Rule2022-11477
Withdrawing Rule on Securing Updated and Necessary Statutory Evaluations Timely
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Published
May 27, 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 issuing a final rule withdrawing a rule entitled "Securing Updated and Necessary Statutory Evaluations Timely" (SUNSET final rule), which published in the Federal Register of January 19, 2021. The SUNSET final rule was originally scheduled to take effect on March 22, 2021. However, after a lawsuit was filed on March 9, 2021, seeking to overturn the SUNSET final rule, HHS extended the effective date of the SUNSET final rule until September 22, 2022. HHS is now withdrawing the SUNSET final rule.
Full Text
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[Federal Register Volume 87, Number 103 (Friday, May 27, 2022)]
[Rules and Regulations]
[Pages 32246-32288]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-11477]
[[Page 32245]]
Vol. 87
Friday,
No. 103
May 27, 2022
Part II
Department of Health and Human Services
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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, et al.
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Withdrawing Rule on Securing Updated and Necessary Statutory
Evaluations Timely; Final Rule
Federal Register / Vol. 87 , No. 103 / Friday, May 27, 2022 / Rules
and Regulations
[[Page 32246]]
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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
Withdrawing Rule on Securing Updated and Necessary Statutory
Evaluations Timely
AGENCY: Department of Health and Human Services.
ACTION: Final rule; withdrawal.
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SUMMARY: The Department of Health and Human Services (HHS or
Department) is issuing a final rule withdrawing a rule entitled
``Securing Updated and Necessary Statutory Evaluations Timely'' (SUNSET
final rule), which published in the Federal Register of January 19,
2021. The SUNSET final rule was originally scheduled to take effect on
March 22, 2021. However, after a lawsuit was filed on March 9, 2021,
seeking to overturn the SUNSET final rule, HHS extended the effective
date of the SUNSET final rule until September 22, 2022. HHS is now
withdrawing the SUNSET final rule.
DATES: As of July 26, 2022, the final rule published on January 19,
2021 (86 FR 5694), which was delayed on March 23, 2021 (86 FR 15404),
and March 4, 2022 (87 FR 12399), is withdrawn.
ADDRESSES: For access to the docket to read background documents or
comments received, go to <a href="https://www.regulations.gov">https://www.regulations.gov</a> and insert the
docket number found in brackets in the heading of this final rule into
the ``Search'' box and follow the prompts.
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#6635130815031234031603070a260e0e1548010910"><span class="__cf_email__" data-cfemail="5e0d2b302d3b2a0c3b2e3b3f321e36362d70393128">[email protected]</span></a>; or by telephone at 1-877-696-6775.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Executive Summary
A. Purpose of the Final Withdrawal Rule
B. Summary of Major Provisions
C. Legal Authority
D. Costs and Benefits
II. Table of Abbreviations/Commonly Used Acronyms in This Document
III. Background
A. History of the SUNSET Rulemaking
B. The Department's Review
IV. Legal Authority
V. Analysis of and Responses to Public Comments on the Withdrawal
NPRM
A. Comments on Implementation Burdens on the Department and
Stakeholders
B. Comments on Potential Harms From the Possible and Actual
Expiration of Regulations
C. Comments on the Regulatory Flexibility Act and Retrospective
Review
D. Other Legal Comments
E. Comments on Vague and Confusing Provisions
VI. Final Regulatory Impact Analysis
A. Introduction, Summary, and Background
B. Market Failure or Social Purpose Requiring Federal Regulatory
Action
C. Purpose of the Final Withdrawal Rule
D. Baseline Conditions
E. Benefits of the Final Withdrawal Rule
F. Costs of the Final Withdrawal Rule
G. Analysis of Regulatory Alternatives to the Final Withdrawal
Rule
H. Final Small Entity Analysis
VII. Federalism
VIII. Consultation and Coordination With Indian Tribal Governments
IX. Analysis of Environmental Impact
X. Paperwork Reduction Act
XI. References
I. Executive Summary
A. Purpose of the Final Withdrawal Rule
HHS issued the SUNSET final rule on January 19, 2021. 86 FR 5694.
The SUNSET final rule provides, among other things, that all
regulations, subject to certain exceptions, issued by the Secretary of
the Department of Health and Human Services (Secretary) or his
delegates or sub-delegates shall expire at the end of (1) five calendar
years after the year that the SUNSET final rule first becomes
effective, (2) ten calendar years after the year of the regulation's
promulgation, or (3) ten calendar years after the last year in which
the Department ``Assessed'' and, if required, ``Reviewed'' the
regulation, whichever is latest.\1\ The SUNSET final rule was scheduled
to take effect on March 22, 2021. However, after a lawsuit seeking to
overturn the SUNSET final rule was filed on March 9, 2021, HHS issued
an Administrative Delay of Effective Date, effective as of March 19,
2021, which postponed the effective date of the SUNSET final rule,
pending judicial review, until March 22, 2022 (Administrative Delay).
86 FR 15404 (Mar. 23, 2021). HHS subsequently extended the effective
date of the SUNSET final rule until September 22, 2022. 87 FR 12399
(Mar. 4, 2022).
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\1\ The terms ``Section,'' ``Assess,'' and ``Review'' were
capitalized in the preamble to the SUNSET final rule where those
terms have the definitions ascribed to them in the text of that
final rule. For ease of readability, these terms are not capitalized
in the following discussion of this withdrawal final rule unless
directly quoting or paraphrasing the SUNSET final rule.
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The Department undertook to reexamine the SUNSET final rule in
light of the allegations in the lawsuit, the many substantive comments
submitted on the SUNSET proposed rule, and the different policy views
held by the Biden-Harris Administration as compared to the previous
administration which issued the SUNSET final rule. 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 HHS
statutory obligations and its mission to promote and protect the public
health. Based on that reevaluation, HHS published a notice of proposed
rulemaking to withdraw or repeal the SUNSET final rule (Withdrawal
NPRM). 86 FR 59906 (Oct. 29, 2021).
HHS has reviewed the comments on the Withdrawal NPRM and now issues
this final rule to withdraw the SUNSET final rule in its entirety.
B. Summary of Major Provisions
We are withdrawing the SUNSET final rule in its entirety.
C. Legal Authority
The primary statutory authorities supporting this rulemaking are
the general rulemaking authorities for the various substantive areas
under the Department's umbrella, as well as a general authorization for
agencies to issue regulations regarding the administrative processes to
be followed by that agency. These provisions include: 21 U.S.C. 371(a);
42 U.S.C. 216; 42 U.S.C. 1302; 42 U.S.C. 1395hh; 42 U.S.C. 2003; and 5
U.S.C. 301.
[[Page 32247]]
D. Costs and Benefits
This regulatory action will reduce the time spent by the Department
performing retrospective assessments and reviews of its regulations
that would have been required by the SUNSET final rule, and time spent
by regulated entities and other stakeholders, including the general
public, small and large businesses, non-governmental organizations,
Tribes and state and local governments, on comments related to these
assessments and reviews. The impact of the withdrawal is analyzed in
the final Regulatory Impact Analysis (RIA) for this final rule. See
Section VI below. In that section, we monetize the likely reductions in
time spent by the Department and the general public as cost savings.
Our primary estimate of these cost savings in 2020 dollars, annualized
over 10 years, using a 3% discount rate, totals $69.9 million. Using a
7% discount rate, we estimate $75.5 million in annualized cost savings.
Table 1 in Section VI reports these primary estimates alongside a range
of estimates that capture uncertainty in the amount of time it would
have taken the Department to perform each regulatory assessment and
review, and uncertainty in the amount of time the public would have
spent on comments.
II. Table of Abbreviations/Commonly Used Acronyms in This Document
As used in this preamble, the following terms and abbreviations
have the meanings noted below.
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Term Meaning
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ACA........................... Affordable Care Act.
ACF........................... Administration for Children and
Families.
AI/ANs........................ American Indian and Alaska Native
people.
AI............................ Artificial intelligence.
APA........................... Administrative Procedure Act.
CDC........................... Centers for Disease Control and
Prevention.
CFR........................... Code of Federal Regulations.
CHIP.......................... Children's Health Insurance Program.
CMS........................... Centers for Medicare & Medicaid
Services.
COVID-19...................... Coronavirus Disease 2019.
E.O........................... Executive Order.
FD&C Act...................... Federal Food, Drug, and Cosmetic Act.
FDA........................... Food and Drug Administration.
FSMA.......................... FDA Food Safety Modernization Act.
HHS or Department............. U.S. Department of Health and Human
Services.
IHS........................... Indian Health Service.
OCR........................... Office for Civil Rights.
OIRA.......................... Office of Information and Regulatory
Affairs.
PDV........................... Present Daily Value.
PHS Act....................... Public Health Service Act.
RFA........................... Regulatory Flexibility Act.
RIA........................... Regulatory Impact Analysis.
SAMHSA........................ Substance Abuse and Mental Health
Services Administration.
SBA........................... Small Business Administration.
SEISNOSE...................... Significant Economic Impact Upon a
Substantial Number of Small Entities.
SECG.......................... Small Entity Compliance Guide.
SSA........................... Social Security Act.
SUNSET........................ Securing Updated and Necessary Statutory
Evaluations Timely.
Unified Agenda................ Unified Agenda of Regulatory and
Deregulatory Actions.
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III. Background
The SUNSET final rule, if implemented, would have significantly
altered the operations of HHS with considerable negative repercussions
for a diverse array of stakeholders. We now conclude that these
significant repercussions were not adequately considered in issuing the
SUNSET final rule in part because the process to promulgate the rule
was extremely unusual, if not unprecedented. We note a few of the key
considerations here.
The SUNSET final rule is expansive in scope and impact, faced
considerable opposition from stakeholders (and very little support),
and lacked a public health or welfare rationale for expediting
rulemaking. In contrast to the Department's historical approach to
rulemaking in these circumstances, HHS completed the rulemaking--from
the publication of the proposal to publication of the final rule--in
less than three months. In issuing the Withdrawal NPRM, we explained
that, given the lack of a public health or welfare reason to expedite
the rulemaking and other procedural shortcomings, we were reconsidering
the commenters' significant objections to the SUNSET proposed rule. As
summarized and discussed in the Withdrawal NPRM, we found that those
comments raised compelling concerns that the SUNSET final rule would
harm the public health and welfare, but were given insufficient weight
in issuing the SUNSET final rule. Many of those same concerns have been
further confirmed in the comments on the Withdrawal NPRM.
We also conducted a reanalysis of the regulatory impact of the
SUNSET final rule, and found that the rule rested on flawed assumptions
and analysis.\2\ We now conclude that the SUNSET final rule likely
underestimated to a significant degree the resources needed for the
required undertaking. In particular, because the implementation of the
SUNSET final rule would have required a significant expenditure of
[[Page 32248]]
resources, the Department would have been forced to make resource
allocation decisions that would have impeded the Department's routine
operations and hampered its ability to carry out other key priorities
and goals.
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\2\ The initial draft of the RIA for the SUNSET final rule was
prepared by an outside economist. See 86 FR 5737 n. 210. As far as
the Department is currently aware, no Department economist
participated in considering, drafting, or revising the economic
evaluation of the SUNSET proposed or final rule. These deviations
from usual practice in developing the original SUNSET rule may help
explain why our current RIA differs so greatly from the previous
RIA.
We also note that the Department, in developing the original
SUNSET rule, did not follow other routine internal review
procedures, such as distributing the draft proposed and final rules
to the relevant HHS agencies to solicit their review, comments, and
concurrences. These irregularities may have also contributed to the
flawed execution and analysis in the original SUNSET rule.
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We have also reconsidered the impact of the expiration provision in
the SUNSET final rule and, upon further examination of the comments and
the relevant legal standards, we have determined that the provision is
unsound and in our view unlawful. The expiration provision was a key
element of the SUNSET final rule (as its name suggests); however, the
final rule erred in misjudging the likelihood that HHS regulations
would expire if the SUNSET final rule were to go into effect and be
implemented. As a result, the final rule failed to examine the
instability, uncertainty, and confusion that could be generated by
automatically expiring regulations. Further, we now believe that
amending thousands of regulations to schedule their expiration based on
the Department's purported failure to conduct a small-entity analysis,
without any corresponding notice regarding or evaluation of the public
health importance of the individual regulations or the public's
reliance on them, violates the Administrative Procedure Act (APA) and
is inconsistent with the purpose and intent of the Regulatory
Flexibility Act (RFA). The policy ramifications and legal defects of
the expiration provision call the entire rulemaking into question.
In addition to our reconsideration of the expiration provision, we
have reconsidered more broadly the public comments, the stated legal
bases for the rule, and its RIA, including a consideration of the
impacts that are not quantified or monetized. We have determined that
the SUNSET final rule prioritized regulatory review over other
Department operations to a degree that would negatively impact many
stakeholders and the general public in a variety of ways. We no longer
agree with our previous decision-making in promulgating the SUNSET
final rule, because that decision-making was predicated on: (1) An
inaccurate assessment of the effects of this rule, as indicated in the
comments on both the SUNSET proposed rule and Withdrawal NPRM, and as
discussed in the current RIA; (2) errors of law; and (3) a different
set of policy priorities. We therefore have decided to withdraw the
SUNSET final rule in its entirety.
A. History of the SUNSET Rulemaking
1. Proposed Rule, Comment Period, and Final Rule
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. Under the proposed rule,
subject to certain exceptions, Department regulations would expire at
the end of (1) two calendar years after the year that the SUNSET rule
first became effective, (2) ten calendar years after the year of the
regulation's promulgation, or (3) ten calendar years after the last
year in which the Department ``Assessed'' and, if required,
``Reviewed'' the regulation, whichever was latest. Thus, under the
SUNSET proposed rule, unless HHS assessed and, if required, reviewed
most of its regulations within a certain timeframe specified in the
rule (for most existing regulations, within two years) and every ten
years thereafter, the regulations would automatically expire.
The SUNSET proposed rule also provided that if a review led to a
finding that a regulation should be amended or rescinded, the
Department must amend or rescind the regulation within a specified
timeframe (generally two years). In addition, the SUNSET proposed rule
contained certain publication requirements, including that (1) the
Department publish the results of all ``Assessments'' and ``Reviews,''
including the full underlying analyses and data used to support the
results, in the Federal Register, and (2) the Department announce the
commencement of an ``Assessment'' or ``Review'' of a particular
regulation on a Department-managed website, with an opportunity for
public comment. The SUNSET proposed rule provided that comments to the
proposed rule had to be submitted by December 4, 2020, except for
comments on the portion of the rule amending 42 Code of Federal
Regulations (CFR) parts 400-429 and parts 475-499 (Medicare program
regulations), which were to be submitted by January 4, 2021.
On November 16, 2020, HHS announced a public hearing, scheduled for
November 23, 2020, to receive information and views on the proposed
rule (Public Hearing). 85 FR 73007. All of the commenters, which
included industry/trade organizations, medical organizations, and
public interest organizations, criticized the proposed rule in its
substance, the rulemaking process, or both. See Transcript, Public
Hearing on the Securing Updated and Necessary Statutory Evaluations
Timely Notice of Proposed Rulemaking (Nov. 23, 2020) (available at
<a href="https://www.regulations.gov/document/HHS-OS-2020-0012-0501">https://www.regulations.gov/document/HHS-OS-2020-0012-0501</a>) (Public
Hearing Transcript).
In addition to the oral comments, a wide range of stakeholders
submitted over 500 comments on the proposed rule. Almost all of the
comments opposed the proposal. Comments opposing the rule were
submitted by, for example, health care and medical organizations;
Federally Qualified Health Centers and advocates for beneficiaries of
Federal health care programs; State attorneys general and other state
government representatives; Tribal governments and Tribal
organizations; large industry associations and trade associations;
consumer and public interest groups; and interested individuals. Only a
handful of commenters supported the SUNSET proposed rule, and two of
those comments were submitted by an individual who, under an agreement
with HHS, also provided a draft RIA for the SUNSET final rule. See 86
FR 5737 n.210. Other commenters supporting the rule included
independent business advocacy organizations and a nonprofit legal
organization.
On December 18, 2020, the Office of Information and Regulatory
Affairs (OIRA) in the White House Office of Management and Budget (OMB)
received the SUNSET final rule for review and clearance and posted on
the OIRA dashboard for E.O. 12866 regulatory review (Ref. 1). This
preceded the January 4, 2021, conclusion of the comment period for the
parts of the proposed rule relating to 42 CFR parts 400-429 and parts
475-499.
HHS issued the SUNSET final rule on January 19, 2021. 86 FR 5694.
The final rule provided that all regulations issued by the Secretary or
their delegates or sub-delegates in titles 21, 42, and 45 of the CFR,
subject to certain exceptions, shall expire at the end of (1) five
calendar years after the year that the SUNSET final rule first becomes
effective, (2) ten calendar years after the year of the regulation's
promulgation, or (3) ten calendar years after the last year in which
the Department ``Assessed'' and, if required, ``Reviewed'' the
regulation, whichever is latest. Thus, the final rule contained the
same basic expiration framework as the proposed rule, but extended the
timeframe for assessment and any applicable review of most existing
regulations from two calendar years to five calendar years. The final
rule also provided for a one-time ``continuation'' of a regulation
subject to expiration if the Secretary makes a written determination
that the
[[Page 32249]]
public interest requires continuation. The continuation period, stated
in the determination, is not to exceed one year. In addition, the final
rule contained exemptions for a small set of HHS regulations applicable
to the Food and Drug Administration (FDA), the Centers for Disease
Control and Prevention (CDC), and the Centers for Medicare & Medicaid
Services (CMS). The final rule maintained the timeframe for amendment
or rescission of regulations, and included a new Federal Register
publication requirement in addition to the publication requirements
proposed in the SUNSET proposed rule.
2. Litigation and Delay of Effective Date
On March 9, 2021, the County of Santa Clara and several other
plaintiffs sued the Department seeking to overturn the SUNSET final
rule under the APA. Complaint, County of Santa Clara v. HHS, Case No.
5:21-cv-01655-BLF (N.D. Cal. Mar. 9, 2021) (Santa Clara) (Ref. 2).
On March 18, 2021, the Acting Secretary of HHS signed, pursuant to
5 U.S.C. 705 of the APA, the Administrative Delay, which extended the
effective date of the SUNSET final rule until March 22, 2022. 86 FR
15404. On March 3, 2022, the Secretary further extended the effective
date of the SUNSET final rule until September 22, 2022. 87 FR 12399
(Mar. 4, 2022). At the parties' joint request, the Santa Clara
litigation has thus far been stayed.
3. 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 final 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 substantive comments submitted to the SUNSET
proposed rule docket and raised at the Public Hearing, and the changed
policy views in the current Administration. 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 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. A substantial
majority of comments from a wide range of stakeholders supported the
repeal or withdrawal of the SUNSET final rule. These commenters
included health care and medical organizations; Federally Qualified
Health Centers and advocates for beneficiaries of Federal health care
programs; State attorneys general and other state and local government
representatives; Tribal governments and Tribal organizations; large
industry associations and trade associations; insurance plans and
organizations; and consumer and public interest groups. Most of the
comments that supported retention of the SUNSET final rule and opposed
its withdrawal came from policy advocacy groups, including one business
association and one submission from the individual who, as previously
noted, provided a draft RIA for the SUNSET final rule. See 86 FR 5737
n.210. One comment that supported retention of the original rule was
submitted by a group of state legislators led by a former HHS official
who presented the overview of the SUNSET proposed rule at the Public
Hearing, and another comment was submitted by a different HHS official
from the previous administration. There were also several identical
anonymous comments that supported the original rule and opposed its
repeal or withdrawal.
B. The Department's Review
As described above, 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 changed
policy views in the current Administration. This review considered the
processes followed in issuing the 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 HHS statutory
obligations and its mission to promote and protect the public health.
It should be noted at the outset that HHS recognizes the importance of
retrospective review, already conducts retrospective reviews, and
intends to continue to consider how to improve these existing
processes. See Section V.C.2. The purpose of this review, however, was
to reconsider whether the new requirements imposed in the SUNSET final
rule would achieve the goals of retrospective review in a manner that
best serves the Department's public health and welfare mission and that
is consistent with applicable law.
We have now carefully considered the comments submitted on the
Withdrawal NPRM. As described further below, our consideration of the
comments has confirmed our tentative conclusions described in the
Withdrawal NPRM and our decision to withdraw the SUNSET final rule. In
this section, we summarize the key considerations, addressed in greater
detail throughout the preamble, that have led us to conclude, as
proposed in the Withdrawal NPRM, that the SUNSET final rule should be
withdrawn in its entirety. Many of these considerations, including the
burdens of implementing the rule, the harms of expiration, and the
various legal infirmities, each provide independent and sufficient
reasons for this withdrawal.
First, to be consistent with the Department's usual practices when
engaging in rulemaking, the Department should have engaged in a more
thorough consideration of the comments, and should have given greater
weight to the potential harms to stakeholders and the public health. We
have found that there were several procedural shortcuts taken in
issuing the SUNSET final rule which may have impeded full consideration
of the commenters' significant objections to the proposal as well as
the care and meticulousness devoted to the final product. The SUNSET
final rule was issued on a timeline of less than three months, which is
unusually expedited for a rule of this significance, particularly given
the potential impacts not just on small businesses but also the general
public, larger businesses, Tribes, States, non-governmental
organizations, and other regulated entities and stakeholders across a
wide range of industrial sectors. The SUNSET rule was also remarkably
expansive in scope, requiring review and possibly regulatory or
deregulatory activity across a variety of distinct substantive statutes
within the jurisdiction of several operating divisions (e.g., CMS, FDA,
CDC, Substance Abuse and Mental Health Services Administration
(SAMHSA), the Office for Civil Rights (OCR), and the Administration for
Children and Families (ACF)). However, it appears that the comments
were not adequately considered (as evidenced by the summary mention in
the preamble to the SUNSET final rule, as discussed further elsewhere
in this preamble), and, contrary to policy, the Department
[[Page 32250]]
did not consult with tribal governments.\3\
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\3\ See E.O. 13175, ``Consultation and Coordination With Indian
Tribal Governments,'' 65 FR 67249 (Nov. 6, 2000).
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Second, the Department should have more thoroughly examined the
factual basis of the SUNSET final rule before issuing it. Our thinking
is informed by a reevaluation of the factual premises and conclusions
in the SUNSET final rule that are central to the analysis of the rule's
implications and effects. In particular, based on a reanalysis of the
regulatory impact of the rule, we have now concluded that the rule
rested on a flawed understanding of the resources required for
implementing the SUNSET final rule, which implicates the likelihood
that HHS regulations would have expired, and which would have required
the Department to make resource allocation decisions which could have
impeded the Department's ability to carry out other key priorities.
In particular, the resources required to comply with the assessment
and review requirements would be substantial. For each regulation
covered by the SUNSET final rule, HHS agencies would need to: announce
on a Department-managed website and in the Federal Register the
commencement of an assessment or review; open and publicize public
dockets for each assessment or review that the Department conducts;
collect data to conduct the relevant evaluation (which may require time
for additional public notice and comment, and OMB review and approval,
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., in addition
to the time needed for data collection and analysis); engage subject
matter experts and others to complete an assessment (and possibly a
review); consult with state and local jurisdictions and Tribes, as
appropriate; consider any comments to the public docket related to the
evaluation; participate in interagency review, as appropriate; and
publish the results of this process in the Federal Register,
``including the full underlying analyses and data used to support the
results.'' 86 FR 5712. If the Department could not complete this
extensive process within the final rule's timeframes, the regulations
would then automatically expire. The original RIA for the SUNSET final
rule had erroneously assumed, for example, that an assessment--which
requires each of the steps previously discussed--would take between 3
and 10 hours. We have now revised that estimate to between 40 and 100
hours.
Beyond assessments and reviews, the SUNSET final rule would demand
other significant resources, including the resources required to
implement the overall framework, such as determining which regulations
are exempt, and to amend or repeal regulations within a two-year time
period (unless an extension is granted). These proceedings to amend or
rescind the regulations would require an additional investment of HHS
agencies' resources and public input. In addition, after those
processes, the Department would likely then need to revise guidance
documents and/or forms associated with both expiring regulations and
regulations still in effect. Overall, we have determined that the
SUNSET final rule miscalculated the extent of the resources needed for
this undertaking and likely underestimated the costs of complying with
the rule at least by a factor of four.
This reanalysis shows the SUNSET final rule, if implemented, would
harm the public health and welfare and diminish the Department's
ability to protect and advance the public health and welfare. The
diversion of resources to implement the SUNSET final rule processes,
the potential for automatic expiration of rules, and the actual
expiration of regulations could undermine the operation of existing
programs and otherwise harm the public health in numerous ways,
discussed in greater detail below. For example, the resulting
regulatory uncertainty could have several negative repercussions for
stakeholders, by interfering with planning, contracting, and product
development. The actual expiration of regulations could lead to
confusion among stakeholders and undermine predictability and
confidence in many sectors regulated by the Department.
Third, upon review, HHS has determined that the SUNSET final rule
is contrary to several policy goals of the current Administration. The
SUNSET final rule cited for support an Executive order (E.O.) entitled
``Reducing Regulation and Controlling Regulatory Costs'' (E.O. 13771),
which placed limits on agencies' ability to issue new regulations. 86
FR 5696 (citing 82 FR 9339 (Jan. 30, 2017)). President Biden, on his
first day in office, issued an E.O. entitled ``Revocation of Certain
Executive Orders Concerning Federal Regulation,'' which revoked E.O.
13771.\4\ 86 FR 7049 (Jan. 25, 2021) (E.O. 13992). As stated in E.O.
13992, the current Administration's policy is to equip executive
departments and agencies with flexibility to use available tools such
as robust regulatory action to confront the urgent challenges facing
the Nation, including the coronavirus disease 2019 (COVID-19) pandemic,
economic recovery, racial justice, and climate change. Accordingly,
E.O. 13992 revoked ``harmful policies and directives that threaten to
frustrate the Federal Government's ability to confront these problems
and empowers agencies to use appropriate regulatory tools to achieve
these goals.'' Id.
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\4\ The SUNSET final rule also cited ``Regulatory Relief To
Support Economic Recovery,'' (85 FR 31353, May 22, 2020) (E.O. 13924
of May 19, 2020), which was revoked in E.O. 14018. 86 FR 11855 (Feb.
24, 2021).
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The Biden-Harris Administration has further committed to using
available tools of Federal administrative agencies to, among other
things: 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; make respect for Tribal sovereignty, self-governance,
and regular, meaningful, and robust consultation with Tribal Nations
cornerstones of Federal policy pertaining to American Indian and Alaska
Native people (AI/ANs); and protect and strengthen Medicaid and the
Affordable Care Act (ACA) and make high-quality healthcare accessible
and affordable for every American.\5\
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\5\ See ``Advancing Racial Equity and Support for Underserved
Communities Through the Federal Government,'' 86 FR 7009 (Jan. 25,
2021) (E.O. 13985 of Jan. 20, 2021); ``Tribal Consultation and
Strengthening Nation-to-Nation Relationships,'' 86 FR 7491 (Jan. 29,
2021) (Memorandum of Jan. 26, 2021); ``Strengthening Medicaid and
the Affordable Care Act,'' 86 FR 7793 (Feb. 2, 2021) (E.O. 14009 of
Jan. 28, 2021); ``Continuing to Strengthen Americans' Access to
Affordable, Quality Health Coverage,'' 87 FR 20689 (April 8, 2022)
(E.O. 14070 of April 5, 2022).
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If implemented, the SUNSET final rule would negatively impact
diverse groups of stakeholders, including historically underserved,
marginalized, and adversely affected communities, and undermine the
Department's public health mission. For example, as discussed in more
detail in Section V.A of this preamble, numerous commenters expressed
concern about the anticipated impacts on various populations including
children, the elderly, the disabled, those living in poverty, and
communities marginalized by racism and prejudice, who could lose
eligibility for programs and services if the regulations underpinning
the eligibility requirements were to expire. Public commenters,
including Tribes and tribal representatives, assert that the SUNSET
final rule would threaten the regulatory underpinnings of the Indian
health system, completely disrupt the ability of that system's mission
to provide care to tribal communities, undermine the delivery of HHS
public health and
[[Page 32251]]
social service programs for tribal members, and generate a level of
uncertainty that is the antithesis of the goals of the HHS Tribal
Consultation Policy.\6\ HHS now acknowledges that the SUNSET final rule
does not provide for advance notice of regulations that might
automatically expire, which we believe conflicts with the Department's
policy to engage in meaningful consultation with Tribal Nations. We
further note, however, that attempting to address the lack of adequate
notice of expiring regulations would not resolve more fundamental
problems with the SUNSET framework for tribal and other stakeholders.
---------------------------------------------------------------------------
\6\ U.S. Department of Health and Human Services, HHS Tribal
Consultation Policy (Dec. 12, 2010) (available at <a href="https://www.hhs.gov/about/agencies/iea/tribal-affairs/consultation/index.html">https://www.hhs.gov/about/agencies/iea/tribal-affairs/consultation/index.html</a>).
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Fourth, the Department should have more carefully considered the
legal basis for the SUNSET final rule, including the expiration
provision, which is a cornerstone of the rule. Commenters on the SUNSET
proposed rule had asserted that the Department did not adequately
consider the legal questions raised by the automatic expiration
provisions, which would potentially eliminate regulations without due
notice and consideration of the implications of that specific
expiration. After further review, we have concluded that the legal
reasoning offered in support of the expiration provision did not
address foundational Supreme Court case law requiring agencies to
consider, among other things, the factual bases for a regulation before
eliminating that regulation.\7\
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\7\ The Department is not questioning the legality of the well-
considered establishment of sunsetting provisions in other, more-
targeted circumstances, such as the inclusion of a sunset provision
in a single rule. In such a case, the agency would have provided
notice and the opportunity for comment on, and given due
consideration of, the potential sunset of that particular
regulation. In contrast, the SUNSET final rule was unusually
sweeping and superficial, in that it established automatic
expiration for a large swath of diverse regulations without due
consideration of the substance of each regulation and the impact of
the added sunset provision on affected entities under that
regulation. See Section V.D.1 (discussing, e.g., Dep't of Homeland
Sec. v. Regents of the Univ. of Cal., 140 S. Ct. 1891, 1913 (2020)).
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The SUNSET final rule dismissed these concerns regarding the public
health and legal repercussions of the SUNSET final rule in part by
assuming that regulations would not expire. See, e.g., 86 FR 5710
(``HHS does not intend to allow a regulation to simply expire''); id.
at 5712 (``the Department is committed to dedicating adequate resources
to timely Assess and Review its regulations''); id. at 5714 (``the
Department intends to timely complete the necessary Assessments and
Reviews and has built in safeguards to mitigate the risk of inadvertent
expiration''). The Department failed to consider, however, that public
health and legal problems with the SUNSET final rule exist even if no
expiration occurs. For example, the resources diverted from other key
programs would still undermine the Department's public health mission
and even the possibility of expiration would create serious
instability. The SUNSET final rule did not provide an adequate
justification for, or even acknowledge, either of these likely
consequences.
Moreover, we no longer agree with the Department's previous
assumption that no regulations would expire. Preventing the automatic
expiration of regulations would require prioritizing retrospective
review above many other Department programs and missions. With its
finite set of resources, the Department would be faced with a quandary
of how best to triage the needs of its existing programs (as well as
new public health priorities) and the new regulatory review process
under the SUNSET final rule. On the one hand, given the large scale of
resources necessary to conduct the required reviews, compliance with
these new review requirements would lead to the diversion of resources
from existing and new priority programs to the detriment of the other
programs. This diversion of resources would constrain HHS's
capabilities to carry out mission-critical objectives such as
protecting the health of Americans, strengthening their economic and
social well-being, and fostering sound, sustained advances in medical
innovation and health sciences. On the other hand, the automatic
expiration of regulations could also undermine mission-critical
objectives. Based on our reconsideration and expert judgment, we no
longer consider prioritizing resources to avoid expiration to be in the
best interests of the public health and welfare. Therefore, we believe
that this assumption--that no regulations would expire--was not well
founded. The Department's previous reliance on this unsupported
assumption, together with the miscalculation regarding the resources
necessary to comply with the rule, are in themselves detrimental to the
viability of the SUNSET final rule.
Upon review, we now conclude that the burdens imposed by the SUNSET
final rule could undermine the Department's ability to fulfill its
public health and human services missions, promote national priorities,
and confront the challenges facing the nation--contrary to its
statutory mandates and the policies expressed in EOs 13992, 13985,
14009, and 14070. As further described below, see Section V.C, the
Department already has a longstanding retrospective review plan in
place, and each year publishes in the Federal Register a list of the
rules that it is reviewing, has reviewed, or intends to review under
section 610 of the RFA. And although the Department is committed to
exploring additional ways to improve its processes for conducting
retrospective reviews under the RFA and identify and retire obsolete
rules, the approach in the SUNSET final rule imposes requirements that
are far more onerous than what is needed to meet those objectives and
that would undermine essential Department priorities. In essence,
implementation of the SUNSET final rule would likely have led to a
sharply diminished ability of the Department to provide Federal
leadership in public health and human services. On full consideration,
the Department believes that implementation of the SUNSET final rule
fundamentally conflicts with our policies and ability to achieve our
statutory missions.
IV. Legal Authority
The primary statutory authorities supporting this final rule are
the general rulemaking authorities for the various substantive areas
under the Department's umbrella, as well as a general provision
authorizing agencies to issue regulations regarding the administrative
processes to be followed by that agency. These include:
<bullet> Section 701(a) of the Federal Food, Drug, and Cosmetic Act
(FD&C Act), 21 U.S.C. 371(a), which authorizes the Secretary to
``promulgate regulations for the efficient enforcement of [the FD&C
Act], except as otherwise provided in this section;''
<bullet> Section 215 of the Public Health Service Act (PHS Act), 42
U.S.C. 216, which provides that ``The Surgeon General, with the
approval of the Secretary, unless specifically otherwise provided,
shall promulgate all other regulations necessary to the administration
of the Service[];''
<bullet> Section 1102 of the Social Security Act (SSA), 42 U.S.C.
1302, which provides that the Secretary ``shall make and publish such
rules and regulations, not inconsistent with this Act, as may be
necessary to the efficient administration of the functions with which
[they are] charged under this Act;''
<bullet> Section 1871 of the SSA, 42 U.S.C. 1395hh, which provides
that ``the Secretary shall prescribe such regulations as may be
necessary to carry out the administration of the insurance programs
under this title;''
[[Page 32252]]
<bullet> 42 U.S.C. 2003, which provides that ``the Secretary of
Health and Human Services is also authorized to make such other
regulations as [they] deem desirable to carry out the provisions of
this subchapter [transferring to the Indian Health Service (IHS) the
authority to provide health care services to AI/ANs];'' and
<bullet> 5 U.S.C. 301, which provides 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. This section does
not authorize withholding information from the public or limiting the
availability of records to the public.''
Congress's grant of broad, discretionary rulemaking authority
necessarily includes the authority not to promulgate--and therefore
also to withdraw or repeal--a proposed or final rule. See Natural Res.
Def. Council, Inc. v. SEC, 606 F.2d 1031, 1045 (D.C. Cir. 1979); see
also 5 U.S.C. 551(5) (defining ``rule making'' to include formulating,
amending, and repealing a rule). In addition, ``[t]he power to
reconsider is inherent in the power to decide,'' Albertson v. FCC, 182
F.2d 397, 399 (1950), and, thus, ``[a]dministrative agencies have an
inherent authority to reconsider their own decisions.'' Trujillo v.
Gen. Elec. Co., 621 F.2d 1084, 1086 (10th Cir. 1980).
V. Analysis of and Responses to Public Comments on the Withdrawal NPRM
During the 60-day public comment period, we received approximately
80 public comments. The majority of commenters expressed support for
the Withdrawal NPRM, and in general these comments closely aligned with
comments received in opposition to the SUNSET proposed rule. A
substantial number of these commenters had submitted comments on the
SUNSET proposed rule and either restated, submitted, or referenced
their earlier comments in explaining their support for the Withdrawal
NPRM. In the Withdrawal NPRM, we discussed the substantial number of
comments on the SUNSET proposed rule, and we incorporate the comments
on the SUNSET proposed rule and the discussion of the underlying issues
and comments in the Withdrawal NPRM by reference as part of the basis
for this final rule. Below we summarize and respond to the comments on
the Withdrawal NPRM.
A. Comments on Implementation Burdens on the Department and
Stakeholders
In issuing the Withdrawal NPRM, the Department explained that it
was concerned that implementation of the SUNSET final rule would create
burdens on the Department and on stakeholders that would divert
resources from pressing public health matters and thus harm the public.
89 FR 59911. Below we respond to the comments on the Withdrawal NPRM on
this subject.
1. Burden on the Department
Comment: The Department received numerous comments agreeing with
HHS's explanation in the Withdrawal NPRM that the SUNSET final rule
rested on a significantly flawed understanding of the time and
resources that would have been needed to carry out the scope and pace
of assessments and reviews required under the rule. In general, these
commenters asserted that there are simply not enough HHS staff or
resources to undertake such a sweeping process and simultaneously
evaluate thousands of regulations in a short period of time. Several of
the commenters further explained that the SUNSET final rule would
create more burdens than it would ease and would be unlikely to benefit
industry and consumers. In contrast, one commenter asserted that the
SUNSET rule can and should be implemented and that concern regarding
the enormous scope of the task and pace of reviews that would be
required under the SUNSET final rule is not a valid reason to withdraw
or rescind the rule. The commenter explained that, without the SUNSET
framework, the quantity of regulatory reviews that the Department
should undertake will grow ever more daunting as time passes and
rulemaking persists.
Response: We agree with the commenters who stated that the
framework set forth in the SUNSET final rule would create a tremendous
economic and workload burden on the Department and would require
pursuing the objective of regulatory review at great expense to the
public and to the small business community it purports to benefit. Our
current RIA, revised from the SUNSET final rule, provides ample support
for these assertions. See Section VI. The assessments and reviews
required by the SUNSET final rule would be a colossal undertaking with
significant resource implications. Among other things, approximately
12,400 of the Department's estimated 18,000 sections in the CFR are
over ten years old and would be subject to review during the initial
five-year period. Assessing more than two-thirds of all HHS regulations
simultaneously in a compressed 5-year timeframe, and assessing them
again on a recurring basis ten years after conclusion of the prior
assessment, is infeasible. Many of these comments underscored that the
SUNSET final rule failed to appreciate the scope of its effects on the
Department, including that the rule could compromise some of the
Department's most important public health and public safety
initiatives. As stated in the Withdrawal NPRM, HHS continues to
conclude that the SUNSET final rule ``did not explain how HHS could
devote numerous employees to full-time retrospective review without
compromising the Department's and its sub-agencies' many other crucial
tasks, such as protecting the country from future pandemics or other
public health emergencies.'' 86 FR 59911.
We disagree with one commenter's suggestion that we should
disregard these concerns because we should prioritize retrospective
review as provided under the SUNSET final rule. First, we disagree that
the framework that would have been established by the SUNSET final rule
is an appropriate model for engaging in retrospective review. As
discussed in further detail in Sections V.C. and D. of this preamble,
the framework that would have been implemented under the SUNSET final
rule is inconsistent with the requirements and objectives of the RFA;
does not fulfill the directives of EOs related to retrospective review,
such as E.O. 13563 on ``Improving Regulation and Regulatory Review;''
and likely violates the APA. Second, the disruption to the Department's
normal operations that would have been caused by the implementation of
the SUNSET final rule is too sizable to disregard and is an entirely
valid reason to reject these self-imposed procedures. As discussed in
Section V.C below, the Department intends to continue to engage in
retrospective review and to explore ways to improve those processes in
a manner that is consistent with applicable law and does not undermine
its core missions.
Comment: A number of commenters supporting the Withdrawal NPRM
highlighted the concern that the SUNSET final rule would shift the
Department's focus away from its public health mission. Several of
these commenters particularly focused on concerns that the SUNSET final
rule would divert resources and attention from the urgent COVID-19
pandemic response and impact the Department's ability to develop policy
and
[[Page 32253]]
promulgate regulations implementing new Federal laws and programs to
address pandemic relief. In describing the need for the Department to
remain flexible and have the capacity to respond quickly to crises and
changing circumstances, one commenter gave the example of CMS needing
to take action during the pandemic to swiftly approve hundreds of
waivers and state plan amendments so people with disabilities could
remain safely in their home. The commenter concluded that, if the
SUNSET final rule had been in effect and CMS staff were hamstrung by
assessments and reviews, they may not have been able to pivot quickly
and review and approve states' crucial changes. Some commenters also
expressed concern that the SUNSET final rule would divert resources and
attention from other public health emergencies like the opioid
epidemic.
Commenters also expressed concern that the volume of assessments
and reviews would detract from the Department's overarching work to
address the needs of vulnerable populations including children, the
elderly, the disabled, those living in poverty, the LGBTQ community,
patients living with HIV/AIDS, tribal members, and communities of
color. Commenters stated that the SUNSET final rule would frustrate the
objectives articulated in E.O. 13985, ``Advancing Racial Equity and
Support for Underserved Communities Through the Federal Government,''
86 FR 7009, by burdening the programs that serve vulnerable populations
and communities of color.
In addition, commenters asserted that implementation of the SUNSET
final rule would detract from public health and innovation in the
health sector by diverting FDA staff time from regulatory science,
engagement with sponsors to support product development, communication
of standards to stakeholders on new therapeutic areas such as gene
editing, and the conduct of timely reviews of new drug applications.
Other commenters expressed concern that the SUNSET final rule would
undermine FDA's ability to ensure the safety of food and medicines
because the burden of assessments and reviews could divert resources
from the implementation and enforcement of existing regulations
impacting public safety, patient safety, and public health.
Response: We agree that redirecting significant resources from core
HHS functions and priorities to undertake assessments and reviews and
preserve regulations from automatic expiration under the SUNSET final
rule would be contrary to the Department's role as the U.S.
Government's principal agency for protecting the health of all
Americans and providing essential human services, especially for those
who are least able to help themselves. The Department's ongoing
experience with the current pandemic reinforces the need for the
Department to remain flexible and focused on the management and
utilization of HHS resources. The SUNSET final rule, however, would
require HHS to redirect subject matter experts, including program
analysts and administrators, economists, and counsel, to perform
assessments and reviews. The SUNSET framework would require
prioritizing retrospective review above many other Department programs
and missions, including both ongoing program operations and the
development of new policies and regulations (often necessitated by new
statutory requirements) to address public health needs such as the
needs of vulnerable populations and advances in health care products
and services. Because of these effects, the SUNSET final rule poses a
significant risk of future harm.
Moreover, as described in the Withdrawal NPRM, the SUNSET final
rule provides no good cause exception to avert the expiration of a
regulation, such as in the event of a pandemic, a public health
emergency, or another declared national emergency. 86 FR 59912.
Although the SUNSET final rule added a provision to permit the
Secretary to extend the period for assessments and reviews, the
extension could only be applied one time, for up to one year, per each
section of regulation, and the extension could only be exercised
through a determination published in the Federal Register. 86 FR 5725.
Given the brief extension available for the assessment and review and
the potential duration of an emergency (as evidenced by the current 2
years plus duration of the COVID-19 pandemic), the Department has
determined that the SUNSET final rule was incorrect to conclude that
this option would be sufficient to avoid the diversion of resources and
the automatic expiration of regulations in the event of a pandemic,
emergency, or other development that prevents the Department from
timely assessing or reviewing certain sections. Id. at 5726. Even if a
broader good cause exception were included, the option of employing an
exceptional process for emergencies would not begin to address the
substantial burdens imposed by, and fundamental policy and legal
problems with, the SUNSET final rule, with its application to virtually
all of HHS regulations.
2. Burden on Stakeholders
Comment: Commenters representing industry and public interest
groups supported withdrawing or repealing the SUNSET final rule because
of the expected burden on the general public and entities with an
interest in the underlying regulations. These stakeholders explained
that the rule failed to adequately consider the burden imposed on
regulated industry and others to both track HHS regulations for
potential expiration and submit comments related to the assessments and
reviews. For example, one commenter expressed concern that if the
SUNSET final rule is not withdrawn, their advocacy organization would
need to redirect resources to monitor the status of the approximately
2,000 FDA regulations and then, if needed, invest at least 40 to 100
hours per rule to provide comments. Another coalition estimated that
over 1,000 CMS regulations would require their immediate attention if
the SUNSET final rule was not withdrawn or repealed. Among industry
stakeholders, one commenter stated that, rather than having a
deregulatory impact, the SUNSET final rule would require near constant
vigilance as relatively stable regulatory schemes like Medicaid
programs would become subject to constant change.
Response: The Department believes that any retrospective review
process should not impose an undue burden on the public and agrees that
the SUNSET final rule would be extremely burdensome on stakeholders to
monitor and provide input on both assessments and reviews. As noted in
the Withdrawal NPRM, approximately 12,400 of the Department's estimated
18,000 sections in the CFR are over ten years old, and each of these
are regulations that could automatically expire five years after the
SUNSET final rule's effective date if the rule were implemented. Under
the timeline and definitions provided in the final rule, over 7,000
sections of the CFR that were promulgated by the FDA are more than ten
years old, or would become more than ten years old during the first
five years the rule would be in effect, representing over 95 percent of
this agency's current regulations. 86 FR 59912. These numbers indicate
that the burden of public participation is significant. In addition,
HHS no longer agrees with its previous approach of putting the onus on
the public to monitor the Department's progress under the rule to
prevent expiration.
[[Page 32254]]
The SUNSET final rule stated that a ``safeguard'' to mitigate the risk
of inadvertent expiration was for the public to perform this monitoring
function and submit comments requesting that the Department commence an
assessment or review. 86 FR 5714. We no longer believe it is
appropriate to set up a system that depends on stakeholders, including
non-profits and state, tribal, and local governments, to ensure that a
Department performs an administrative function properly, due to the
significant resources it would require those stakeholders to invest in
such an effort.
Comment: Several commenters expressing support for the Withdrawal
NPRM stated that it would be difficult, if not impossible, for the
public to accurately determine whether and when a regulation would be
subject to review under the SUNSET final rule, and if so, the deadline
for informing the Department and commenting. Many of these commenters
noted, in response to similar comments on the SUNSET proposed rule, the
Department had attempted to mitigate those concerns in the SUNSET final
rule by providing that the Department would (1) publish a monthly list
of new assessment or review that have commenced and (2) establish a
general docket where the public could alert the Department when a
regulation may be at risk of expiration because of an approaching
deadline for assessment or review. 86 FR 5702. However, the commenters
explained that these mitigation efforts are insufficient to address the
difficulty of continuously monitoring the pace of assessments and
reviews and the burden on stakeholders to alert the Department
regarding potentially expiring rules. Another commenter disagreed and
stated that, if a section of a regulation were to inadvertently expire
under the SUNSET final rule, HHS could follow the APA's flexible
rulemaking procedure to readopt it.
Response: The Department agrees that the overall framework of the
SUNSET final rule would make it difficult and confusing for the
Department to implement and for stakeholders to follow. For example,
the SUNSET final rule would require each section of the CFR to be
assessed and, if applicable, reviewed in the context of the final rule
under which it was promulgated. However, final rules often cross-
reference or amend previously promulgated sections of the CFR. Given
this complication, it would be difficult for the HHS to accurately and
comprehensively develop and maintain a list for stakeholders regarding
regulations that could expire under the SUNSET final rule framework.
Moreover, the Department agrees that it is unreasonable to expect
stakeholders to navigate such a process. We conclude it is
inappropriate for the SUNSET final rule to rely in part on the public
submitting comments requesting that the Department assess or review a
regulation in order to operationalize the final rule.
The Department also has determined that addressing the inadvertent
expiration of a regulation under the SUNSET final rule by reissuing the
implicated regulation would be inefficient, costly, wasteful, and
confusing--with insufficient, and in many cases, no countervailing
benefit. Such an effort would require a full notice and comment
process, as well as a full economic assessment, for a proposed and
final rule during which stakeholders and programs would experience the
legal and regulatory uncertainty of an expired regulation.
3. Comments on Economic Evaluation of Burdens
Comment: A few commenters disagreed with the Department's
assessment in the Withdrawal NPRM of the burden of the SUNSET final
rule and asserted that the Withdrawal NPRM's RIA overstated the cost
estimated for implementing the SUNSET final rule. More specifically,
some commenters questioned the estimates for burdens on stakeholders to
comment on assessments and reviews based on these commenters'
prediction that most members of the public have little incentive to
take an interest in the assessment and review of individual HHS
policies. One comment suggested the costs were overstated because the
regulations that were the subject of stakeholder comments would be
eliminating costs on these (and other) commenters. The comment also
asserted that any uncertainty created by the SUNSET final rule is a
``short-term cost[]'' that ``will be resolved as the schedules for
expiration are discovered'' and may be offset by the reduction in
uncertainty associated with diverting HHS resources away from other
actions.
Another comment asserted that HHS ignored the concept of ``rent-
seeking'' when it considered the costs of HHS regulatory actions and
the ``likely unrepresentative nature of the comments received by HHS''
on the SUNSET proposed rule. The commenter further stated that ``rent-
seeking costs'' may also affect the Department's cost estimates. The
commenter concluded that ``[i]f the entities that submit comments to
the department while it is undergoing retrospective reviews would have
been rent-seeking in absence of having to write comments, then the
private costs to these individuals and groups from writing comments
could well constitute social benefits to society writ large.''
In addition, one comment questioned the estimates for burdens on
the Department. The commenter stated that the Withdrawal NPRM's RIA
used cost estimates for burdens on the Department that were
inconsistent with guidance in OMB Circular A-4 and HHS Guidelines for
Regulatory Impact Analysis.\8\ In the commenter's view, the RIA
incorrectly projected ``accounting costs'' from hiring new personnel to
perform these tasks. The commenter asserted that, instead, the RIA
should have assessed the real opportunity costs to the Department and
taxpayers from the forgone activities such staff would have performed
in the absence of the process required by the SUNSET final rule. The
commenter also questioned the Department's assumption in the RIA for
the Withdrawal NPRM that HHS would follow Small Business Administration
(SBA) guidance in conducting reviews, and asserted that the costs of
conducting reviews would lessen over time.
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\8\ See OMB Circular A-4 (available at <a href="https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf">https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf</a>); HHS Guidelines for Regulatory Impact Analysis
(2016) (available at <a href="https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//171981/HHS_RIAGuidance.pdf">https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//171981/HHS_RIAGuidance.pdf</a>).
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Response: We disagree with these commenters concerning the cost
estimates in the Withdrawal NPRM RIA and continue to believe that the
RIA in the SUNSET final rule likely underestimated the costs of
implementing that rule to a significant degree. With regard to the
estimated burden on stakeholders, as discussed in greater detail in
Section VI, the SUNSET final rule likely underestimated the time and
resource commitment of a credible assessment and review process. The
Department acknowledges that there is uncertainty in the amount of time
the public would spend commenting on assessments and reviews under the
SUNSET final rule. We have appropriately incorporated this uncertainty
into the estimates of the burden to stakeholders by incorporating a
range of estimates of the time spent per comment into our current
evaluation of the burden of the SUNSET final rule. To the extent that
the commenters indicate that the public would submit fewer, rather than
zero, comments prior to the assessments, we have incorporated this into
the Withdrawal NPRM's preliminary RIA by incorporating a lower estimate
of 25
[[Page 32255]]
comments per assessment into our current evaluation of the burden of
the SUNSET final rule. This estimate is about five percent of the
comments anticipated in the SUNSET final rule's RIA for regulations
that the Department announces would be rescinded following a review.
In contrast, the SUNSET final rule's RIA incorrectly based its
burden estimates on an assumption that the public would forego
commenting until the retrospective analysis was complete and the
Department announced its intent to rescind or amend a rulemaking. We
now find this assumption puzzling: It would not make sense to require a
comment process for assessments if the Department thought no one would
be interested in commenting. In any event, we disagree with the
assumption that stakeholders will forego commenting until late in the
process because it is illogical, lacks any evidentiary basis, and is
contrary to the weight of the comments. Indeed, stakeholders have
already demonstrated a high level of interest in the subject of this
rulemaking.\9\ We understand that these stakeholders would be motivated
to comment because they would want to ensure that HHS has up-to-date
information to correctly evaluate both the impacts of a rulemaking and
potential changes to the regulations. We also note that Congress, in
drafting the RFA, appeared to believe the public would be interested in
commenting on reviews because it required agencies to provide an
opportunity for public participation in the review process.
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\9\ As noted above, a wide range of stakeholders submitted over
500 comments on the SUNSET proposed rule, almost all in opposition,
and several stakeholders filed the Santa Clara lawsuit seeking to
overturn the SUNSET final rule. As discussed in the Withdrawal NPRM
and in Sections IV.A.2 and IV.B.1. of this preamble, many
stakeholders opposed the SUNSET final rule because the threat of
regulations automatically expiring would increase cost and
confusion, impede competition, and harm the public health in
numerous ways. Moreover, if the SUNSET final rule were to be
implemented, many of these stakeholders have indicated that they
would expect to expend considerable resources tracking HHS
regulations for potential expiration and submitting comments. See
Section V.A.2.
---------------------------------------------------------------------------
We also do not agree that uncertainty is a short term cost. The
SUNSET final rule creates a continuing threat of expiration because,
regardless of the ``schedules for expiration,'' the public cannot know
what public health exigencies may arise in the future and what
decisions the Department will make to serve its mission. The same
uncertainty does not exist with more typical rulemakings because they
have built-in safeguards, such as notice and opportunity for comment.
With regard to the comment about ``rent-seeking,'' this comment
appears to confuse several economic concepts, including ``rent-
seeking,'' ``rent-seeking costs,'' and economic rent, which makes the
comment difficult to parse and understand. Additionally, we do not
unambiguously attribute to the SUNSET final rule the impacts of
regulations that would be rescinded or amended following a review under
the SUNSET final rule. It is also not clear why the commenter
anticipates that the SUNSET final rule, which would invite public
comment on about 18,000 regulations over ten years, would result in
public comments that are more representative of the views of the
general public than the notice-and-comment rulemaking process the
Department follows under the APA in this rulemaking. As such, it is not
clear how the SUNSET final rule would provide a superior approach to
addressing economic rents attributable to existing regulations.
With respect to the comment on the Withdrawal NPRM preliminary
RIA's estimated burden on the Department, we agree with the commenter
that there would be real opportunity costs to the Department and
taxpayers attributable to forgone activities that would have been
performed in the absence of the process required by the SUNSET final
rule. While we cannot predict all of the likely forgone activities,
they could include, for example, actions to address urgent public
health matters such as COVID-19 pandemic relief efforts or similar
efforts to respond to future emergent threats, FDA review of
applications and the fulfillment of user fee commitments, work to
ameliorate the opioid crisis, stem outbreaks of foodborne illness, and
conduct inspections, recalls and other public health priorities. To the
extent that Department would need to defend challenges related to
expired regulations, such effort would further require the Department
to divert resources from other public health priorities. To measure
these opportunity costs, we adopt the standard approach recommended in
the HHS Guidelines for Regulatory Impact Analysis of a ``default
assumption'' ``that the value of activities conducted during paid work
time can be best approximated by the cost of labor to the employer. The
standard economic model assumes that employers are willing to incur
labor costs equal to the value of workers' marginal product.
Conceptually, this amount represents the value of what the employee
would have otherwise produced in the absence of the regulation. Thus,
the opportunity cost of paid work time can be approximated based on the
employer costs, including pay, benefits, taxes, and associated
overhead.'' \10\
---------------------------------------------------------------------------
\10\ HHS Guidelines for Regulatory Impact Analysis at 27 (2016)
(available at <a href="https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//171981/HHS_RIAGuidance.pdf">https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//171981/HHS_RIAGuidance.pdf</a>). This default
assumption is discussed in greater detail in Valuing Time in U.S.
Department of Health and Human Services Regulatory Impact Analyses:
Conceptual Framework and Best Practices'' (Sept. 17, 2017)
(available at <a href="https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework">https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework</a>).
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However, the commenter is incorrect that the assessments and
reviews would be achieved solely through the reallocation of existing
staff resources. As described in Section VI, implementation of the
SUNSET final rule would require contributions from current and new
Department subject matter experts, lawyers, and other reviewers
informing the retrospective analysis and providing feedback on draft
analyses, time spent by economists and other analysts developing the
retrospective analysis to respond to this feedback, time spent reading
and incorporating evidence from other sources, including public
comments, and other activities. The SUNSET final rule RIA did not
explicitly include these important activities in its estimates of the
time per review. The consequence of excluding these activities in its
analysis is that the SUNSET final rule likely underestimated the total
costs to the Department of the SUNSET final rule to a significant
degree. Our current evaluation of these costs indicates that the
Department would incur additional costs to hire, train, and transfer
personnel with technical expertise.
One comment argued that the Department's cost estimates in the
Withdrawal NPRM are likely to be inaccurate because the comment
disagreed with our assumption that the Department would follow the
recommendations in the SBA guidance.\11\ The commenter cited an
analysis of regulatory impact analyses performed between 2008 and 2013
as support. This analysis, which predates the SBA Guidance published in
August 2017, does not reference ``Regulatory Flexibility Act,''
``regulatory flexibility analysis,'' ``Section 610 reviews,'' ``small
business,'' ``small entity,'' or otherwise contain any evidence that
the Department does not currently follow the recommendations in the SBA
guidance, or any evidence that the Department would not follow these
[[Page 32256]]
recommendations for assessments or reviews performed under the SUNSET
final rule.
---------------------------------------------------------------------------
\11\ ``A Guide for Government Agencies: How to Comply with The
Regulatory Flexibility Act,'' (Aug. 2017) (available at <a href="https://cdn.advocacy.sba.gov/wp-content/uploads/2019/06/21110349/How-to-Comply-with-the-RFA.pdf">https://cdn.advocacy.sba.gov/wp-content/uploads/2019/06/21110349/How-to-Comply-with-the-RFA.pdf</a>).
---------------------------------------------------------------------------
The commenter also discussed the potential that the costs of
conducting reviews will lessen over time. We are not able to fully
evaluate the merits of comment since it does not provide any guide for
when the Department would begin to experience these lower costs, and
because it does not include a quantification of the reduction in time
per assessment or review resulting in lower costs over time. See
Section VI.
B. Comments on Potential Harms From the Possible and Actual Expiration
of Regulations
In issuing the Withdrawal NPRM, the Department explained that it
was concerned that, if the SUNSET final rule were implemented, both the
possibility of automatic expiration of HHS regulations, and the actual
expiration of HHS regulations, could harm the public. 89 FR 59914.
Below we respond to the comments on the Withdrawal NPRM on this
subject.
1. Impact on Stakeholders in General
Comment: A number of commenters, including health care providers,
public interest groups, and private sector entities, urged HHS to
withdraw the SUNSET final rule because it would create unpredictability
for industry and consumers. These commenters noted that the lack of
predictability concerning the potential automatic expiration of
regulations could result in the haphazard vacating of numerous existing
rules without appropriate communication to regulated entities, and
potentially upend long-standing foundational rules with provisions that
are inter-related with other rules. The commenters expressed concern
that such unpredictability regarding large swathes of the rules
governing public health and welfare could lead to adverse impacts for
stakeholders.
Several of these comments expressed concern that the SUNSET final
rule would introduce uncertainty regarding the validity and
enforceability of regulations and wreak havoc on HHS programs.
Commenters noted that there would be uncertainty and confusion
regarding the current and future regulatory status of rules slated for
review and assessment, and that expiring regulations could leave vast,
gaping holes in the regulatory framework implementing HHS programs and
policies and introduce confusion and sudden shifts in regulatory
requirements. Commenters further noted that if the intent of the SUNSET
final rule was to ease burdens upon small businesses, it would more
likely have the opposite effect. All businesses, but most especially
small ones, benefit from transparent regulation that can be planned
for, budgeted for, and implemented.
Among these commenters, several representatives of industry
coalitions whose membership includes small entities also warned that,
if not withdrawn or repealed, the SUNSET final rule could engender
chaos and harm to both industry and consumers. Several commenters
discussed the time, resources, and capital investments made by the food
industry because of reliance on durable public standards that have been
codified in regulation. The commenters expressed significant concerns
about the expansive and accelerated approach taken in the SUNSET final
rule and the disproportionate burden and uncertainty small entities
would face should the final rule lead to the expiration of regulations
that have been in place for years and are essential to a level playing
field within the industry.
Commenters also described the impacts of regulatory uncertainty on
public health. One commenter described the potential damaging effects
the SUNSET final rule would have on the drug development process, where
drug sponsors rely on a predictable regulatory environment to plan
their development programs. The commenter stated that an environment in
which FDA or other HHS regulations may be capriciously eliminated could
hamper progress on much needed therapies in the drug development
pipeline. One commenter specifically referenced the consequences of a
lack of public confidence in food labeling, including the rules that
inform consumers about the ingredients and nutrient content of their
food, and safety rules concerning Salmonella, Shiga toxin-producing E.
coli, and other potentially deadly foodborne pathogens. Other
commenters provided examples of harms of uncertainty to the HHS
programs such as Temporary Assistance for Needy Families (TANF) and the
Child Care and Development Fund (CCDF), where a strong regulatory
framework provides the clarity needed to run these programs on a day-
to-day basis, gives providers guidance on their obligations, and
explains to beneficiaries what their benefits mean.
Response: We agree with these comments about the importance of a
relatively steady and predictable regulatory environment and appreciate
the examples of the ways the SUNSET final rule would introduce
unpredictability regarding HHS regulations and the associated harms.
Given the complicated resource allocation decisions necessary to
implement the review framework prescribed in the SUNSET final rule, HHS
is unable to forecast the number of or identify specific regulations
that may expire without a completed assessment and, if applicable,
review. It therefore may be difficult for stakeholders to know which
regulations would remain in place because that would depend on whether
the Department could actually complete each regulation's assessment
and/or review by the assessment or review deadline. We concur that the
potential automatic expiration of large swathes of rules, or even one
complex rule, without notice of the reasoned justification for retiring
that rule or set of rules, could create uncertainty and
unpredictability regarding regulatory programs going forward.
Although the SUNSET final rule stated that it ``does not believe
uncertainty among the regulated community will add significantly to the
costs of this rulemaking'' because ``there is always a possibility that
regulations could be amended or rescinded, even absent this rule,'' 86
FR 5709, HHS now concludes that this reasoning was flawed. The rule's
automatic expiration of regulations is very different from amendment or
rescission through notice and comment rulemaking, because there is no
built-in safeguard of prior notice for automatic expiration, and no
process for obtaining stakeholder input on the implications of losing
the regulation. Therefore, expiration could be haphazard and
unpredictable and without appropriate notice to and input from
stakeholders. This outcome would be far more disruptive than the
existing possibility of targeted changes to regulations based on a
reasoned justification such as a change in the governing law,
technology, policy, or other circumstances. Moreover, the Department
generally uses mechanisms such as the Unified Agenda of Regulatory and
Deregulatory Actions (Unified Agenda) and the HHS Regulatory Agenda,
which are published in the Federal Register, to provide advance notice
and predictability to affected stakeholders about specific regulations
that may be amended or rescinded.\12\
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\12\ See, e.g., Regulatory Information Service Center,
``Introduction to the Unified Agenda of Regulatory and Deregulatory
Actions--Fall 2021'', 87 FR 5002, 5009 (Jan. 31, 2022).
---------------------------------------------------------------------------
We have now determined that the mechanisms described in the SUNSET
final rule, which include a dashboard on the HHS website that shows the
[[Page 32257]]
progress of Assessments and Reviews and when HHS expects them to be
completed, are insufficient to provide adequate clarity concerning
regulations that may be subject to automatic expiration. As discussed
in greater detail in Section V.E, the rule includes a number of vague
and confusing provisions that would make it difficult to determine when
any given section of the CFR is subject to expiration. For example, a
section may need to be reviewed multiple times as part of multiple
rulemakings to avoid expiration, or it may require no review at all
because it has been determined to fall within an exception. The public
could not necessarily predict, from looking at the dashboard, the fate
of that particular section. Moreover, rulemakings could be added or
deleted from the dashboard at HHS's discretion, so the fact that a
particular rulemaking is absent would not necessarily mean that the
public could draw conclusions regarding the rule's expiration status
until the expiration date is near. For these reasons, a dashboard
indicating the progress of assessments and reviews would not adequately
alleviate public uncertainty about the loss of regulations. These
uncertainties could have several adverse repercussions as discussed in
the Withdrawal NPRM, comments to the SUNSET proposed rule and
Withdrawal NPRM, and below, for example, in the following comment and
response.
Comment: A variety of commenters including states, tribes,
municipalities, hospital systems, insurers, healthcare providers, and
patient advocacy organizations expressed support for the Withdrawal
NPRM, citing the potential consequences of the SUNSET final rule
creating uncertainty about the stability and predictability of HHS
regulations and causing harm if HHS regulations were to actually
expire. A number of commenters described the risk of such uncertainty
for the Modified Adjusted Gross Income (MAGI) regulations, which are
relied upon by states and state agencies to determine who is eligible
for certain Medicare and Medicaid programs, Medicare Advantage, the
Children's Health Insurance Program (CHIP), and insurance affordability
programs through the Health Insurance Marketplace, as well as the
consequences of such uncertainty for individuals in trying to ascertain
their likely eligibility for these programs. Commenters underscored
that Medicaid and CHIP are large, complex, Federal-state health
insurance programs that affect not only all of the states and
territories, but also millions of beneficiaries, tens of thousands of
providers, and hundreds of managed care plans. They stated that these
stakeholders have a legitimate expectation of stability in the Federal
regulatory guidelines for these programs and that predictable and
reliable Federal regulations are essential to facilitate their
effective implementation, so that providers understand what their
obligations are, and beneficiaries can understand what they are
entitled to receive. Commenters emphasized the significance of these
and other HHS administered healthcare programs for seniors, children,
the disabled, low-income and rural communities, and other vulnerable
segments of the population including people of color, members of the
LGBTQ+ community, and others who suffer health disparities, and the
dire consequences they would suffer if regulations were to expire under
the SUNSET final rule and safety net programs were disrupted.
Commenters noted that the SUNSET final rule is at odds with the policy
goals of E.O. 14009, ``Strengthening Medicaid and the Affordable Care
Act'', 86 FR 7793, by weakening the strong regulatory framework
necessary for states to implement these complex programs that provide
health care access to millions of otherwise uninsured Americans.
Other commenters described the potential impact of expiration on
stakeholders in the food industry and on consumer confidence in the
safety of food and medical products. They provided examples of harms
that would result in the event FDA regulations concerning false and
misleading medical product labeling and advertising, nutrition
labeling, food safety, or food standards of identity were to expire.
Comments on the SUNSET proposed rule provided numerous additional
examples related to HHS programs, as discussed in the Withdrawal NPRM.
86 FR 59915-59917.
Response: We thank the commenters for illustrating the many ways
participants across the health care system and other Department
programs would be harmed if they could not depend on the integrity and
reliability of HHS regulations. We agree that, beyond the harm of
regulatory uncertainty, the damage from actual expiration of
regulations could be severe. As explained in the Withdrawal NPRM and in
Section III.B., we have determined that regulations are likely to
expire under the SUNSET final rule. Expiration could cause serious harm
to millions of stakeholders who rely on HHS programs, including
underserved populations; upend established understandings across the
public health spectrum as to how to comply with statutory requirements;
and disrupt established industry standards that advance public health,
create a level playing field for businesses, and boost consumer
confidence. Because of these potential harms, we now conclude that the
automatic expiration provision is contrary to the Department's mission
to protect the health of all Americans and provide essential human
services, especially for those who are least able to help themselves.
States, non-state government entities, hospitals and other health
providers, insurers and managed care plans, and other key stakeholders
in our country's health care system structure their programmatic and
business operations to satisfy the current Federal regulations. These
rules help beneficiaries and potential applicants to understand the
coverage they are or may be entitled to receive, patients to understand
their rights in accessing and receiving care, and providers to
understand their patients' coverage. As discussed in the Withdrawal
NPRM, the expiration of these regulations could mean that these and
other regulated entities would be unsure how to comply with long-
standing statutory requirements and may no longer be compelled to
comply with long-standing safety standards. See 86 FR 59915-59917.
Likewise, we now recognize, as discussed in Section V.D of this
preamble, that the SUNSET final rule could result in rescinding rules
in their entirety without a rule-specific justification or an
opportunity for the public to comment on that justification, including
identifying potential harms associated with the expiration.
2. Impacts on State, Local, and Tribal Governments
Comment: Several tribal organizations explained that the SUNSET
final rule would undermine crucial regulatory protections for AI/ANs in
accessing healthcare, including HHS regulations that are based in
statute and developed through years of government-to-government
consultation between Tribal Leaders and HHS Leadership. Tribal
commenters expressed support for HHS's Withdrawal NPRM because the
SUNSET final rule threatens the regulations intended to protect AI/ANs.
These commenters also opposed the SUNSET final rule because they said
the Department failed to abide by the HHS Tribal Consultation Policy
and conduct tribal consultation to minimize the implications of this
rule on tribal governments. One tribal commenter
[[Page 32258]]
expressed appreciation for the change of direction on the SUNSET final
rule and hoped that the Department continues in this spirit of
accounting for the impact of such decisions on Tribal Nations.
Response: HHS respects and appreciates the leadership and
partnership of Tribal Nations in protecting the health of AI/ANs. The
Department is committed to strengthening the Nation-to-Nation
relationship between the United States and federally recognized Indian
Tribes.
As discussed in the Withdrawal NPRM, HHS acknowledges that
consultation with Tribal governments on the SUNSET proposed rule was
not adequate. The Department also recognizes that it previously stated
that the SUNSET final rule ``would have no direct impact on Indian
Tribes, beyond their costs of participation in the monitoring,
Assessment, and Review processes,'' based on an assumption that
regulations would not expire. 86 FR 5711. However, we have now
determined, and explained in detail throughout this preamble, that the
Department's prior assumption that regulations would not expire was not
well-founded. Therefore, HHS has revised its view of the impacts of the
SUNSET final rule on Tribal Nations.
The IHS serves over 2.6 million AI/ANs and the Department
recognizes that there are stark health disparities that persist in
Tribal communities. The COVID-19 pandemic's devastating impact on
Tribal communities has demonstrated the real human toll of these
disparities. HHS concludes that the SUNSET final rule would only make
it harder to expand access to high-quality health care across Indian
Country, because it is likely to divert resources from HHS programs
serving Tribes and introduce uncertainty and a threat of expiration for
regulations that support HHS programs serving tribal communities.
Likewise, the SUNSET final rule does not provide for advance notice of
regulations that might automatically expire which would make it
difficult for the Department or Tribes to initiate consultation.
Moreover, even if these significant deficiencies could be improved, it
would still not resolve more fundamental problems the SUNSET framework
presents for tribal stakeholders, such as the burdens imposed on and
uncertainties created for many stakeholders.
As discussed in the Withdrawal NPRM, HHS now acknowledges the
SUNSET final rule conflicts with the Department's policy to engage in
meaningful consultation. See 86 FR 55911. HHS believes finalizing the
Withdrawal NPRM is consistent with the objectives of the January 26,
2021, Presidential memorandum on ``Tribal Consultation and
Strengthening Nation-to-Nation Relationships,'' which reaffirmed the
tribal consultation policy outlined in E.O. 13175, and announced that
the Biden-Harris administration priority to make respect for Tribal
sovereignty, self-governance, and regular, meaningful, and robust
consultation with Tribal Nations cornerstones of Federal Indian policy.
86 FR 7491.
Comment: A number of states, municipalities, and State attorneys
general expressed concern that the SUNSET final rule would pose a
direct threat to state health care systems and the health and safety of
their residents. The commenters indicated that states are directly
threatened by the SUNSET final rule because they depend on HHS to
administer trillions of dollars in Federal funding, governed by an
intricate web of regulations and requirements. A comment from State
attorneys general explained that, by permitting complex regulatory
systems to automatically expire, the SUNSET final rule could have dire
consequences for those who stand to lose health benefits or services
but have no recourse to prevent that loss. One commenter stated that
the SUNSET final rule stands to undermine the operations of state
partners, such as state Medicaid agencies, and would impede their
ability to provide services for Medicaid beneficiaries.
Response: We agree that many diverse stakeholders throughout the
country, including states, state Medicaid and other program agencies,
and tribal governments, as well as health care providers, program
beneficiaries, and others who rely on the legal framework established
by the Department's regulations and their implementation of the
relevant statutes, could experience undue disruption as a result of the
SUNSET final rule. As discussed in the Withdrawal NPRM, the automatic,
potentially haphazard and unpredictable expiration of regulations could
result in significant disruption, based on the sudden and unexamined
removal of the prior regulatory framework without accompanying
explanation or replacement. We appreciate the comments highlighting
challenges that this scenario could present for many stakeholders,
including state and tribal governments.
3. Other Comments on Expiration
Comment: A few commenters expressed doubt that accidental and
unintended expiration of regulations would occur and pointed to the
experience of North Carolina and Missouri. Each of those states has an
established process for the review of state regulations that features a
sunset mechanism. One commenter stated that North Carolina's process
resulted in no reports of accidental expirations. The commenter
suggested that, because the quantity of HHS regulations is similar to
the number of all regulations promulgated in North Carolina, the
process should not be difficult for HHS to implement and avoid any
expiration of a regulation. A second comment stated that Missouri
connects a sunset provision to a five-year periodic review requirement
in a manner similar to the SUNSET rule. The commenter shared a quote
from the Missouri attorney general stating that they were not aware of
any regulations that had expired as a result of Missouri's sunset
provision and that state agencies review every regulation under their
control.
Response: We address in greater detail in Section V.C the many
significant differences between the SUNSET final rule and these and
other state sunset laws--here we address only the specific points
regarding the potential expiration of regulations. We disagree with
these commenters in their assertions that we should extrapolate from
these state examples to conclude that regulations would not expire
under the SUNSET final rule because there are too many substantial
differences to make a direct comparison helpful or appropriate. North
Carolina's reviews are less burdensome overall because North Carolina's
experience does not entail the multi-factor review and assessment
required by the SUNSET final rule. We similarly find that Missouri's
experience does not match the scale and scope of the SUNSET final
rule's assessment and review scheme. For example, the most recent
reports of the Missouri State Auditor responsible for assessing state
agency compliance with periodic rule review found that the Missouri
Department of Health and Human Services reviewed 759 rules and received
no comments on its review and that the Department of Mental Health
reviewed 156 rules and received 14 comments.\13\ These rules represent
a small fraction of the number of HHS regulations covering all of the
HHS agencies and divisions, and the comment offers no analysis as to
whether individual Missouri rules are
[[Page 32259]]
comparable to HHS regulations in terms of length and complexity.
Furthermore, HHS regulations are national in scope, have an impact on a
much greater number of programs and persons, and cover more diverse
circumstances than state regulations. In issuing its regulations, HHS
also follows Federal procedures and policies as set forth in statutes,
EOs, and Department memoranda, which are not applicable to states.
Accordingly, the review of HHS regulations is likely to entail greater
complexities and the level of public interest in the HHS rules is
likely to be much higher, which would result in significantly more
comments. Thus, the pace and resources required to review North
Carolina's and Missouri's inventory of regulations are not indicative
of what HHS would experience under the SUNSET final rule, including the
likelihood of expiring regulations.
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\13\ See Nicole Galloway, Missouri State Auditor Report No.
2019-126 (Dec. 19, 2019) (available at <a href="https://app.auditor.mo.gov/Repository/Press/2019126349658.pdf">https://app.auditor.mo.gov/Repository/Press/2019126349658.pdf</a>); Nicole Galloway, Missouri State
Auditor Report No. 2017-152 (Dec. 19, 2017) (available at <a href="https://app.auditor.mo.gov/Repository/Press/2017152319255.pdf">https://app.auditor.mo.gov/Repository/Press/2017152319255.pdf</a>).
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Moreover, as explained in Section III.B., implementation of the
SUNSET final rule would require the Department to choose how to
prioritize its resources as between (1) addressing existing and new
priorities, including promulgating new congressionally directed
regulations, and (2) preserving regulations from expiration. The fact
that certain states with ``sunset'' programs can, and have chosen to,
allocate resources in a way that preserves their regulations from
expiration does not in any way imply that HHS would or could make the
same choices in confronting this question. As explained above, we have
considered the overall burdens and the ways in which full
implementation of the SUNSET program would undermine other Department
objectives, and we have concluded that prioritizing resources on SUNSET
compliance, in order to avoid regulatory expiration, is not in the best
interests of the public health and welfare. Therefore, we think
regulations will expire. Whether states have made different choices
does not determine the Department's analysis regarding its obligations
and priorities.
C. Comments on the RFA and Retrospective Review
In the Withdrawal NPRM, we tentatively concluded that the final
rule may be harmful to small entities, inconsistent with Congress's
intent in enacting the RFA, and unnecessary to achieve the RFA's
objectives or to incentivize the Department to engage in retrospective
review. 86 FR 59917. In this section, we respond to the comments
submitted both on policy issues related to retrospective review and on
compliance with the RFA.
1. SUNSET Final Rule's Degree of Consistency With the RFA
Comment: Numerous commenters supported withdrawal of the SUNSET
final rule as inconsistent with the RFA. Many of these commenters
agreed with HHS's assertion in the Withdrawal NPRM that the SUNSET
final rule imposes requirements beyond the requirements of the RFA.
Several of these commenters noted that the RFA focuses on review of
only those rules that have or will have a ``Significant Economic Impact
Upon a Substantial Number of Small Entities'' (SEISNOSE), and the
SUNSET rule exceeds that scope because it requires assessment of all
agency rules regardless of whether they have a SEISNOSE. One commenter
noted that the majority of the regulations to which the SUNSET final
rule applies do not actually fall within the scope of the RFA, citing
the SUNSET final rule's assumptions, which estimate that only 15% of
the Department's regulations have a SEISNOSE. Commenters also
questioned HHS's authority to impose the SUNSET rule's requirements for
the scale and speed of assessments and reviews in the absence of
express authorization in the RFA. One commenter noted that courts have
uniformly recognized the limited scope of the RFA and that the SUNSET
final rule's expansion of the RFA's requirements finds no support in
the text or purpose of the statute. Several commenters also noted that
the RFA does not authorize agencies to retroactively impose a blanket
expiration date to rescind regulations.
Response: The Department agrees with these commenters that the
SUNSET final rule's requirements exceed the RFA's requirements.
Specifically, the Department agrees with the commenters who noted that
the rule's requirement that the Department ``assess'' all HHS
regulations within certain timeframes, to determine whether the
regulations have or will have a SEISNOSE, exceeds the express
requirements of section 610 of the RFA, which contemplates periodic
review of only ``rules . . . which have or will have a [SEISNOSE].''
Nothing in the express language of that section requires agencies to
identify such rules by conducting ``assessments'' of every rule issued
by the agency and to comply with the SUNSET final rule's notice and
comment requirements for such assessments. Indeed, section 610 does not
specify any means of identifying rules that have or will have a
SEISNOSE. Section 610(a)'s silence with respect to identifying rules
that have or will have a SEISNOSE, when contrasted with other
provisions of that section explicitly imposing specific requirements on
agencies' retrospective reviews, see, e.g., 5 U.S.C. 610(b) (requiring
agencies to consider specific enumerated factors when conducting
reviews), indicates that Congress intended to leave such determinations
to agencies' discretion. See Fisher v. Pension Benefit Guar. Corp., 994
F.3d 664, 671 (D.C. Cir. 2021) (``In an administrative setting, . . .
`the contrast between Congress' mandate in one context with its silence
in another suggests . . . a decision not to mandate any solution in the
second context, i.e., to leave the question to agency discretion.' '').
Judicial decisions have reinforced agencies' discretion under the
RFA. As the D.C. Circuit has explained, ``the Act in and of itself
imposes no substantive constraint on agency decisionmaking,'' Nat'l
Tel. Co-op Ass'n v. FCC, 563 F.3d 536, 540 (D.C. Cir. 2009), but
instead is limited to ``setting out precise, specific steps an agency
must take,'' Aeronautical Repair Station Ass'n, Inc. v. FAA, 494 F.3d
161, 178 (D.C. Cir. 2007). Courts have therefore instructed that the
RFA ``requires nothing more than that the agency . . . demonstrate[e] a
reasonable, good faith effort to carry out'' those steps. U.S. Cellular
Corp. v. FCC, 254 F.3d 78, 88 (D.C. Cir. 2001); Aeronautical Repair
Station, 494 F.3d at 178 (``[Section 604 of] the Act requires agencies
to publish analyses that address certain legally delineated topics.
Because the analysis at issue here undoubtedly addressed all of the
legally mandated subject areas, it complies with the Act.''); see also
Montgomery Cty., Maryland v. Fed. Commc'ns Comm'n, 863 F.3d 485, 495
(6th Cir. 2017) (upholding agency's final regulatory flexibility
analysis as ``procedurally adequate''); Zero Zone, Inc. v. United
States Dep't of Energy, 832 F.3d 654, 683 (7th Cir. 2016) (citing U.S.
Cellular Corp., 254 F.3d at 88); Alenco Commc'ns, Inc. v. FCC, 201 F.3d
608, 625 (5th Cir. 2000) (citing Assoc. Fisheries of Me., Inc. v.
Daley, 127 F.3d 104, 114 (1st Cir. 1997)).
In addition to not being mandated by the RFA, the assessment
process in the SUNSET final rule is an overly burdensome and
unnecessary means of identifying rules that have or will have a
SEISNOSE. In fact, as discussed in more detail below, we now question
whether the assessment process is a reasonable exercise of the
Department's discretion in light of the purpose and language of the
RFA. As noted by one commenter, based on the Department's assumptions
in the RIA of the SUNSET
[[Page 32260]]
final rule, which are adopted in the RIA of this final rule, only 530,
or approximately 15%, of the Department's rulemakings impose a
SEISNOSE, whereas the SUNSET rule estimates the Department would need
to assess a total of 3,574 rulemakings in order to identify those
rules. The Department continues to believe that, had Congress intended
for section 610 to mandate such a burdensome process for identifying a
minority of rulemakings that have or will have a SEISNOSE, it would
have said so explicitly. See Whitman v. Am. Trucking Ass'ns, 531 U.S.
457, 468 (2001) (Congress ``does not[ ] . . . hide elephants in mouse
holes''). Moreover, as explained in Section V.C.2 of this rule and the
Withdrawal NPRM, conducting assessments of all HHS rules is not the
only available means of identifying rules with a SEISNOSE, as
commenters have identified numerous more targeted, efficient, and
effective alternatives for identifying regulations that have or will
have a SEISNOSE. We further note that, although the RFA applies across
numerous government agencies, HHS is not aware of any department or
agency issuing a similar sunset regulation or any litigation asserting
that any department or agency, including HHS, has violated the RFA by
failing to implement a rule like the SUNSET final rule.
Moreover, as explained in the Withdrawal NPRM, principles of
statutory construction do not support broadly interpreting section 610
to require agencies to simultaneously consider all regulations and do
so on a recurring basis to determine whether they have or will have a
SEISNOSE. Section 610(a) mandates that agencies publish a plan
providing for a one-time simultaneous reexamination of regulations that
have or will have a SEISNOSE. Had Congress intended for this plan to
provide for simultaneous review that applies more broadly to all
regulations and on a recurring basis, it would have said so. See, e.g.,
Salinas v. U.S. R.R. Retirement Bd., 141 S. Ct. 691, 698 (2021)
(quoting Russello v. United States, 464 U.S. 16, 23 (1983) (``Where
Congress includes particular language in one section of a statute but
omits it in another section of the same Act, it is generally presumed
that Congress acts intentionally and purposely in the disparate
inclusion or exclusion.'')).
The Department also agrees with commenters that the SUNSET final
rule's automatic expiration provision--providing for the automatic
expiration of any rule issued by the Department if it is not timely
assessed or, as applicable, reviewed--exceeds the express requirements
of the RFA. As explained in the Withdrawal NPRM, section 610 neither
provides for automatic expiration of rules nor presumptively applies
automatic expiration dates to regulations. Rather, it merely
contemplates rescission or revision of rules, through the standard
notice and comment rulemaking processes, only if they have or will have
a SEISNOSE and if the Department has determined, based on its review of
the factors set forth in section 610, that such rules should be
rescinded or revised to minimize any SEISNOSE. We also note that
section 608(b) of the RFA explicitly provides: ``If the agency has not
prepared a final regulatory analysis pursuant to section 604 of this
title within one hundred and eighty days from the date of publication
of the final, such rule shall lapse and have no effect.'' The absence
of any similar language in the RFA requiring rules to automatically
lapse if an agency fails to comply with section 610 suggests that
Congress did not intend for noncompliance with section 610 to have such
an effect. See, e.g., Salinas, 141 S. Ct. at 698.
The Department also notes that other requirements in the SUNSET
final rule extend beyond the express requirements in the RFA. For
example, the SUNSET final rule's requirements for public notice and
comment procedures with respect to assessments--such as publishing in
the Federal Register a notice within a month of commencing an
assessment as well as a notice of the results of all assessments--
extend beyond section 610's notice and comment requirements. Although
section 610 requires notice and comment procedures for retrospective
review of rules which have or will have SEISNOSE,\14\ it does not
require notice and comment procedures for the Department's
determinations of which regulations have or will have a SEISNOSE.
Additionally, the SUNSET final rule's expedited five-year timeline for
the completion of certain reviews and two-year timeline for amending or
rescinding regulations following such reviews go beyond the express
requirements of section 610(a), which contemplate only that reviews of
rules under that section be conducted ``within ten years'' of specific
dates.\15\
---------------------------------------------------------------------------
\14\ See 5 U.S.C. 610(c) (requiring agencies to publish in the
Federal Register a list of rules to be reviewed during the
succeeding twelve months as well as invite public comment on rules
to be reviewed).
\15\ We note that, as discussed in Section V.D, expanding these
timeframes would not resolve the myriad of problems with the SUNSET
final rule discussed throughout this preamble, such as the burdens,
confusion, and uncertainty imposed on stakeholders.
---------------------------------------------------------------------------
Additionally, the Department agrees with commenters that the
automatic expiration provision and other requirements imposed by the
SUNSET rule otherwise lack support in the language and purpose of the
RFA. For the reasons already explained, the RFA does not explicitly
impose or authorize these requirements. Moreover, as explained in the
Withdrawal NPRM, these requirements appear to be inconsistent with the
intent and purpose of the RFA as expressed in the statute's language
and legislative history. Specifically, the automatic expiration
provision--by providing for the automatic expiration of rules without
consideration of the impact of the rules on small entities or the
statutory objectives the rule implements--appears to be inconsistent
with the RFA's intent to balance the objectives of the RFA with the
objectives of statutes critical to public health. Congress expressed
this intent in the language of section 610(a) itself, which
contemplates the rescission of rules only if ``consistent with the
stated objectives of applicable statutes'' and if the agency has
determined that that the rule should be rescinded ``to minimize any
significant economic impact of the rules upon a substantial number of .
. . small entities.'' The RFA's legislative history further expresses
this intent, stating that Congress did not intend for the RFA's
requirements to ``undermine . . . important [regulatory]
achievements,'' specifically those in the area of public health. 126
Cong. Rec. 21,448, 21,451 (August 6, 1980) (statement of Sen. Culver,
sponsor of S. 299, which was ultimately enacted as amended as the RFA);
see also S. Rep. 96-878 (1980) (``The Committee is emphatically opposed
to any weakening of the legislatively mandated goals of federal
regulation in the name of cost reduction. The bill clearly stipulates
that there is to be no loss of regulatory goals. The language states
that agencies shall seek and consider alternative proposals to the
proposed rule `consistent with the stated objectives of applicable
statutes.''). Rather, Congress intended that ``agencies . . . continue
to enforce [substantive] laws in a fully effective fashion,'' id., and
that ``environmental, health or safety catastrophes must never be made
more likely because of flexible regulations,'' id. at 21,455
(Description of Major Issues and Section-by-Section Analysis of
Substitute for S. 299).
In addition to the automatic expiration provision, other SUNSET
final rule requirements exceeding the express requirements of section
610
[[Page 32261]]
appear inconsistent with the RFA's intent. As explained previously in
this preamble and in the Withdrawal NPRM, compliance with the SUNSET
final rule's requirement to assess thousands of regulations within
certain timeframes would require the agency to divert resources from
the Department's significant public health objectives and potentially
impair its ability to achieve those objectives. The RFA's legislative
history indicates that such a burden imposed by assessments would be
contrary to Congress's intent that ``regulatory flexibility legislation
[not] undermine . . . important [regulatory] achievements.'' 126 Cong.
Rec. 21,451 (statement of Sen. Culver); see also id. at 21,455
(Description of Major Issues and Section-by-Section Analysis of
Substitute for S. 299) (addressing concerns that the RFA ``might
require agencies to significantly compromise the objectives of
underlying statutes authorizing rulemaking''). Such burdens on the
Department's ability to achieve important statutory objectives related
to public health also appear inconsistent with the RFA's intent to
enhance administrative efficiency in the achievement of such
objectives. See 126 Cong. Rec. 21,456 (Description of Major Issues and
Section-by-Section Analysis of Substitute for S. 299) (emphasizing that
``regulatory flexibility should be considered a means of improving
administrative effectiveness in enforcing the regulatory statutes which
the Congress has enacted rather than an additional bureaucratic
burden''); see also S. Rep. 96-878 (stating that S. 299's findings
include ``that reasonable alternative rules and regulations could be
developed . . . without a significant loss of regulatory efficiency'').
Furthermore, the SUNSET final rule's requirements exceeding the
express requirements of section 610 also appear to be inconsistent with
the RFA's purpose of alleviating the regulatory burden on small
entities. See, e.g., 126 Cong. Rec. 21,449 (Description of Major Issues
and Section-by-Section Analysis of Substitute for S. 299) (explaining
that the RFA seeks to address the ``unnecessary and disproportionately
burdensome demands . . . [of uniform regulatory requirements] upon
small [entities] . . . with limited resources''). As discussed in
Section V.A and V.B of this preamble, the regulatory uncertainty
created by the sudden expiration and threat of sudden expiration of
regulations would disproportionately burden small entities who rely on
regulations to level the playing field and lack the resources to
successfully navigate a confusing regulatory landscape. See 126 Cong.
Rec. 21,453 (Description of Major Issues and Section-by-Section
Analysis of Substitute for S. 299) (finding that small entities often
have limited access to regulatory expertise and capital as compared to
larger businesses). Additionally, the scope of and compressed timelines
for the assessments required by the SUNSET final rule would undermine
small entities' ability to provide input and data and otherwise
participate in the assessment and review process, as well as undermine
the Department's ability to meaningfully consider such information.
Such a result would be inconsistent with the RFA's intent to ``give
small businesses a greater opportunity to participate in shaping rules
which would affect them.'' 126 Cong. Rec. 21,451 (statement of Sen.
Culver). This result would also undermine the quality of the
Department's reviews and, therefore, the Department's ability to
accomplish the purpose of retrospective reviews as stated in section
610(a), which is ``to minimize any significant economic impact of the
rules upon a substantial number of such small entities.''
For these reasons, the Department agrees with the commenters that
the SUNSET final rule's requirements exceed the express requirements of
the RFA and appear to be inconsistent with the intent and purpose of
the RFA as expressed in the statute's language and legislative history,
as well as case law interpreting the statute. We recognize that we
previously took the position, in the SUNSET final rule, that the ``rule
does not impose any additional burden on the Department beyond what was
already called for in the RFA,'' 86 FR 5705, but after further
considering the RFA and its legislative history, we now consider that
prior position erroneous.
Comment: Several commenters asserted that the SUNSET final rule,
including its automatic expiration provision, is consistent with
section 610 of the RFA. One commenter stated that the SUNSET rule
accomplishes nothing new, different from, or contrary to the RFA
because the RFA expressly contemplates rule rescission as one of the
outcomes of retrospective review, and the SUNSET rule's automatic
expiration provision preserves rule rescission as one of the options
available to HHS upon completion (or not) of retrospective review under
the RFA. Another commenter claimed that a 10-year automatic expiration
provision seems entirely appropriate and consistent with the RFA's
Congressional intent based on the view that the RFA already requires
HHS to conduct 10-year reviews under section 610. Another commenter
stated that the SUNSET rule is consistent with section 610 because it
simply establishes an enforcement mechanism for that section. One
commenter questioned the Department's conclusion that the SUNSET final
rule's assessment requirement goes beyond the requirements of section
610 and states that the Department must assess rules to determine
whether a rule has or will have a SEISNOSE under section 610. The
commenter also noted that assessments of rules not previously
identified as having a SEISNOSE would impose a ``minimal burden''
because ``[i]t is likely that most of th[ose] . . . regulations would
remain'' without a SEISNOSE and therefore ``only a simple assessment of
these rules would be necessary.''
Response: The Department disagrees with the commenters that the
SUNSET final rule, including the automatic expiration provision, is no
different from and consistent with the RFA, for the reasons already
explained in the prior comment response.
Specifically, with respect to the automatic expiration provision,
the RFA contains no explicit or implicit authority for an automatic
expiration provision, and such a provision is inconsistent with the
RFA's intent and purpose. Thus, the Department disagrees with the
commenter that the automatic expiration provision is not different from
or inconsistent with the requirements in the RFA. Although section 610
of the RFA does contemplate rule rescission as a potential outcome of
retrospective review, it contemplates rescission of rules only through
the standard notice-and-comment process. Furthermore, that outcome
would apply only to rules that have or will have a SEISNOSE and for
which the agency has conducted a review considering the factors set
forth in section 610 and has determined, in its discretion and based on
the results of the review, whether the rule at issue ``should be
amended or rescinded, consistent with the stated objectives of
applicable statutes, to minimize any significant economic impact of the
rules upon a substantial number of such small entities.'' 5 U.S.C.
610(a). In contrast, the automatic expiration provision explicitly
mandates automatic rescission of any rule, regardless of whether it has
or will have a SEISNOSE, not based on the agency's consideration of the
relevant statutory factors or the potential for rescission to minimize
SEISNOSE, but simply based on the agency's failure to conduct an
assessment or review of the rule within certain timeframes. Therefore,
the
[[Page 32262]]
commenter is incorrect that the automatic expiration provision can be
equated to or is consistent with the rescission of rules under the RFA.
Furthermore, as explained above, section 608(b) of the RFA explicitly
requires rules to automatically ``lapse and have no effect'' if the
agency fails to timely prepare a final regulatory analysis pursuant to
section 604, and the absence of any similar language in the RFA
requiring rules to automatically lapse if an agency fails to comply
with section 610 suggests that Congress did not intend for
noncompliance with section 610 to have such an effect. See, e.g.,
Salinas, 141 S. Ct. at 698.
The Department also disagrees with commenters that the SUNSET final
rule's automatic expiration provision is consistent with section 610
because that section already requires agencies to conduct 10-year
reviews or because the rule simply provides an enforcement mechanism
for section 610's review requirements. As already explained in the
prior comment response, the SUNSET final rule's requirement that
agencies assess thousands of rules without a SEISNOSE, in some cases
within an expedited five-year timeframe, exceeds the express
requirements of section 610. Therefore, by mandating automatic
expiration of rules without a SEISNOSE when the Department fails to
timely assess them, the rule's automatic expiration provision does not
seek to enforce only the requirements of section 610 but also
requirements not expressly imposed by that section. Moreover, the
Department notes that section 611(a) of the RFA already provides a
remedy for agency noncompliance with section 610: Judicial review of
such noncompliance and any relief deemed appropriate by the reviewing
court.
Additionally, the Department disagrees with the comment that the
SUNSET final rule's assessment requirement is necessary under or
consistent with section 610. Indeed, HHS is not aware of any other
Federal department or agency implementing a rule similar to the SUNSET
final rule. As explained in the previous comment response, although
section 610 implicitly contemplates that agencies have some means of
identifying rules with a SEISNOSE for retrospective review, it does not
require agencies to conduct ``assessments'' of every rule and comply
with the notice and comment requirements for such assessments. Rather,
it is silent with respect to how agencies identify rules with SEISNOSE
for review. This indicates that Congress intended to leave these
determinations to agencies' discretion, see Fisher, 994 F.3d at 671,
and the Department, in its discretion, has now determined that the
assessment process in the SUNSET final rule is overly burdensome and
unnecessary for making such determinations.
Moreover, the commenter's suggestion that assessments would impose
a ``minimal burden'' is not persuasive. The only support the commenter
cited for this assertion is its speculation that assessments of rules
previously identified as not having a SEISNOSE would be ``simple''
because ``[i]t is likely that most of th[ose] . . . regulations would
remain'' without a SEISNOSE. However, even if the commenter is correct
that such rules are likely to remain without a SEISNOSE, the SUNSET
final rule would still require the Department to assess them to
determine whether that is the case, and in doing so, the Department
would need to examine any relevant experience with the rule since its
promulgation. Furthermore, the commenter failed to acknowledge that
even assessments that are potentially more straightforward than others
would still be subject to the extensive requirements the SUNSET final
rule imposes on every assessment, including requirements for announcing
the assessment on the website and in the Federal Register, opening a
public docket, considering comments to the docket, and publishing the
full results in the Federal Register. Given these requirements, the
Department does not agree with the commenter that any assessment under
the SUNSET final rule would be ``simple'' or that the assessment
process as a whole would impose a ``minimal burden.''
2. HHS Compliance With the RFA
Comment: Several commenters contended that withdrawal of the SUNSET
final rule violates the RFA because, without the rule, the Department
would not comply with section 610. These commenters asserted that HHS
historically has not complied with section 610, and withdrawal of the
rule would allow the Department to continue its noncompliance. Some of
these commenters maintained that the SUNSET final rule is HHS's current
``plan'' for periodic review under section 610(a), and therefore
repealing it will leave HHS without the required plan. One commenter
asserted that HHS cannot repeal the SUNSET final rule because section
610 allows agencies only to ``amend'' their plans for retrospective
review. Another commenter asserted that HHS has failed each year to
``publish in the Federal Register a list of the rules . . . which are
to be reviewed pursuant to . . . section [610] during the succeeding
twelve months'' under section 610(c). The commenters also claimed that
the RFA requires (``shall provide for'') that HHS conduct the
retrospective reviews identified in section 610 on the timelines
provided for in that section, and that HHS has not adequately conducted
such reviews.
Response: We disagree with these commenters' assessments of the
history of the Department's compliance with the RFA and predictions
about the Department's future plans with respect to the RFA. As noted
by commenters, section 610 requires agencies to: Publish in the Federal
Register a plan for the periodic review of the rules issued by the
agency which have or will have a SEISNOSE; and each year publish in the
Federal Register a list of the rules which have a SEISNOSE and are to
be reviewed pursuant to section 610 during the succeeding twelve
months. HHS has complied with these requirements.
First, following the enactment of the RFA, on July 14, 1981, the
Department published in the Federal Register its plan for periodic
review as required by section 610(a).\16\ That plan provides for, among
other things, the Department's review of regulations that have or will
have a SEISNOSE and identifies processes and principles that guide such
reviews, including principles for prioritizing those reviews.\17\
Accordingly, the Department has had a plan in place since shortly after
the enactment of the RFA. Second, in accordance with that plan and
section 610(c), the Department each year publishes in the Federal
Register a list of the rules with a SEISNOSE that it is reviewing, has
reviewed, or intends to review under section 610, along with a
discussion of the Department's
[[Page 32263]]
commitment to compliance with the requirements and intent of section
610.\18\ As required by section 610(c), this document includes for each
such rule a brief description of the rule, its legal basis, and the
opportunity for public comment.\19\ Therefore, the commenters are
incorrect that withdrawal of the SUNSET final rule would leave the
Department without a plan for the periodic review of rules as required
by section 610(a), or that HHS does not comply with section 610(c). The
commenters have not cited any authority that either of these sections
requires more.\20\
---------------------------------------------------------------------------
\16\ See Notice of Plan for Periodic Review of Rules, 46 FR
36332 (July 14, 1981). We note that FDA simultaneously published in
the Federal Register its own plan for periodic review of its rules
as a supplement to the Department's plan. See Notice, 46 FR 36333
(July 14, 1981) (``This notice supplements the Department plan with
additional information about FDA procedures for reviewing existing
rules.'').
\17\ See, e.g., 46 FR 36332 (``[T]he Department and those staff
divisions which administer rules will inventory and review all
regulations for the purpose of selecting those regulations that
should receive early, in depth review and revision, where necessary,
to reduce regulatory burdens'' and identifying principles to guide
prioritization of review of existing regulations); id. (``[A]gencies
and offices of the Department will seek to identify for earliest
review those regulations for which revision will most advance
[certain] principles,'' including ``[m]inimiz[ing] Federal, State,
local, and private costs'' and ``[p]revent[ing] fraud, abuse, waste,
and inefficiency''); id. (``The Department's semiannual agenda will
advise the public of regulations selected for review''); id. at
36333 (``[I]t is important that to the extent possible the more
costly and burdensome rules by reviewed first'').
\18\ See, e.g., Semiannual Regulatory Agenda, 86 FR 16892 (Mar.
31, 2021) (publishing under the RFA and E.O. 12866 the Department's
``semiannual . . . inventory of rulemaking actions under development
throughout,'' including ``as required by the [RFA] . . . , those
prospective HHS rulemakings likely to have a [SEISNOSE],''
``offering for public review summarized information about
forthcoming regulatory actions the Department,'' and describing and
identifying examples of the Department's ``agency-wide effort to
support the [Regulatory] Agenda's purpose of encouraging more
effective public participation in the regulatory process'').
\19\ See, e.g., id. The Department also submits this information
regarding rules it has identified for periodic review under section
610 in its submissions to the Unified Agenda. One commenter
maintained that these Unified Agenda submissions cannot satisfy
section 610 because they are not published in the Federal Register
and they are not contained in a single document. However, as
explained above, the Department publishes information satisfying
section 610 in the Federal Register as a single document. See, e.g.,
Regulatory Information Service Center, Introduction to the Unified
Agenda of Regulatory and Deregulatory Actions--Fall 2021, 87 FR
5002, 5009 (Jan. 31. 2022).
\20\ Congress considered and rejected a provision included in an
earlier version of the bill that would have supported the
commenter's position. See 46 FR 21449 (section 5(a) of S. 299, which
was amended before being enacted as the RFA, included the following:
``Each agency shall periodically review its rules and regulations in
accordance with the schedule and criteria set forth in its published
plan.'').
---------------------------------------------------------------------------
The Department also disagrees with the commenter that it cannot
repeal the SUNSET final rule because section 610 permits agencies to
only ``amend[]'' their plans for retrospective review. However, the
language the commenter cites--``[s]uch plan may be amended by the
agency at any time,'' 5 U.S.C. 610(a)--is a broad grant of authority to
agencies with respect to amending their plans for retrospective review,
not a limitation. See, e.g., Adirondack Med. Ctr. v. Sebelius, 740 F.3d
692, 698 (D.C. Cir. 2014) (``Congress generally knows how to use the
word `only' when drafting laws.''). This interpretation of section
610(a) is also consistent with Congress's intent as expressed in the
remaining language of that provision, which sets forth the general
requirement that agencies publish plans for retrospective review but
does not further specify how agencies develop and implement those
plans. Such language stands in stark contrast to section 610(b), which
explicitly imposes specific requirements on agencies' retrospective
reviews. See Fisher, 994 F.3d at 671 (``In an administrative setting, .
. . `the contrast between Congress' mandate in one context with its
silence in another suggests not a prohibition but simply a decision not
to mandate any solution in the second context, i.e., to leave the
question to agency discretion.' '').
We also disagree with the assertion in the comments that the SUNSET
final rule is HHS's current ``plan.'' As described above, HHS has had a
retrospective review plan in place since 1981, which was unacknowledged
in the SUNSET final rule. Under that plan, among other things, the
Department reviews regulations that have or will have a SEISNOSE and
identifies processes and principles that guide such reviews, including
principles for prioritizing those reviews. Because the SUNSET final
rule never became effective, the Department has never implemented the
SUNSET final rule as its retrospective review plan. Instead, HHS's
longstanding plan remains operative.
Furthermore, as discussed in the Withdrawal NPRM and as noted by
the commenters to that proposal, the Department has a meaningful track
record of retrospective regulatory review. HHS conducts retrospective
reviews of its regulations with impacts on small entities and publishes
notice of the reviews in the Federal Register. Additionally, as
acknowledged in the SUNSET final rule, the Department in 2016 and 2019
issued final rules resulting from section 610 reviews updating the
requirements of participation in the Medicare and Medicaid programs for
hospitals and critical access hospitals \21\ and long-term care
facilities.\22\ These rulemakings, among other things, allowed these
entities greater flexibility in meeting the requirements and eliminated
unnecessary, obsolete, or overly burdensome requirements.\23\
---------------------------------------------------------------------------
\21\ See Medicare and Medicaid Programs; Regulatory Provisions
to Promote Program Efficiency, Transparency, and Burden Reduction;
Fire Safety Requirements for Certain Dialysis Facilities; Hospital
and Critical Access Hospital (CAH) Changes to Promote Innovation,
Flexibility, and Improvement in Patient Care, 84 FR 51732 (Sept. 30,
2019) (RIN 0938-AT23); see also Semiannual Regulatory Agenda, 84 FR
29633 (June 24, 2019) (merged with 0938-AT23).
\22\ See Medicare and Medicaid Programs; Reform of Requirements
for Long-Term Care Facilities, 81 FR 68688 (Oct. 4, 2016); see also
Regulatory Agenda, 81 FR 94754 (Dec. 23, 2016) (0938-AR61).
\23\ See, e.g., Medicare and Medicaid Programs; Regulatory
Provisions to Promote Program Efficiency, Transparency, and Burden
Reduction; Fire Safety Requirements for Certain Dialysis Facilities;
Hospital and Critical Access Hospital (CAH) Changes to Promote
Innovation, Flexibility, andImprovement in Patient Care, 84 FR 51732
(Sept. 30, 2019).
---------------------------------------------------------------------------
As described in the Withdrawal NPRM and as noted by commenters to
that proposal, the Department also has undertaken several other recent
and significant retrospective regulatory review efforts. Several
commenters noted the 2015 CMS initiative to modernize Medicaid Managed
Care regulations for Medicaid and CHIP beneficiaries, and we also noted
in the Withdrawal NPRM that the CMS Office of Burden Reduction and
Health Informatics works to eliminate over-burdensome and unnecessary
regulations. Commenters additionally noted that the Department's 2011
Plan for Retrospective Review of Existing Rules,\24\ an initiative
developed in accordance with E.O. 13563 and E.O. 13610, and plans the
Department subsequently published from Fiscal Year 2012 through 2016,
have served as a framework for its retrospective review of existing
regulations. Under these plans, the Department identified rules that
could be potentially eliminated as obsolete, unnecessary, burdensome,
or counterproductive or that could be modified to be more effective,
efficient, flexible, and streamlined. Additionally, as noted in the
Withdrawal NPRM, the Department, in response to E.O. 13771, ``Enforcing
the Regulatory Reform Agenda,'' established a Regulatory Reform Task
Force that oversaw an effort to evaluate existing regulations and make
recommendations to the Secretary regarding their repeal, replacement,
or modification, consistent with applicable law. While this E.O. has
since been revoked, the published summary reports of these reviews for
Fiscal Years 2018-2020 are available on the HHS website.\25\
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\24\ Improving Regulation and Regulatory Review, 76 FR 3821
(Jan. 21, 2011).
\25\ FY 2021 Annual Performance Plan and Report--Regulatory
Reform, HHS, <a href="https://www.hhs.gov/about/budget/fy2021/performance/regulatory-reform/index.html">https://www.hhs.gov/about/budget/fy2021/performance/regulatory-reform/index.html</a>.
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Also noted in the Withdrawal NPRM, numerous additional regulatory
efforts by HHS routinely involve the review of regulations. The
Department provides technical assistance to Congress on proposed
legislation, which quite often requires an assessment of the proposal's
impact on current regulations. FDA also reviews regulations in
responding to certain citizen petitions submitted
[[Page 32264]]
under 21 CFR 10.30, requesting changes in FDA regulations.
Additionally, it is common for new HHS regulations to amend, revise, or
modify sections of regulations in order to update, replace, or rescind
requirements, or to add new definitions or clarifications, which
inherently entails review of these sections.\26\ As another example,
regulations are reviewed to determine if guidance documents are needed
to provide recommendations for complying with the regulation, which is
particularly important when the regulation is necessarily general or
broad to accommodate scientific and other innovation changes, and
guidance is helpful to consider applicability of the regulatory
provisions.
---------------------------------------------------------------------------
\26\ For example, the regulations FDA issued to implement FSMA
included both the addition of new sections of regulation and
revisions and modifications to existing sections. See FSMA Rules &
Guidance for Industry (available at <a href="https://www.fda.gov/food/food-safety-modernization-act-fsma/fsma-rules-guidance-industry#Rules">https://www.fda.gov/food/food-safety-modernization-act-fsma/fsma-rules-guidance-industry#Rules</a>).
---------------------------------------------------------------------------
All of these initiatives demonstrate HHS's commitment to reviewing
its regulations. Thus, the suggestion in the comments that HHS will not
adequately conduct periodic review under section 610 of the RFA moving
forward absent the rule is groundless and speculative. HHS is committed
to effective and appropriate retrospective review of its regulations
and looks forward to exploring ways to improve its processes through
means other than binding regulations.
Accordingly, the Department believes that the SUNSET rule is not
necessary to ensure its compliance with section 610 and that its
ability to undertake regulatory review efforts in the future would be
undermined by complying with the unnecessary and burdensome
requirements of the SUNSET final rule.
Comment: Several comments asserted that HHS has essentially
admitted in the SUNSET final rule that, absent the rule, it does not
otherwise comply with the RFA. One comment asserted that HHS admitted
in the SUNSET final rule that ``all prior plans'' for retrospective
review did not meet the requirement to publish a plan under section 610
``because each prior plan hopelessly failed to provide for any review
of each regulation within ten years, if ever.'' The comment also cited
the following statements in the SUNSET final rule: HHS has had
``limited success in performing retrospective regulatory review,'' 86
FR 5738; ``the Department's efforts to comply with 5 U.S.C. 610 have at
times been lacking,'' id. at 5696; and ``The Department's experience
over the last forty years is that, absent a strong incentive such as
the potential expiration of a regulation, the Department will not
review an adequate number of its regulations,'' id. at 5739. Another
comment asserted that HHS admitted that many of its rules have remained
untouched for years. Two of these comments questioned the Withdrawal
NPRM's assertion that many rules have remained untouched because they
work as intended, asserting that the Withdrawal NPRM does not provide
evidence to support this assertion. One comment asserted that if a rule
finalized in the 1980s or 1990s is working as intended, that means it
is likely out of date because rule's drafters could not have envisioned
the technological and informational improvements that have taken place
since the rule's promulgation.
Response: The Department disagrees with the comments that the
SUNSET final rule concluded or demonstrated that HHS does not comply
with the RFA absent that rule, but, to the extent that the SUNSET final
rule is understood to convey that conclusion, we now think that
conclusion is wrong. First, the SUNSET final rule does not state that
``all prior plans'' for the Department's retrospective review do not
satisfy section 610(a), nor could it. For example, as explained in a
prior comment response, the Department in 1981 published in the Federal
Register a plan for retrospective review that directly responds to the
requirements under the RFA and provides for the Department's periodic
review of regulations that have or will have a SEISNOSE.\27\ Thus, HHS
fulfilled section 610(a)'s ``plan'' requirement long before the
promulgation of the SUNSET final rule. Notably, the SUNSET final rule
does not even refer to this plan, let alone assert that it does not
satisfy section 610(a)'s requirements.
---------------------------------------------------------------------------
\27\ See Notice of Plan for Periodic Review of Rules, 46 FR
36332 (July 14, 1981).
---------------------------------------------------------------------------
Second, neither the statements from the SUNSET final rule cited by
the comments, nor the evidence cited for those statements, establish
noncompliance or support the comments' conclusion that HHS does not
otherwise comply with the RFA. For example, the SUNSET final rule's
statement that the Department has had ``limited success in performing
retrospective regulatory review'' does not assert that the Department
does not comply with section 610 specifically. As the SUNSET final rule
shows, the Department under the previous administration expressed the
policy position that extensive retrospective review, across the
Department's entire regulatory portfolio, was appropriate and should be
prioritized above other Department priorities; its statements of
``limited success,'' ``lacking'' efforts, and ``adequate'' review must
be understood in the context of these prior expectations and priorities
rather than compliance with the RFA. Furthermore, the evidence the
Department cited as support also does not specifically pertain to the
Department's section 610 reviews or necessarily reveal anything about
them. Specifically, this evidence includes: (1) An artificial
intelligence (AI) data analysis of HHS regulations identifying that
``85% of Department regulations created before 1990 have not been
edited; the Department has nearly 300 broken citation references in the
CFR; and there are more than 50 instances of HHS regulatory
requirements to submit paper documents in triplicate or
quadruplicate''; and (2) a 2018 study estimating that 68% of Federal
regulations have never been updated. 86 FR 5710. The SUNSET final rule
does not assert that the HHS regulations identified in this analysis
are regulations with a SEISNOSE subject to section 610, and there
appears to be no reason to assume that is the case. See 86 FR 5710
(acknowledging that AI ``cannot at this time easily determine if a
regulation satisfies the criteria listed in 5 U.S.C. 610''). Indeed,
based on the SUNSET final rule's estimate that only 15% of the
Department's regulations have or will have a SEISNOSE, it is possible
that none of the regulations identified in either study are rules that
have or will have a SEISNOSE. Thus, there appears to be no reason to
conclude that the rules identified as unedited or flawed are rules with
SEISNOSE that should be reviewed under section 610.\28\
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\28\ Commenters to the SUNSET proposed rule also expressed
concern that the methodology of the AI review was never made public,
and the SUNSET final rule confirmed that the ``Department did not
notify the public about this research project.'' 86 FR 5710.
---------------------------------------------------------------------------
Another HHS statement cited by the comment--that ``the Department's
efforts to comply with 5 U.S.C. 610 have at times been lacking,'' 86 FR
5696--also does not assert or establish that the Department does not
comply with section 610. The statement merely suggests a belief that,
``at times,'' the Department could have improved its processes for
retrospective review under section 610. It does not explicitly assert
that the Department, then or now, fails to comply with the RFA.
Additionally, like the data discussed above, the data the statement
cites as support does not
[[Page 32265]]
pertain specifically to reviews conducted under section 610.
Specifically, the statement cites the number of retrospective analyses
the Department has conducted in response to E.O. 13563. 86 FR 5696.
However, E.O. 13563, unlike section 610, does not contemplate periodic
review of only rules with a SEISNOSE for the purpose of minimizing
SEISNOSE but instead applies to ``existing significant regulations''
for the purpose of assessing a far broader set of factors not focused
on small entities, including ``whether any such regulations should be
modified, streamlined, expanded, or repealed . . . to make [an]
agency's regulatory program more effective or less burdensome in
achieving the regulatory objectives.'' See Improving Regulation and
Regulatory Review, 76 FR 3821, 3822 (Jan. 18, 2011). Therefore, the
Department's reviews conducted in response to that E.O. do not
necessarily indicate anything about the number of reviews the
Department has conducted or should consider conducting under section
610. The SUNSET final rule itself appears to recognize the limited
value of these data by concluding only that ``[t]hese findings are
consistent with government assessments that the Department's efforts to
comply with 5 U.S.C. 610 have at times been lacking.'' 86 FR 5696
(emphasis added).
The final HHS statement cited by the commenter--``The Department's
experience over the last forty years is that, absent a strong incentive
such as the potential expiration of a regulation, the Department will
not review an adequate number of its regulations''--is equally flawed.
Again, this statement does not explicitly address the adequacy of the
Department's reviews of regulations under section 610 but only
generally refers to ``review . . . of [ ] regulations.'' Moreover, as
explained above, the statement's implication that the Department has
not conducted an ``adequate'' number of reviews must be understood in
the context of the Department's policy position under the previous
administration that extensive retrospective review across its entire
regulatory portfolio was appropriate and should be prioritized above
other agency priorities.
Third, the SUNSET final rule's discussion of the Department's
section 610 compliance and record of retrospective review contains
errors and misstatements. In relying on studies purporting to
demonstrate that HHS's regulations have not been edited or are
otherwise flawed, the SUNSET final rule appears to incorrectly assume
that the age of a regulation and the fact that it has not been edited
for some period of time suggests that the regulation should be and has
not been reviewed under section 610 or pursuant to any of the
Department's numerous regulatory review efforts. See 86 FR 5710
(concluding the AI data ``suggested that large numbers of Department
regulations would benefit from retrospective review''); id. at 5738
(``These findings suggest regulations are not being updated to reflect
evolving economic conditions and technology, even though this is a goal
of the RFA.''). As the Withdrawal NPRM explained, numerous agency
efforts involving the review of regulations do not result in a change
in the regulation. Moreover, section 610(a) explicitly contemplates
unchanged regulations, stating that ``[t]he purpose of the review shall
be to determine whether such rules should be continued without change,
or should be amended or rescinded'' (emphasis added). Also, as noted in
the Withdrawal NPRM, the broken links and other typographical errors
identified through the AI review were successfully addressed as part of
the HHS ``Regulatory Clean-Up Initiative,'' a final rule published on
November 16, 2020, 85 FR 72899, that made miscellaneous corrections,
including correcting references to other regulations, misspellings and
other typographical errors in regulations issued by FDA, CMS, the
Office of the Inspector General, and the ACF. In addition, FDA issued a
final rule to amend regulations on medical device premarket submissions
to remove requirements for paper and multiple copies and replace them
with requirements for a single submission in electronic format.\29\
---------------------------------------------------------------------------
\29\ ``Medical Device Submissions: Amending Premarket
Regulations That Require Multiple Copies and Specify that Paper
Copies To Be Required in Electronic Format,'' 84 FR 68334 (Dec. 16,
2019).
---------------------------------------------------------------------------
The assumption that unedited rules have not been reviewed is
incorrect for the additional reason that many rules setting industry
standards have remained untouched for years, not from neglect, but
because they work as intended. The OMB memo offering guidance to heads
of executive departments and agencies on implementation of E.O. 13563
explicitly states that, in conducting retrospective analysis of
existing rules: ``Agency plans should not, of course, call into
question the value of longstanding agency rules simply because they are
longstanding. Many important rules have been in place for some time.''
\30\ The Withdrawal NPRM points to numerous longstanding regulations
that bring efficiencies to industry by clarifying applicable statutory
obligations, such as food regulations involving nutrition, food
labeling, standards of identity, food ingredients, and color additives.
Furthermore, the Withdrawal NPRM cited comments to the SUNSET proposed
rule confirming that these longstanding regulations create important
efficiencies for regulated industry. By contrast, the commenter offered
no support for its assumption that the age of a rule and the fact that
it has not been edited must mean that it is out of date with respect to
its technological and informational requirements. Moreover, even if
certain of such requirements could be updated to reflect technological
advances, the commenter does not explain why that would necessarily
mean that the rule has or will have a SEISNOSE and should be reviewed
under section 610. To have a SEISNOSE, a rule must have a significant
economic impact on a substantial number of small entities, and the
Department considers a rule to have a SEISNOSE if it has at least a
three percent impact on revenue on at least five percent of small
entities. See, e.g., 86 FR 5749. Again, based on the SUNSET final
rule's estimates, only 15% of the Department's regulations have a
SEISNOSE, 86 FR 5737, which suggests that many, or potentially all, of
the regulations the commenter claims have outdated technological
requirements are not regulations with SEISNOSE subject to section 610
review.
---------------------------------------------------------------------------
\30\ OMB Memorandum M-11-10, ``Executive Order 13563, `Improving
Regulation and Regulatory Review' '' (Feb. 2, 2011) (available at
<a href="https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/memoranda/2011/m11-10.pdf">https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/memoranda/2011/m11-10.pdf</a>).
---------------------------------------------------------------------------
The SUNSET final rule made similar errors with respect to other
data it cited in its discussion of the Department's RFA compliance and
record of retrospective review. Specifically, the SUNSET final rule
cited a review of HHS's entries in the semiannual Unified Agenda over
the last ten years, which identified three entries for final
rulemakings resulting from section 610 reviews. See 86 FR 5737. Based
on these data, the SUNSET final rule suggested that, during that ten-
year time period, the Department conducted section 610 reviews of only
26 of its 370 rulemakings previously determined to have a SEISNOSE. See
id. at 5737-38 (referring to ``lax compliance with periodic review
requirements under the . . . [ ]RFA[ ]''). However, in drawing this
conclusion, the SUNSET final rule appears to improperly assume that the
three final rulemakings resulting in section 610 reviews (which it
estimated
[[Page 32266]]
amended CFR sections equivalent to approximately 26 rulemakings)
represented the only section 610 reviews conducted by the Department
during this ten-year time period. See id. at 5737 n.213. In so
concluding, the SUNSET final rule again relied on the flawed assumption
that a section 610 review must result in the amendment of a rule or a
new rule, and thus excluded all other section 610 reviews indicated in
the Unified Agenda during that time period. As a result of that
exclusion, the Department incorrectly assessed the scope of rulemakings
the Department reviewed under section 610 during the last ten years.
The SUNSET final rule's discussion of the Department's RFA
compliance also contains misstatements and other errors. The SUNSET
final rule cited three ``examples of regulations that [commenters] and/
or Congress have requested the Department to review, but that the
commenters claimed were not reviewed.'' 86 FR 5696. Although the SUNSET
final rule did not take a firm position on the status of these
examples, the implication that these matters are inactive is factually
incorrect. For example, the Fall 2021 Unified Agenda includes planned
action to harmonize the differences between the Basic HHS Policy for
the Protection of Human Research Subjects (45 CFR part 46, subpart A)
and the FDA regulations for the protection of human subjects (21 CFR
parts 50 and 56).\31\ The Fall 2021 Unified Agenda also includes
several planned regulatory actions by FDA's Center for Veterinary
Medicine (CVM) to revise \32\ and in certain instances withdraw several
regulations based, in part, on the comments received in dockets issued
in 2017 seeking comments and information from interested parties to
help FDA identify existing regulations and related paperwork
requirements that could be modified, repealed, or replaced, consistent
with the law, to achieve meaningful burden reduction while allowing us
to achieve our public health mission and fulfill statutory obligations.
In addition, CMS revised the Medicare Beneficiary Program Manual
(MBPM), in accordance with the national settlement agreement in the
Jimmo v. Sebelius litigation.\33\ Moreover, the SUNSET final rule did
not assert that these regulations have or will have a SEISNOSE, or even
that the commenters or Congress asserted that they do, and thus, the
rule failed to demonstrate how, if at all, these examples implicate the
Department's retrospective review efforts under section 610.
---------------------------------------------------------------------------
\31\ See Protection of Human Subjects and Institutional Review
Boards, RIN 0910-A107 (Fall 2021) (available at <a href="https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI07">https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI07</a>).
\32\ See, e.g., Current Good Manufacturing Practice, Hazard
Analysis, and Risk-Based Preventive Controls for Food for Animals,
RIN 0910-AI24 (Fall 2021) (available at <a href="https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI24">https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI24</a>); Phased Review
of New Animal Drug Applications, Electronic Submission, and Master
Files, RIN 0910-A135 (Fall 2021) (available at <a href="https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI35">https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI35</a>); Revision of Requirements for the Establishment and
Maintenance of Records Related to Medicated Animal Feed and
Veterinary Feed Directive Drugs Office of Information and Regulatory
Affairs, RIN: 0190-AI67 (Fall 2021) (available at <a href="https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI67">https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI67</a>).
\33\ See Medicare Beneficiary Policy Manual, Chapters 7 (Home
Health), 8 (Skilled Nursing Facilities) and 15 (Outpatient Therapy)
(available at <a href="https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs-Items/CMS012673">https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs-Items/CMS012673</a>). We note that
the SUNSET final rule referred to a comment stating that regulations
covering access to skilled therapy services had not been updated to
reflect the national settlement in Jimmo v. Sebelius. See 86 FR
5696. However, the settlement agreement requires HHS to amend the
Medicare Benefit Policy Manual to clarify the coverage standards,
not to amend Medicare regulations. See ``IX. Injunctive Provisions''
in Settlement Agreement, at 8-14 (available at <a href="https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Jimmo-Settlement-Agreement.pdf">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Jimmo-Settlement-Agreement.pdf</a>).
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The remaining data cited in the SUNSET final rule's discussion of
the Department's RFA compliance lacks relevance to that discussion. For
example, the SUNSET final rule asserted that good governance
stewardship actions were deprioritized and relegated to ``rainy day''
activities the Department operating divisions would get to when they
could, citing a review conducted in 2019 that entailed an AI data
analysis of HHS regulations. 86 FR 5697. As already discussed in this
response, the AI review results do not indicate whether any of the
rules it identified as not updated or otherwise flawed have or will
have a SEISNOSE, and thus the rule fails to demonstrate how, if at all,
this review implicates the Department's activities under section 610.
Furthermore, as noted above, the broken links and other typographical
errors identified through the AI review process were successfully
addressed as part of the HHS ``Regulatory Clean-Up Initiative.'' As
another example, the SUNSET final rule also cited ``government
assessments that the Department's efforts to comply with 5 U.S.C. 610
have at times been lacking,'' 86 FR 5696; however, these sources at
most indicate at times in the past the Department could have reviewed
more rules under section 610, and therefore, these sources do not
demonstrate that the Department does not currently comply.\34\
---------------------------------------------------------------------------
\34\ See, e.g., Curtis W. Copeland, Cong. Rsch. Serv., RL32801,
Reexamining Rules: Section 610 of the Regulatory Flexibility Act 8
(2008) (``[I]t would be reasonable to expect that, since [certain
departments] indicated that they intended to issue a large number of
rules each year with a significant effect on small entities, those
same agencies would need to reexamine a large number of rules each
year under Section 610.''); U.S. Accountability Off., GAO/GGD-94-
105, Regulatory Flexibility Act: Status of Agencies' Compliance
(1994) (citing an SBA report from 1983 suggesting potential for
improving the Department's review plan).
---------------------------------------------------------------------------
The SUNSET final rule's discussion of ``[m]achine-learning tools .
. . [that] demonstrate the complexity of Department rules'' similarly
lacks relevance to the Department's compliance with section 610. The
rule cites data showing that the Department's regulations in 2019,
``based on the amount of information contained in text,'' were ``more
complex than a typical Shakespeare play,'' and notes that ``reducing
complexity is another goal of the RFA.'' 86 FR 5738. However, as with
much of the data already discussed, these data do not purport to relate
specifically to rules that have or will have a SEISNOSE, and thus,
again do not necessarily implicate the Department's efforts under
section 610. Moreover, even if these data were specific to regulations
with a SEISNOSE, the Department does not agree with the SUNSET final
rule that these data demonstrate that its regulations are overly
complicated. As the SUNSET final rule itself acknowledges, complexity
in the Department's regulations ``is not . . . surprising given that
the regulations often involve science, engineering, or highly technical
material.'' 86 FR 5738.
Moreover, the Department disagrees that ``the amount of information
in text'' is a reliable proxy for complexity that is unnecessary or
undesirable given that, in the Department's experience, providing more
information in a regulation can often enhance clarity. For example, in
FDA's experience, often in response to a proposed rule, commenters will
request that the agency provide examples in the codified text which can
lengthen the text but clarify the requirements. For example, a good
manufacturing practices rule may require that ``qualified personnel
handle x.'' So, to better explain what constitutes ``qualified
personnel,'' the codified text may include examples such as education,
years of work experience, etc. The examples are general and not
prescriptive so that the regulated entity can exercise flexibility in
determining what is applicable to their industry and their unique
[[Page 32267]]
manufacturing processes. Thus, while the codified text may be longer,
it is not inherently more complex or burdensome.
3. Policy Considerations Related to Retrospective Review
Comment: Some commenters opposed finalizing the Withdrawal NPRM
because, in their view, there is a need for HHS to conduct more
retrospective review. Several commenters asserted that HHS regulations
are outdated. One comment stated that greater retrospective review is
needed because ``the costs of regulations frequently exceed what was
projected at the time of promulgation,'' citing information from the
preamble to the SUNSET final rule. Another comment stated that there is
an ``overall lack of an evidentiary basis for many of [HHS's]
regulations'' and cited a working paper \35\ criticizing the
Department's retrospective review and HHS regulations' identification
of a problem that would be solved by the regulation. Several comments
stated that widespread retrospective review is appropriate because, if
the public must comply with HHS regulations, HHS should have to review
them. Approximately ten identical anonymous comments stated that the
Withdrawal NPRM should not be finalized because withdrawal or repeal of
the SUNSET final rule would ensure Americans continue to be subject to
costly, burdensome regulations and, before adding additional burdens on
the American people, HHS should determine if its existing regulations
are helping or harming them.
---------------------------------------------------------------------------
\35\ Ellig, Jerry, ``Evaluating the Quality and Use of
Regulatory Impact Analysis: The Mercatus Center's Regulatory Report
Card 2008-2013'' Mercatus Center at George Mason University (July
2016) (available at <a href="https://www.mercatus.org/publications/regulation/evaluating-quality-and-use-regulatory-impact-analysis">https://www.mercatus.org/publications/regulation/evaluating-quality-and-use-regulatory-impact-analysis</a>).
---------------------------------------------------------------------------
Response: HHS does not agree that the SUNSET final rule should be
retained for any of the reasons cited by commenters. First, even
assuming that HHS would benefit from more retrospective review, none of
these comments explain why the onerous procedures and compressed
timeframes of the SUNSET final rule are necessary or desirable to
achieve that goal. Upon review, HHS believes that the procedures set
forth in the SUNSET final rule would be a poor method for achieving the
goal of improved regulations through retrospective review because the
pressure created by the SUNSET final rule process would undermine the
quality of the Department's reviews. The SUNSET final rule's focus on
small-entity impacts also does not seem directly responsive to these
calls for large-scale reconsideration of HHS regulations.
Second, HHS does not agree that the commenters have demonstrated a
need for widespread retrospective review. For example, HHS disagrees
with the general proposition that its regulations are outdated. The
only evidence offered to support these assertions is the evidence
presented in the SUNSET final rule, which is discussed in the previous
comment response. For example, commenters cited the fact that many HHS
regulations issued prior to 1990 have not been edited. But that fact
does not show that edits are needed, and it certainly does not show
that the underlying policies of those regulations are flawed or that
the regulations have impacts that should be reassessed. Similarly, the
fact that broken links or typographical errors may exist in HHS
regulations does not stand for a broader proposition that the
underlying policies or impact analyses in the regulations are outdated.
Nor is automatic expiration of a regulation an appropriate response to
broken links or typographical errors in that regulation. Overall, HHS
rejects the conclusion that our regulations are generally ``outdated''
because, as discussed throughout this preamble, we review regulations
under many processes, regularly engage with stakeholders regarding the
effects of our regulations, and craft regulations to be flexible and to
account for technological advancement and changed circumstances over
time.
HHS has also reconsidered the evidence presented in the SUNSET
final rule concerning cost-benefit projections at the time of
promulgation, and we now determine that it is of limited, if any,
relevance to HHS. In particular, in order to reach the conclusion that
limitations in ``government projections'' counsel in favor of
widespread retrospective regulatory review specifically for HHS, the
SUNSET final rule relied on a 2005 OMB report that compared pre- and
post-regulation cost-benefit calculations for 47 regulations at five
agencies. However, the report did not include HHS or any HHS
regulations.\36\ Moreover, the 2005 OMB report looked at rules dating
back from 1975 to 1996.\37\ The SUNSET final rule also relied upon
another study that evaluated OMB's 2005 report to Congress on the
benefits and costs of Federal regulations and a 2005 analysis sponsored
by the SBA, but this study did not evaluate any HHS regulations.\38\ In
addition, the SUNSET final rule presented, as evidence of inaccuracies
in regulatory cost-benefit analysis, a publication that looked at eight
regulations and included only one HHS regulation, an FDA rule related
to food safety.\39\ One single FDA regulation is not a sufficiently
representative sample from which any generalizable conclusions may be
drawn regarding HHS regulations. Finally, another study relied upon in
the SUNSET final rule pertained to only one regulation promulgated by
the Environmental Protection Agency (EPA) to address arsenic in
drinking water.\40\ It is not possible to draw any conclusions about
HHS regulations from a study looking at just one EPA regulation.
---------------------------------------------------------------------------
\36\ OMB, Validating Regulatory Analysis: 2005 Report to
Congress on the Costs and Benefits of Federal Regulations and
Unfunded Mandates on State, Local, and Tribal Entities (2005), at 42
(available at <a href="https://perma.cc/R8LX-BQMJ">https://perma.cc/R8LX-BQMJ</a>) (comparing pre- and post-
regulation cost-benefit data for regulations promulgated by the
Occupational Safety and Health Administration, the National Highway
Traffic Safety Administration, the Environmental Protection Agency,
the Department of Energy, and the Nuclear Regulatory Commission).
\37\ Id.
\38\ See 86 FR5697 (citing Winston Harrington, Grading Estimates
of the Benefits and Costs of Federal Regulation, Res. for the
Future, Discussion Paper 06-39 (2006)).
\39\ See 86 FR 5698 (citing Richard Morgenstern, Retrospective
Analysis of U.S. Federal Environmental Regulation, 9 J. of Benefit
Cost Anal., no. 2., 285-304 (2018)).
\40\ See 86 FR 5698 (citing Cynthia Morgan & Nathalie B. Simon,
National primary drinking water regulation for arsenic: A
retrospective assessment of costs, 5 J. Benefit Cost Anal. no. 2
(2014)).
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The Department also strongly disagrees that there is a lack of an
evidentiary basis for many of its regulations. At the most basic level,
the Department relies on evidence to guide it in its public health
mission, including its rulemaking efforts. The economic analyses for
rulemakings include qualitative and quantitative consideration of the
impacts. Evidence, data, and analyses are considered to the extent
available and are reflected in the RIAs for the regulations. The
analyses and supporting data are included and made publicly available
when the rulemaking is published. The same principles apply to the
entire rulemaking.
We are also not persuaded that the working paper cited by the
commenter supports the proposition that HHS's regulations lack an
evidentiary basis. Critically, the paper limited its assessment to
preliminary regulatory impact analyses accompanying proposed
economically significant regulations. This approach discounts any
additional evidence gathered between a notice of proposed rulemaking
and publication of a final rule, including evidence from public
[[Page 32268]]
comment incorporated into the final regulatory impact analysis. Thus,
the commenter likely errs when transferring the findings of the report
to finalized regulations, since HHS is more likely to publish final
rules of actions that are justified. As an additional concern, the
underlying report adopts several assessment criteria that do not speak
to the quality of evidence presented in the preliminary regulatory
impact analyses. For example, the paper awards points based on writing
style, including whether the RIA is ``written in plain English (light
on technical jargon and acronyms, well organized, grammatically
correct, direct language used),'' and on how well a non-specialist
reader would understand the analysis, results, and conclusion. Although
these factors may represent desirable practices, they do not relate to
the evidentiary basis of a regulation. The commenter highlights the
paper's findings related to retrospective review; however, this score
relates to whether a preliminary regulatory impact analysis discusses
whether ``the proposed rule establish[es] measures and goals that can
be used to track the regulation's results in the future'' and whether
it ``indicate[s] the data it will use to assess the regulation's
performance in the future and establish[es] provisions for doing so?''
\41\ Similarly, although these may represent desirable practices, they
do not speak to the evidence contained in regulatory impact analysis of
HHS regulations. Finally, we note that the paper covers proposed rules
published between 2008 and 2013. It is quite likely that a more recent
assessment would yield higher scores for HHS as regards some of the
scoring criteria. For example, the paper assigned points based on
accessibility, including whether an agency publishes proposed rules and
RIAs on its website. FDA now maintains a website containing Economic
Impact Analyses of FDA regulations, which contains links to at least
170 regulatory impact analyses the agency has developed since 2012.\42\
Other HHS agencies currently routinely publish preliminary RIAs in the
same document as notices of proposed rulemaking in the Federal
Register, which is also available online.\43\ Thus, we anticipate that
a more recent assessment of the availability of RIAs online would yield
higher scores in this category. The report also assigned points based
on the verifiability of the models and assumptions used in the
analysis, including whether the RIAs include citations to sources that
justify the models or assumptions. Since the time of the paper, HHS has
updated its approach to valuing reductions in mortality risks in
benefit-cost analysis by commissioning a criteria-driven review of the
empirical literature on the value per statistical life (VSL),\44\ and
has published subsequent documentation of the Department's approach to
updating the VSL to account for income growth and inflation.\45\ HHS
also commissioned research on the approaches used to value changes in
time use and research on estimating impacts related to medical costs in
RIAs, publishing conceptual frameworks and best practices on each of
these topics.<SUP>46 47</SUP> HHS also published Guidelines for
Regulatory Impact Analysis in 2016, which includes best practices for
conducting prospective and retrospective analysis.\48\ Since HHS RIAs
routinely reference these documents, as well as the models and
assumptions contained in these documents, we anticipate that a more
recent assessment of the verifiability of the models and assumptions
used in RIAs would also yield higher scores in this category.
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\41\ <a href="https://www.mercatus.org/system/files/Ellig-Reg-Report-Card-Eval-v1.pdf">https://www.mercatus.org/system/files/Ellig-Reg-Report-Card-Eval-v1.pdf</a>. Quotes are located on pages 14 and 94.
\42\ <a href="https://www.fda.gov/about-fda/reports/economic-impact-analyses-fda-regulations">https://www.fda.gov/about-fda/reports/economic-impact-analyses-fda-regulations</a>.
\43\ <a href="https://www.federalregister.gov/">https://www.federalregister.gov/</a>.
\44\ Robinson, L.A., & Hammitt, J.K., ``Valuing reductions in
fatal illness risks: Implications of recent research,'' 25(8) Health
Economics 1039-52 (2016).
\45\ Office of the Assistant Secretary for Planning and
Evaluation, U.S. Department of Health and Human Services, ``Appendix
D: Updating Value per Statistical Life (VSL) Estimates for Inflation
and Changes in Real Income'' (June 2021) (available at <a href="https://aspe.hhs.gov/reports/updating-vsl-estimates">https://aspe.hhs.gov/reports/updating-vsl-estimates</a>).
\46\ Office of the Assistant Secretary for Planning and
Evaluation, U.S. Department of Health and Human Services, ``Valuing
Time in U.S. Department of Health and Human Services Regulatory
Impact Analyses: Conceptual Framework and Best Practices'' (June
2017) (available at <a href="https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework">https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework</a>).
\47\ Office of the Assistant Secretary for Planning and
Evaluation, U.S. Department of Health and Human Services,
``Estimating Medical Costs for Regulatory Benefit-Cost Analysis:
Conceptual Framework and Best Practices'' (June 2017) (available at
<a href="https://aspe.hhs.gov/reports/estimating-medical-costs-regulatory-benefit-cost-analysis-conceptual-framework-best-practices">https://aspe.hhs.gov/reports/estimating-medical-costs-regulatory-benefit-cost-analysis-conceptual-framework-best-practices</a>).
\48\ <a href="https://aspe.hhs.gov/reports/guidelines-regulatory-impact-analysis">https://aspe.hhs.gov/reports/guidelines-regulatory-impact-analysis</a>.
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The Department also does not agree that the fact that regulated
entities must comply with HHS regulations is a reason to retain the
SUNSET final rule. The commenters appear to suggest that widespread
review of regulations is needed as a sort of quid pro quo for regulated
entities to comply with those regulations. But to the extent that these
comments are purporting to protect the interests of regulated entities,
HHS does not agree that the SUNSET final rule protects those interests.
We have now determined, as discussed in Section VI, that the quantified
costs of the rule far outstrip the quantified benefits, and the
expiration provision threatens the basic regulatory frameworks on which
regulated entities rely. Furthermore, the Department has finite
resources, and we seriously doubt that deploying those resources for
roving review under the SUNSET final rule, rather than other
initiatives important to regulated entities, is in these entities'
interest. We note that almost no regulated entities submitted comments
in support of the SUNSET final rule.
Although some commenters stated that HHS regulations generally are
burdensome, these commenters did not identify any specific regulations
or offer support for their assertions. In any event, we disagree with
the assertion. HHS regulations enhance public health, safety, and
welfare and provide significant cost savings by, for example:
Facilitating the implementation of programs to benefit millions of
stakeholders, including underserved populations; preventing serious
harm to the public; providing clarity and consistency across the public
health spectrum to streamline compliance with statutory requirements;
creating a level playing field for businesses; and boosting consumer
confidence.
In general, HHS agrees that there is value in retrospective review,
but it must weigh that value against the value of other competing
regulatory objectives that may be of equal or greater importance.
Weighing those considerations, the Department has determined that the
SUNSET final rule is not an appropriate way to achieve the goals of
retrospective review.
Comment: Some commenters stated that the SUNSET final rule should
be retained because it provides benefits to the public. These
commenters stated, for example, that the rule: allows HHS to consider
new developments in science and medicine, better respect legal rights
of conscience and religion, and perform more accurate cost-benefit
analyses; gives ``recurring departmental attention to the impact of HHS
regulations on small and independent businesses;'' increases
accountability to real-world impacts; and makes sure that regulations
``do not unnecessarily burden the American public through sheer
inertia.'' Some commenters stated that the rule would ``eliminate red
tape,'' lead to ``faster economic growth'' and ``significant economic
benefits,'' and ``save lives.'' Certain policy advocacy groups
suggested that the
[[Page 32269]]
SUNSET final rule benefits individuals because it provides a mechanism
for every American to have their voice heard.
Response: HHS does not agree that the SUNSET final rule should be
retained based on these purported benefits. First, HHS considers
matters of conscience and religion as relevant and appropriate as a
matter of course, and has an Office for Civil Rights to address such
issues as they arise. We do not see how conducting retrospective
reviews under SUNSET final rule is necessary or even helpful to better
respect legal rights of conscience and religion.
Second, for the purported benefits of eliminating red tape, faster
economic growth, significant cost savings and other types of broad
economic benefits, and saved lives, HHS considers these speculative and
not obviously attributable to the SUNSET final rule. The commenters
make a number of leaps in their analysis to assert these benefits. For
example, they assume that (1) regulations would be amended or rescinded
following review under the SUNSET final rule; (2) these amendments and
rescissions would have overall economic and/or life-saving benefits;
and (3) no other Department processes would result in these same
amendments or rescissions. We disagree both with these assumptions and
the chain of reasoning leading to the conclusion that the SUNSET final
rule would necessarily have these benefits. As discussed in more detail
in our preliminary and final regulatory impact analyses, see 86 FR
59922 and Section VI, the benefit attributable to the SUNSET final rule
is the benefit of any information learned from completing the
assessments and reviews. We note that the SUNSET final rule's
regulatory impact analysis, similarly, contained very little discussion
of benefits and did not quantify any benefits of the rule. 86 FR 5749.
Third, for the purported benefit of helping individuals--for
example, by making it easier for them to participate in the process of
regulatory review and have their voices heard--we do not agree that the
SUNSET final rule would provide that benefit. Our view, which is
informed by many comments on this subject as discussed in detail above,
is that the SUNSET final rule generally harms individuals. The rule
poses harm through, among other things, Department and stakeholder
diversion of resources away from other important initiatives,
uncertainty, and loss of regulatory programs through expiration. And,
with respect to regulations that automatically expire, there will have
been no notice and comment process for the expiration of those specific
regulations. Even considering in a vacuum the purported benefit of
increased stakeholder participation, our regulatory impact analysis
recognizes that the approach of the SUNSET final rule creates greater
costs for stakeholders. Furthermore, the sheer volume of rulemakings
under assessment and review risks overwhelming individual commenters
and preventing their participation.
Fourth, for the remaining benefits asserted by commenters, such as
incorporating new scientific information and updating impact analyses,
HHS recognizes that these could be potential benefits of an
appropriately targeted and manageable retrospective review scheme.
Thus, the RIA notes that the final withdrawal rule will result in
forgone information as a result of not performing the SUNSET final
rule's assessments and reviews. See Section VI below. However, we
disagree that the SUNSET final rule would have generated significant
benefits in these areas that outweigh the costs. Among other things,
the pace and scope of assessments and reviews, combined with the threat
of expiration, would likely curtail the careful and thorough
deliberation needed to produce these types of benefits and could reduce
the quality of regulatory reviews. Moreover, because HHS already
undertakes regulatory review under the RFA and otherwise, benefits in
these areas, if any, would only be incremental over the ones already
produced.
In light of the limited nature of the potential benefits, and
balancing those potential benefits against the significant harms of the
rule (which include, for example, resource diversion from other key
programs, uncertainty, and the potential loss of regulations through
the expiration mechanism), the Department has determined that the
SUNSET final rule should be withdrawn. The Department recognizes that
it previously concluded, in the SUNSET final rule, that the value of
the rule's retrospective review program outweighed any harms associated
with the rule. However, the Department has since identified multiple
flaws in its prior analysis that have led it to reconsider and reverse
this conclusion. Among other things, finalization of the SUNSET final
rule was premised on a miscalculation of the resources needed to comply
with the rule. Because of that error, the analysis in the SUNSET final
rule failed to recognize the effects the rule would have on other key
programs and initiatives and the likelihood of expiration. The
Department also previously miscalculated the substantial burdens the
rule would place on stakeholders. Overall, HHS now recognizes that any
informational benefits of the rule are greatly outweighed by its harms,
and that the rule is irreconcilable with the Department's public health
mission. Thus, HHS is withdrawing this rule.
Comment: Several commenters referred to various E.O.s issued over
the years related to retrospective review. One of these commenters
stated that HHS, in withdrawing the SUNSET final rule, must consider
compliance with the E.O.s identified in the preamble to that rule.
Response: First, we note that many of the E.O.s referred to in
these comments or identified in the SUNSET final rule have been
revoked, including E.O. 12044, E.O. 12291, E.O. 12498, E.O. 13771, and
E.O. 13924. Thus, there is no requirement or expectation of
``compliance'' with these E.O.s.
Second, HHS has considered these E.O.s and does not agree that they
provide support for retaining the SUNSET final rule. Most of these
E.O.s direct agencies to develop plans for the periodic review of
existing significant regulations to determine whether any such
regulations should be modified or repealed so as to make the agency's
regulatory program more effective or less burdensome. One E.O. focuses
on public engagement and OMB reporting with respect to the same scope
of retrospective review. HHS already took various actions in response
to these E.O.s, including publishing a plan and soliciting
comments.\49\ Moreover, the E.O.s have a different purpose and focus
than the SUNSET final rule, which purports to focus on minimizing the
impacts of regulations on small entities. See, e.g., 86 FR 5751
(defining ``Review'' as ``a process . . . the purpose of which shall be
to determine whether Sections [of the CFR] . . . should be continued
without change, or should be amended or rescinded, consistent with the
stated objectives of applicable statutes, to minimize any significant
economic impact of the Sections upon a substantial number of small
entities.'').
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\49\ More information about HHS's actions, including HHS's plan,
progress on the plan, and public engagement, is available here:
<a href="https://www.hhs.gov/open/retrospective-review/index.html">https://www.hhs.gov/open/retrospective-review/index.html</a>.
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Thus, we disagree that the E.O.s constitute a reason to retain the
SUNSET final rule.
Comment: In the Withdrawal NPRM, the Department invited comment on
the experience of states and foreign governments implementing laws
requiring ``sunset reviews.'' A few
[[Page 32270]]
commenters provided an assessment of the positive experience some
states and foreign governments have had with implementing their own
sunset laws. These commenters opposed the Withdrawal NPRM and pointed
to the experience of North Carolina, Missouri, and Texas, whose state
legislatures have each established a sunset law and a process for the
review of state regulations that feature a sunset mechanism. One
commenter stated that North Carolina's process, under which all agency
rules are slated for automatic repeal in 10 years unless reviewed,
resulted in the repeal of about one state rule out of every ten
reviewed. A second comment described the cost savings attributed to the
Texas Sunset Advisory Commission. A third comment noted that Missouri
connects a sunset provision to a five-year periodic review requirement
in a manner very similar to the SUNSET final rule. In contrast, a
comment submitted by the North Carolina attorney general, together with
19 other State attorneys general, expressed support for withdrawing the
SUNSET final rule, noting that the SUNSET final rule posed a direct
threat to their states' health care systems and the health and safety
of their residents.
Response: We appreciate that the commenters provided information in
response to our request. The SUNSET final rule cited the experience of
states and foreign governments as a justification for the rule, noting
that the mechanism of retrospective review being implemented by the
SUNSET final rule was informed by the experience of states and other
jurisdictions that allow for the automatic expiration of regulations
subject to review. See 86 FR 5700 (``experience in the States suggests
that sunset provisions can be an important tool to ensure reviews take
place''). However, the SUNSET final rule did not account for myriad
ways in which those state and international frameworks cited are
considerably different from each other, nor did it account for their
considerable differences with the SUNSET final rule.\50\
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\50\ See, e.g., N.D. Cent. Code 28-32-18.1 (permitting amendment
or repeal of rules without complying with the other requirements of
North Dakota's Administrative Agencies Practice Act relating to
adoption of rules); 75 OK Stat section 75-307.1 (2014) (directing
the Oklahoma House and Senate to conduct rule review); Tenn. Code
Ann. section 4-56-102 (limiting review to procurement rules). One
state cited had repealed its sunset provision. Rhode Island created
an Office of Regulatory Reform to review proposed and existing rules
and regulations, but the statutory provision requiring all agencies
to conduct periodic review of rules was repealed. See R.I. Gen. Laws
Ann. tit. 42, ch. 64.13; see also 2016 R.I. Pub. Laws 206 (June 29,
2016) (repealing section 42-35-3.4 of Rhode Island's Administrative
Procedures Act).
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The Department has given further consideration to differences
between state sunset laws, such as those of North Carolina, Missouri,
and Texas, and the HHS SUNSET final rule. These differences include the
legislative origins, implementation, operations, governing
administrative law requirements, and the scope, breadth and volume of
regulations. More specifically, the states' experience with their
sunset laws is of limited relevance to HHS because of the vastly
greater scope of national regulations that impact tribal, state and
local governments, and international stakeholders; the corresponding
greater extent of the economic and public health impacts of the
regulations; the amount of Department and stakeholder resources
consumed by that larger scope; and differences in governing law,
including the APA. We now conclude that the differences are so stark
the states' experiences have limited relevance for the Department and
do not support retention of the SUNSET final rule.
For example, with respect to North Carolina, the initial assessment
outlined in its sunset law does not entail the multi-factor review and
assessment required by the SUNSET final rule to evaluate whether a
regulation has significant economic impact on a substantial number of
small entities. Rather, the North Carolina law enacted by the General
Assembly entails periodic review and expiration based on whether the
rule is ``necessary with substantive public interest,'' ``necessary
without substantive public interest,'' or ``unnecessary.'' \51\ Given
that this framework is starkly different from the framework in the
SUNSET final rule, and given the differences in the breadth and
complexity of the underlying HHS regulations as compared to state
regulations, the state experience implementing its own law does not
shed much light on how implementation of the SUNSET final rule would
impact the Department and its stakeholders. For example, the state
experience does not inform the extent of Federal resources which would
be diverted from addressing public health goals to undertake the scale
and pace of reviews required by the SUNSET final rule, and potentially
defend against challenges to each of those actions.
---------------------------------------------------------------------------
\51\ N.C. Gen. Stat section 150B-21.3A, ``Periodic Review and
Expiration of Existing Rules.''
---------------------------------------------------------------------------
The commenter also contended that continuing to create regulations
without revisiting them is irresponsible because, with decades passing
by without review, it is reasonable and likely to expect some portion,
possibly sizeable, of HHS rules to be obsolete. The commenter asserted
that North Carolina's experience with regulatory review supports this
assertion. We disagree. The commenter's characterization of HHS
regulations was conclusory and not grounded in any actual evaluation of
current HHS regulations. In particular, it failed to take into account
the regulatory reviews that have taken place and it assumes without
evidence that the passage of time alone makes regulations obsolete.
However, as discussed in greater detail elsewhere in this section, many
regulations remain unchanged because they work as intended. For
example, regulations that establish product standards or public service
programs may not need periodic updates and their automatic expiration
would cause public harm.
Under the Texas Sunset Law, the Texas Legislature se
[…truncated; see source link]Indexed from Federal Register on May 27, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.