guidance,'' 86 FR 7237 (Jan. 27, 2021) (rescinding
rule on issuing guidance).
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[[Page 58052]]
Moreover, particularly given the timing of the issuance of these
rules, it is difficult to see how the procedures or principles set
forth in these rules would translate to a stakeholder making concrete
changes in public or business decisions or practices that would
implicate serious reliance interests. As explained in this document,
consistent with the largely procedural nature of the rules, the rules
codify steps that the agency would take in certain circumstances, such
as when issuing guidance or prior to civil administrative enforcement
actions, but they do not on their own change the substantive
requirements governing regulated entities or related property
interests. Finally, the Department considers the policies reflected in
this proposed rule to advance the public interest. To the extent that
any serious reliance interests are at stake, the Department believes
that the public interests in efficient issuance of guidance and
adequate civil administrative enforcement actions outweigh any such
individual reliance interests. However, we invite parties to use the
comment period for this proposed rule to explain why they believe they
would be adversely affected by this proposed policy change and explain
how they would need to adjust their practices, as appropriate.
V. Required Regulatory Analyses
A. Executive Orders 12866 and 13563
E.O. 12866, ``Regulatory Planning and Review,'' and E.O. 13563,
``Improving Regulation and Regulatory Review,'' direct agencies to
assess all costs and benefits of available regulatory alternatives and,
if the regulation is necessary, to select regulatory approaches that
maximize net benefits.
In both the HHS GGP proposed and final rules, OMB determined that
the rulemaking was not an economically significant regulatory action
under these E.O.s. 85 FR 51399; 85 FR 78784. OMB made a similar finding
with respect to the Civil Enforcement rule. 86 FR 3013. The preambles
to these rules maintained that the rules primarily described procedural
changes that would require Department expenditures to implement.
Although the preambles theorized that stakeholders might eventually
benefit from greater transparencies and efficiencies from these
procedural changes, the rules did not identify any benefits that were
likely to be immediately realized. See 85 FR 78784; 86 FR 3013.
In the current rulemaking, the Department is proposing to repeal
two recent final rules, effective on January 6, 2021, and January 12,
2021, which would remove all of 45 CFR part 1. If finalized, this
rulemaking would restore the status quo that existed just prior to the
January 2021 effective dates. The Department may then take further
action as needed to undo any minimal actions taken since those
effective dates to implement the rules' procedural directives.
Consistent with the conclusions reached in the preambles of the HHS GGP
final rule and Civil Enforcement rule, and for the additional reasons
described in this section, OMB finds that this rulemaking is a
significant regulatory action under E.O.s 12866 and 13453. The Office
of Management and Budget (OMB) has reviewed this rule as consistent
with E.O. 12866 and 13453.
B. Regulatory Flexibility Act
The Department has examined the economic implications of this
proposed rule as required by the Regulatory Flexibility Act (RFA), 5
U.S.C. 601 et seq. The RFA requires an agency to describe the impact of
a proposed rulemaking on small entities by providing an initial
regulatory flexibility analysis, unless the agency determines that the
proposed rule will not have a significant economic impact on a
substantial number of small entities, provides a factual basis for this
determination, and proposes to certify the statement. 5 U.S.C. 603(a)
and 605(b). The Department considers a proposed or final rule to have a
significant economic impact on a substantial number of small entities
if it has at least a three percent impact on revenue of at least five
percent of small entities. The Department anticipates that, if
finalized, this rule would restore the status quo just prior to the
respective January 6, 2021, and January 12, 2021, effective dates of
the HHS GGP final rule and the Civil Enforcement rule, and undo
changes, if any, to procedures followed by the Department during the
interim period. This proposed rule would repeal two rules that the
Department concluded, and the Secretary certified, would not result in
a significant impact on a substantial number of small entities.
Further, the Department believes that any effects associated with
future regulatory actions, including any positive or negative impacts
to small entities, should be attributable to those regulatory actions
rather than to this proposed rule, if it is finalized as proposed. As a
result, the Department has determined, and the Secretary certifies,
that this proposed rule would not have a significant economic impact on
the operations of a substantial number of small entities.
C. Executive Order 13132 (Federalism)
E.O. 13132, ``Federalism,'' establishes certain requirements that
an agency must meet when it promulgates a rule that imposes substantial
direct requirement costs on State and local governments or has
Federalism implications. The Department has determined that this
proposed rule would not impose such costs or have any Federalism
implications.
D. Executive Order 13175 (Consultation and Coordination With Indian
Tribal Governments)
HHS has analyzed this proposed rule in accordance with the
principles set forth in 13175. HHS has tentatively determined that the
proposed rule does not contain policies that would have a substantial
direct effect on one or more Indian Tribes, on the relationship between
the Federal Government and Indian Tribes, or on the distribution of
power and responsibilities between the Federal Government and Indian
Tribes. In accordance with the Department's Tribal consultation policy,
the Department solicits comments from tribal officials on any potential
impact on Indian Tribes from this proposed action.
E. National Environmental Policy Act
HHS had determined that this proposed rule would not have a
significant impact on the environment.
F. Paperwork Reduction Act of 1995
In accordance with the Paperwork Reduction Act of 1995 and its
implementing regulations, 44 U.S.C. 3501-3521; 5 CFR part 1320,
appendix
[[Page 58053]]
A.1, the Department has reviewed this proposed rule and has determined
that it proposes no new collections of information.
List of Subjects in 45 CFR Part 1
Government employees, Guidance, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, and under the authority
of 5 U.S.C. 301, the Department of Health and Human Services proposes
to amend 45 CFR, subtitle A, subchapter A, by removing part 1.
PART 1--[REMOVED AND RESERVED]
0
1. Remove and reserve part 1.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-22503 Filed 10-19-21; 8:45 am]
BILLING CODE 4150-26-P
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