On October 20, 2021, the U.S. Department of Health and Human Services (HHS) published a proposed rule that would repeal regulations issued in the twilight of the Trump administration that limited HHS’s use of guidance documents. Comments on the proposed rule are due by November 19, 2021. Stakeholders and parties regulated by HHS should be aware of this significant development, as the proposed rule—if finalized—will affect many agency decisions and actions, including claims reviews, audits, and government investigations.
Overview of the HHS Guidance Rules
In December 2020 and January 2021, in the wake of several Trump administration executive orders and other HHS and U.S. Department of Justice (DOJ) initiatives,[1] HHS published the Good Guidance Practices Rule[2] and the Transparency and Fairness in Civil Administrative Enforcement Actions Rule[3] (together, the “HHS Guidance Rules”). The HHS Guidance Rules contain sweeping changes to HHS’s ability to issue and use guidance documents. These changes include the following:
- a prohibition on the issuance and use of improper guidance documents;
- a requirement that HHS agencies identify guidance documents, explain the purpose and scope of guidance documents, and include disclaimers on guidance documents;
- the creation of a process for HHS to approve significant guidance documents that are expected to have an annual impact of more than $100 million;
- the establishment of a guidance repository, which includes all guidance documents that have been issued by any component of HHS;
- the addition of a petition process for interested parties to challenge guidance documents because such documents impose binding obligations beyond what is required by the terms of applicable statutes and/or regulations;
- a limitation on HHS’s ability to rely on guidance documents in civil enforcement actions;
- a requirement of fairness and notice in civil enforcement actions, administrative inspections, and jurisdictional determinations; and
- the establishment of a process for interested parties to contest agency determinations prior to the commencement of an enforcement action.[4]
As final rules that went into effect prior to the inauguration of President Biden, the HHS Guidance Rules were not affected by the regulatory freeze ordered by the Biden administration on January 20, 2021.
Overview of HHS’s Proposed Rule to Repeal the HHS Guidance Rules
On October 20, 2021, HHS published its “Department of Health and Human Services Proposed Repeal of HHS Rules on Guidance, Enforcement, and Adjudication Procedures.”[5]
The proposed rule states that HHS under the Biden administration believes that the HHS Guidance Rules “create unnecessary hurdles that hinder [HHS’s] ability to issue guidance, bring enforcement actions, and take other appropriate actions that advance the Department’s mission … and are contrary to the efficient and effective administration of the wide array of programs by [HHS].”[6] According to HHS, both rules “inappropriately constrict the Department’s ability to efficiently interpret and enforce regulations” and they are “incompatible with the efficient and effective administration of a Department as large and diverse as HHS.”[7] HHS has concluded that both rules “frustrate [HHS’s] ability to efficiently direct and operate in the interest of public health … are inconsistent with the policies and goals of the current Administration … [and] make [HHS] operations more cumbersome and burdensome.”[8]
For these reasons, HHS proposes to repeal the HHS Guidance Rules. If finalized, the one relic of those rules will be the guidance document repository, which HHS will maintain (though HHS will no longer consider guidance documents that are not in the repository to be rescinded).[9]
Important Considerations
HHS’s proposed rule follows similar DOJ actions to undo Trump-era policies. On July 1, 2021, U.S. Attorney General Merrick Garland published a memorandum entitled “Issuance and Use of Guidance Documents by the Department of Justice” (i.e., the “Garland Memo”), which revised and clarified the principles that govern DOJ’s issuance and use of guidance documents.[10] The Garland Memo rescinded the memoranda issued during the Trump administration that prohibited improper guidance documents (i.e., the “Sessions Memo”)[11] and DOJ’s use guidance documents to establish violations of law in affirmative civil enforcement actions (i.e., the “Brand Memo”[12]). On July 16, 2021, DOJ also published a similar interim final rule revoking certain DOJ regulations issued in 2020 that imposed limitations on DOJ’s issuance and use of guidance documents.[13]
While the repeal of the HHS Guidance Rules would remove a variety of procedures designed to limit the improper use of guidance, HHS clarified in the proposed rule that it remains HHS’s position that the repeal:
would not change the existing state of the law on the non-binding effect of guidance documents or whether they lack the force and effect of law. Nor would such repeal permit an agency to use guidance documents to establish or change policies where rulemaking is otherwise required, or to require outside parties to take or refrain from taking certain actions that are not addressed by statute or regulation. See generally Azar v. Allina Health Servs., 139 S. Ct. 1804 (2019) (finding that Medicare-related guidance cannot create additional burdens beyond those included in statute or regulation).[14]
Additionally, HHS noted that it already has processes that are in use by stakeholders seeking changes to or rescission of existing guidance, as well as processes for stakeholders wishing to challenge agency decisions (including those involving applicability of guidance documents) that are unique to the agency and the communities with whom the agency works. As examples, HHS highlighted the following: (1) citizen petitions related to U.S. Food and Drug Administration guidance, (2) the appeals process at 42 CFR part 498 for facilities that disagree with decisions involving application of guidance governing Medicare eligibility and participation, and (3) the review of guidance documents by the Office of Information and Regulatory Affairs (OIRA) in appropriate circumstances.[15] HHS also noted that the repeal does not impact a stakeholder’s ability to regularly communicate with HHS and petition HHS to take certain actions related to guidance documents “under their general rights to communicate with and to seek redress from the Federal Government.”[16]
It remains to be seen if HHS will finalize the proposed rule and, if so, whether established administrative processes will be sufficient to address the improper use of guidance documents. However, the proposed rule makes it clear that HHS under the Biden administration believes that the current regulations are unworkable regardless of their original intent.
Comments on the proposed rule are due on November 19, 2021. We encourage all interested and impacted parties to provide comment.
ENDNOTE
[1] See, e.g., Executive Order 13891, Promoting the Rule of Law Through Improved Agency Guidance Documents (Oct. 9, 2019), 84 Fed. Reg. 55235-38 (Oct. 15, 2019); Executive Order 13892, Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication,” 84 Fed. Reg. 55239-43 (Oct. 15, 2019); Jeff Overley, Law360, HHS Attys Say High Court Ruling Curbs Billing Enforcement (Nov. 21, 2019), available at https://www.law360.com/articles/1222453/hhs-attys-say-high-court-ruling-curbs-billing-enforcement (including the Cleary-Jenny Memo as an attachment).
[2] 85 Fed. Reg. 78770-87 (Dec. 7, 2020) (regulations codified at 45 C.F.R. §§ 1.1 – 1.5); see also HHS, Press Release, HHS Finalizes Good Guidance Practices Rule and Issues Advisory Opinion Regarding Compliance with Notice-and-Comment Obligations (Dec. 3, 2020), available at https://www.hhs.gov/about/news/2020/12/03/hhs-finalizes-good-guidance-practices-rule-issues-advisory-opinion-regarding-compliance-notice.html.
[3] 86 Fed. Reg. 3010-15 (Jan. 14, 2021) (regulations codified at 45 C.F.R. Part 1); see also HHS, Press Release, HHS Improves Agency Procedures Relating to Transparency and Fairness in Civil Enforcement Actions (Jan. 12, 2021), available at https://www.hhs.gov/about/news/2021/01/12/hhs-improves-agency-procedures-relating-transparency-fairness-civil-enforcement-actions.html.
[4] See generally Jonah Retzinger and Robert Wanerman, HHS Limits the Use of Guidance Documents in the Good Guidance Practices Rule and Advisory Opinion 20-05 (Dec. 10, 2020), available at https://www.ebglaw.com/news/hhs-limits-the-use-of-guidance-documents-in-the-good-guidance-practices-rule-and-advisory-opinion-20-05/ (discussing the Good Guidance Practices Rule); Jonah Retzinger and Robert Wanerman, HHS Limits Use of Guidance Documents in Civil Enforcement Actions and Issues First Good Guidance Practices Petition Response (Jan. 19, 2021), available at https://www.ebglaw.com/insights/hhs-limits-use-of-guidance-documents-in-civil-enforcement-actions-and-issues-first-good-guidance-practices-petition-response/ (discussing the Transparency and Fairness in Civil Administrative Enforcement Actions Rule).
[5] 86 Fed. Reg. 58042-53 (Oct. 20, 2021), available at https://www.federalregister.gov/documents/2021/10/20/2021-22503/department-of-health-and-human-services-proposed-repeal-of-hhs-rules-on-guidance-enforcement-and.
[6] 86 Fed. Reg. at 58043.
[7] 86 Fed. Reg. at 58044-45.
[8] 86 Fed. Reg. at 58049.
[9]Id.; see also HHS, Advisory Opinion 20-05 on Implementing Allina (Dec. 3, 2020), available at https://www.hhs.gov/guidance/document/advisory-opinion-20-05-implementing-allina.
[10] Memorandum from Att’y Gen., Issuance and Use of Guidance Documents by the Department of Justice (July 1, 2021), available at https://www.justice.gov/opa/page/file/1408606/download.
[11] Memorandum from Att’y Gen., Prohibition on Improper Guidance Documents (Nov. 16, 2017), available at https://www.justice.gov/opa/press-release/file/1012271/download.
[12] DOJ, Press Release, Associate Attorney General Brand Announces End To Use of Civil Enforcement Authority to Enforce Agency Guidance Documents (Jan. 25, 2018), available at https://www.justice.gov/opa/pr/associate-attorney-general-brand-announces-end-use-civil-enforcement-authority-enforce-agency.
[13] 86 Fed. Reg. 37674-76 (July 16. 2021) (revoking 28 C.F.R. §§ 50.26 and 50.27).
[14] 86 Fed. Reg. at 58049-50.
[15] Id.
[16] Id.
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