Rule2022-04524
Securing Updated and Necessary Statutory Evaluations Timely; Administrative Delay of Effective Date
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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
March 4, 2022
Effective
September 22, 2022
Issuing agencies
Health and Human Services DepartmentFood and Drug AdministrationPublic Health ServiceCenters for Medicare & Medicaid ServicesChildren and Families Administration
Abstract
The Department of Health and Human Services (HHS or Department) is postponing, pending judicial review, the effective date of a final rule entitled "Securing Updated and Necessary Statutory Evaluations Timely" (SUNSET final rule) and published in the Federal Register of January 19, 2021, and a final rule correction published in the Federal Register of March 23, 2021.
Full Text
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<title>Federal Register, Volume 87 Issue 43 (Friday, March 4, 2022)</title>
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[Federal Register Volume 87, Number 43 (Friday, March 4, 2022)]
[Rules and Regulations]
[Pages 12399-12401]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-04524]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 6
Public Health Service
42 CFR Part 1
Centers for Medicare and Medicaid Services
42 CFR Part 404
Office of the Inspector General
42 CFR Part 1000
Office of the Secretary
45 CFR Part 8
Administration for Children and Families
45 CFR Parts 200, 300, 403, 1010, and 1300
[Docket No. HHS-OS-2020-0012]
RIN 0991-AC24
Securing Updated and Necessary Statutory Evaluations Timely;
Administrative Delay of Effective Date
AGENCY: Department of Health and Human Services (HHS).
ACTION: Final rule; delay of effective date.
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SUMMARY: The Department of Health and Human Services (HHS or
Department) is postponing, pending judicial review, the effective date
of a final rule entitled ``Securing Updated and Necessary Statutory
Evaluations Timely'' (SUNSET final rule) and published in the Federal
Register of January 19, 2021, and a final rule correction published in
the Federal Register of March 23, 2021.
DATES: As of March 4, 2022, the effective date of the SUNSET final rule
published January 19, 2021 (86 FR 5694), which was delayed until March
22, 2022, by an order that took effect as of March 19, 2021 (86 FR
15404, March 23, 2021), is further delayed pursuant to 5 U.S.C. 705 for
six months until September 22, 2022.
As of March 4, 2022, the effective date of the correction published
March 23, 2021 (86 FR 15404), is delayed until September 22, 2022.
FOR FURTHER INFORMATION CONTACT: Daniel J. Barry, Acting General
Counsel, 200 Independence Avenue SW, Washington, DC 20201; or by email
at <a href="/cdn-cgi/l/email-protection#5e2c3b28373b29302e2c331e36362d70393128"><span class="__cf_email__" data-cfemail="2d5f485b44485a435d5f406d45455e034a425b">[email protected]</span></a>; or by telephone at 1-877-696-6775.
SUPPLEMENTARY INFORMATION:
I. Overview
The SUNSET final rule, if implemented, would establish a new
process for regulatory review of HHS regulations, which includes the
automatic expiration of regulations under certain circumstances. It was
scheduled to take effect on March 22, 2021. After a lawsuit was filed
on March 9, 2021, seeking to overturn the SUNSET final rule, HHS issued
an Administrative Delay of Effective Date (First Administrative Delay),
which took effect as of March 19, 2021, which postponed the effective
date of the SUNSET final rule, pending judicial review, until March 22,
2022. 86 FR 15404 (Mar. 23, 2021).
After conducting a thorough review of the SUNSET final rule
including the oral and written comments on its proposal and the
allegations in the lawsuit, HHS published a notice of proposed
rulemaking to withdraw or repeal the SUNSET final rule (Withdrawal
NPRM). 86 FR 59906 (Oct. 29, 2021). The comment period on the
Withdrawal NPRM closed on December 28, 2021. HHS received approximately
80 comments. Some comments were submitted by Plaintiffs in the lawsuit
seeking to overturn the SUNSET final rule, and their comments
incorporated by reference the Complaint they had filed.
HHS is currently in the process of reviewing the comments and
developing a final rule. For the reasons described below, HHS finds
that the interests of justice require that the SUNSET final rule's
effective date be postponed pending judicial review because: (1) A
postponement will permit HHS to continue and complete its review of the
SUNSET final rule in light of the claims raised in the litigation; (2)
the resolution of the rulemaking will inform the government's position
in this lawsuit; and (3) based on HHS's review of the Complaint, HHS
believes that the Court may find that: (a) Some of Plaintiffs' claims
have merit; (b) Plaintiffs' allegations of harm are credible; and (c)
the balance of equities and the public interest warrant postponement of
the effective date to preserve the status quo while the Court considers
the challenge to the SUNSET final rule.
II. Background
A. The SUNSET Proposed and Final Rules
On November 4, 2020, HHS published a notice of proposed rulemaking
entitled ``Securing Updated and Necessary Statutory Evaluations
Timely'' (SUNSET proposed rule). 85 FR 70096. The SUNSET proposed rule
provided that comments could be submitted until December 4, 2020,
except for comments on the portion of the rule amending 42 CFR parts
400-429 and parts 475-499, which were due by January 4, 2021. HHS
received 532 comments total throughout the 60-day comment period, and
the commenters ``generally opposed the proposed rule, although some
commenters supported it.'' 86 FR 5704.
HHS also held a public hearing on November 23, 2020, to receive
information and views on the proposed rule (Public Hearing). Over
twenty interested parties provided oral comments at the Public Hearing.
See Transcript, Public Hearing on the
[[Page 12400]]
Securing Updated and Necessary Statutory Evaluations Timely Notice of
Proposed Rulemaking (Nov. 23, 2020) (available at <a href="https://www.regulations.gov/document/HHSOS-2020-0012-0501">https://www.regulations.gov/document/HHSOS-2020-0012-0501</a>) (Public Hearing
Transcript).
HHS issued the SUNSET final rule on January 19, 2021. 86 FR 5694.
The substance of the SUNSET proposed and final rules are more fully
described in the First Administrative Delay, and that description is
adopted by reference into this preamble. See 86 FR 15405.
B. The Santa Clara Complaint
On March 9, 2021, the County of Santa Clara, California Tribal
Families Coalition, National Association of Pediatric Nurse
Practitioners, American Lung Association, Center for Science in the
Public Interest, and Natural Resources Defense Council sued the
Department seeking to overturn the SUNSET final rule under the
Administrative Procedure Act (APA). Complaint, County of Santa Clara v.
HHS, Case No. 5:21-cv-01655-BLF (N.D. Cal.). The substance of the
Complaint is more fully described in the First Administrative Delay,
and that description is adopted by reference into this preamble. See 86
FR 15405.
C. The Administrative Delay of Effective Date and Stay of Litigation.
On March 9, 2021, HHS issued the First Administrative Delay, which
took effect as of March 19, 2021, which postponed the effective date of
the SUNSET final rule, pending judicial review, until March 22, 2022.
HHS explained that it believed that the Court may find: (a) That some
of Plaintiffs' claims have merit; (b) that Plaintiffs' allegations of
harm are credible; and (c) that the balance of equities and the public
interest warrant postponement of the effective date pending judicial
review. Accordingly, the Department found that the interests of justice
required a postponement in order to preserve the status quo, because,
if the rule took effect while HHS was evaluating the rule in light of
the claims raised in litigation, it could create significant
obligations for HHS, cause confusion for the public, including
Plaintiffs, and may lead to compliance costs as entities, including
Plaintiffs, plan steps necessary to deal with the rule's
implementation. HHS also observed that it was unaware of any benefits
from the implementation of the SUNSET final rule that would be
significantly curtailed from a stay of its effective date. See 86 FR
15404-08.
With respect to the Santa Clara litigation, the parties requested
that the court stay the case on the ground that HHS was reviewing the
SUNSET final rule in light of Plaintiffs' claims raised in this
litigation and needed additional time to evaluate the claims and its
position before taking further steps in the litigation. The court
granted the stay. Order, County of Santa Clara v. HHS, Case No. 5:21-
cv-01655-BLF (N.D. Cal.) (Apr. 22, 2021). Since that time, the parties
have periodically submitted joint status reports to the court and
requested that the litigation stay be extended, and those requests have
thus far, as of February 1, 2022, been granted.
D. The Withdrawal NPRM
HHS published the Withdrawal NPRM on October 29, 2021, in which it
proposed to withdraw or repeal the SUNSET final rule in its entirety.
86 FR 59906. In the Withdrawal NPRM, the Department explained that, in
issuing the SUNSET rule, it should have engaged in a more robust
consideration of the comments and should have given greater weight to
the potential harms to stakeholders and the public health. Therefore,
before issuing the Withdrawal NPRM, the Department reexamined the
SUNSET final rule in light of the allegations in the Santa Clara
complaint, the many comments submitted to the SUNSET proposed rule
docket and raised at the Public Hearing, and the current
Administration's policies. That review considered the processes
followed in issuing the SUNSET final rule, its policy goals and
objectives, the projected effects and analysis of impacts in its
implementation, and the legal evaluation of and support for its
provisions, including whether the rule is consistent with all HHS
statutory obligations and its mission to promote and protect the public
health.
The comment period on the Withdrawal NPRM closed on December 28,
2021, and HHS received approximately 80 comments. HHS is actively
engaged in considering the comments and developing a final rule.
III. Discussion
Under 5 U.S.C. 705 of the APA, an agency ``may postpone the
effective date of action taken by it, pending judicial review,'' when
the ``agency finds that justice so requires.'' On March 9, 2021, HHS
issued the First Administrative Delay after concluding that the
interests of justice required that the SUNSET final rule be stayed
pending judicial review. For the reasons described in the First
Administrative Delay and as further discussed in this document, the
Department has concluded that the considerations supporting the First
Administrative Delay remain true today, and the interests of justice
require that the effective date of the SUNSET final rule should be
further stayed until September 22, 2022.
In the First Administrative Delay, the Department explained that it
was taking a fresh and critical look at the SUNSET final rule in light
of the allegations in the Complaint. The Complaint alleged serious
legal vulnerabilities of the rule, and, while HHS did not concede any
of these claims at that time, HHS required additional time to complete
its evaluation of the SUNSET final rule given the pending litigation.
In addition, the Complaint raised the question as to whether the SUNSET
final rule, issued in the final days of the last Administration, is
consistent with the policies and goals of the current Administration,
both in terms of the appropriate role of regulatory oversight of the
health care industry and necessary engagement with the public,
including tribal organizations.
After further review of the SUNSET final rule, the allegations in
the Complaint, and the comments on the SUNSET proposed rule, we issued
the Withdrawal NPRM in October 2021, in which we discussed our
tentative conclusions for further public comment. Our discussion
included concerns regarding the procedural shortcomings of the SUNSET
rulemaking process, the fundamental errors in its Regulatory Impact
Analysis, and the attendant legal vulnerabilities of the SUNSET final
rule. Our reanalysis of the regulatory impact of this rule, as set
forth in the Withdrawal NPRM, has underscored our belief that the Santa
Clara court could find merit in at least some of Plaintiffs' claims.
Our review of the approximately 80 comments submitted on the
Withdrawal NPRM is ongoing. A few substantive comments support the
SUNSET final rule while many other substantive comments favor
withdrawal or repeal. As noted, Plaintiffs in the Santa Clara
litigation submitted comments on the Withdrawal NPRM that attached
copies of the Complaint. Accordingly, HHS's consideration of the
Complaint's critique of the SUNSET final rule are part of its ongoing
review.
The Complaint also alleges that Plaintiffs and others would be
immediately harmed by the SUNSET final rule, if implemented. The
Complaint alleges that the uncertainty resulting from its
implementation impacts the entire healthcare sector, which accounts for
nearly one-fifth of the U.S. economy and secures individual and
community health for
[[Page 12401]]
hundreds of millions of Americans, and that participants in every
single industry the Department regulates, including Plaintiffs, must
plan their futures and operations without knowing what regulations will
govern their businesses in these notoriously complex regulatory arenas.
See Complaint, ]] 2, 95-122. While HHS does not concede that Plaintiffs
would establish irreparable harm in litigation, HHS agrees that it is
appropriate to postpone the effective date of the SUNSET final rule to
preserve the status quo and to ensure that HHS has time to evaluate the
rule before it takes effect to avoid the possibility of confusion among
the regulated community. All of these potential consequences would be
detrimental to the public health, underscoring that justice requires a
postponement of the SUNSET final rule's effective date pursuant to 5
U.S.C. 705.
We further conclude that extending the effective date of the SUNSET
final rule will create no countervailing harms because this delay
merely continues the status quo. And because implementation of the
regulatory review framework provided under the SUNSET final rule would
be a complex and lengthy process, any purported benefits from the
retirement of regulations under the new process would not accrue for
several years. Accordingly, given the public health concerns and the
harms from the implementation of the SUNSET final rule alleged by the
Plaintiffs and echoed in the comments to the SUNSET proposed rule and
the Withdrawal NPRM, and the dearth of countervailing harms from
extending the effective date, the balance of equities and the public
interest favor the extension of the stay of the effective date of the
SUNSET final rule to preserve the status quo and allow for judicial
review of its legality before any implementation.
Accordingly, HHS is issuing this further stay of the effective date
of this final rule pending judicial review. This postponement applies
to all of the regulations established under the SUNSET final rule. As
noted above, the Complaint alleges that the SUNSET final rule suffers
from a variety of defects, including procedural defects related to its
promulgation. The Department believes it is appropriate to review the
entire rule in light of the claims raised in the litigation, which it
continues to actively evaluate in conjunction with its consideration of
the comments to the Withdrawal NPRM and its efforts to develop a final
rule. Thus, this postponement reaches the full rule, consistent with
the Complaint's prayer for relief.
Xavier Becerra,
Secretary.
[FR Doc. 2022-04524 Filed 3-3-22; 8:45 am]
BILLING CODE 4150-26-P
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