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HHS Invokes Retrospective Review of All Rules in Waning Days (1)

Jan. 8, 2021, 2:06 PM; Updated: Jan. 8, 2021, 2:40 PM

Health regulations that aren’t reviewed every 10 years to determine whether they are still needed would expire under a rule finalized Friday.

The final rule exempts certain Food and Drug Administration regulations and annual Affordable Care Act rules, in addition to procedural rules, regulations issued jointly with other agencies, and regulations around internal management.

The Department of Health and Human Services will have five years to assess regulations that are more than 10 years old, and the department can extend that deadline one time per regulation, for up to a year.

The move comes just a week and a half before President-elect Joe Biden is inaugurated and adds additional duties to his incoming HHS staff. The transition team said it plans to issue a memo effective Inauguration Day that will block regulations from taking effect that haven’t done so yet.

The rule will take effect 60 days after publishing in the Federal Register, which will be after the inauguration.

“For decades, Presidents have said agencies should retrospectively review their regulations. With the SUNSET rule, HHS is actually doing it,” HHS Secretary Alex Azar said in a statement. “Finalizing our SUNSET rule will deliver for the American people better, smarter, less burdensome regulations in the years to come.”

All new reviews of regulations will need to be announced in the Federal Register, and the public will be allowed to comment through regulations.gov.

This would likely open the HHS up to additional legal challenges, said Kelly Cleary, former HHS deputy general counsel and Centers for Medicare & Medicaid Services chief legal officer.

‘Well Worth It’

HHS chief of staff Brian Harrison told reporters in a call that he “expects massive benefits” to the government and economy, which he said would “dwarf” any resource requirements from such challenges and would be “well worth it.”

“I fully expect that this regulation will be enduring,” Harrison said, pointing to the support for such measures from Democratic and Republican regulatory researchers and the attempts from presidents of both parties.

Harrison said that the HHS, the largest nonmilitary federal agency, “easily” has enough staff to review these regulations.

Some regulations the department said were outdated include restrictions for practicing medicine across state lines, telemedicine platforms, and other rules suspended during the Covid-19 pandemic.

The HHS said it’s finalizing the regulation during the Covid-19 pandemic because the first reviews aren’t due until 2026, and agency employees have “also been able to continue moving forward on a range of priorities to enhance and protect the health and well-being of the American people.”

Regulatory researchers said the possibility of rules expiring could create uncertainty for businesses, but the HHS said “states and other countries have versions of sunset rules, and they have not created uncertainty or wreaked havoc.”

HHS officials said they aren’t finalizing the rule in their last weeks on the job to “hurt the next administration,” saying, “regulatory experts across the spectrum have long called for institutionalizing retrospective review.”

(Updates with additional detail and comment, starting in the fourth paragraph.)

To contact the reporter on this story: Shira Stein in Washington at sstein@bloomberglaw.com

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