HHS Proposes Regulatory Review Every 10 Years

WASHINGTON, D.C. (November 5, 2020)—The Department of Health and Human Services (HHS) issued a notice of proposed rulemaking requiring the department to assess its regulations every ten years to determine whether they are subject to review under the Regulatory Flexibility Act (RFA), which requires regular review of certain significant regulations. If a given regulation is subject to the RFA, the department must review the regulation every ten years to determine whether the regulation is still needed and whether it is having appropriate impacts. Regulations will expire if the department does not assess and (if required) review them in a timely manner.

“For decades, presidents have said agencies should retrospectively review their regulations. Under President Trump, HHS is actually doing it,” said HHS Secretary Alex Azar in a statement. “Our proposed rule is an effective way to deliver on the requirements of the Regulatory Flexibility Act, signed by President Carter and on the books since 1980. With HHS regulatory responsibilities as wide-ranging as food safety, drug approval, adoption and childcare, and healthcare financing, it’s essential that we know—and inform the American people—whether we’re executing on these responsibilities in a way that maximizes benefits, minimizes costs, and keeps up with the times.”

“This proposal—the boldest and most significant regulatory reform effort ever undertaken by HHS—would sunset burdensome regulations unless their necessity is publicly demonstrated to the American people,” said HHS Chief of Staff Brian Harrison.

Under the proposed rule, any regulation issued by HHS (with certain exceptions) will cease to be effective ten years after it is issued, unless HHS performs a plenary assessment of the regulation and a more detailed review of those regulations that have a significant economic impact upon a substantial number of small entities.  

That is, all HHS regulations, with certain exceptions (detailed below) will be subject to a two-step review: 1) assessing whether they have a significant economic impact on a substantial number of small entities, the standard set out under the RFA; and, if it qualifies for review under the RFA, 2) a more detailed review that will consider, as prescribed in the RFA, (i) the continued need for the rule, (ii) complaints about it, (iii) the rule’s complexity, (iv) the extent to which it duplicates or conflicts with other rules, and (v) whether technological, economic and legal changes favor amending or rescinding the rule.

Retrospective review of the costs and benefits of federal regulations has long been a goal of Presidents and regulatory experts across the political spectrum.

When agencies impose regulations, they make projections about the regulation’s impact on the public. Once a rule has been in place, agencies should test those projections and see what real-world impact the regulation is having and amend or rescind if appropriate. This proposed rule would incentivize HHS to conduct these performance reviews of its regulations to ensure that rules are delivering the benefits projected in view of the best available science, data, and evidence. An artificial-intelligence-driven data analysis of HHS regulations found that 85% of department regulations created before 1990 have not been edited.

Certain regulations are exempt: regulations that are jointly issued with other agencies, regulations that legally cannot be rescinded, and regulations issued with respect to a military or foreign affairs function or addressed solely to internal management or personnel matters (two categories exempt from standard rulemaking requirements under the Administrative Procedure Act). Regulations that affect the regulations of other agencies will be reviewed in conjunction with those agencies.

This proposed rule seeks to increase transparency, public participation, and democratic accountability. As part of the review process, the public can submit comments on the impacts of regulations.

The proposed rule will be subject to a public comment period. There will also be a public hearing on this proposed rule. Depending on the public comments, HHS could finalize a version of this rule after the public comment period concludes.

Read the proposed rule here, and find additional background here.

Comments are due Jan. 4, 2021.