HHS finalizes rule that mandates exhaustive review of older regulations

The Department of Health and Human Services (HHS) has finalized a rule that requires the agency to review all of its existing regulations and sunset any that don’t meet certain criteria.

The final rule, released Friday, is a regulatory overhaul that could impact rules across the healthcare industry. Since proposing the rule in November, HHS made several changes intended to make it easier for the public to determine when a rule is under review and to comment on it.

“I do believe that by doing this it will be the boldest and most significant regulatory reform ever undertaken, for sure by HHS and also by the federal government,” said Brian Harrison, HHS chief of staff, in an exclusive interview with Fierce Healthcare.

In a major change from the proposed rule, the final regulation gives HHS five years to review any existing regulations that are 10 years or older as opposed to two years under the proposal.

“There were a lot of folks that had questions about ability to do it in a period of time and resources required to do it,” Harrison said.

There are a lot of regulations that would require a review in five years, as HHS estimated roughly 2,480 would need to be reviewed. 

The rule would require HHS to review its regulations every 10 years to determine whether they must be reviewed by the Regulatory Flexibility Act, which requires agency inspection of certain rules. A review under the act includes whether a rule is still needed, whether it is duplicative or whether any technological or economic updates require rescinding it.

If HHS does not assess and review them in a timely manner, the rule will expire.

The rule does not apply to any HHS regulations that were jointly released with other agencies, any rules issued for military or foreign affairs issues or any on personnel matters. Annual payment rule updates such as those for hospitals and physicians are exempt; so are rules for the Medicare Diabetes Prevention Program.

The Notice of Benefit Payment Parameters, which outlines regulations each year for the Affordable Care Act exchange plans, also is exempt. 

The final rule keeps those exemptions and includes a new exemption for any product-specific rules created by the Food and Drug Administration, according to an HHS subject matter expert who spoke with Fierce Healthcare.

"Many of the regulations we are exempting already have robust policies in place to provide periodic review," Harrison told reporters during a call Friday.

The rule has gotten severe pushback from some in the healthcare industry.

The American Hospital Association (AHA) said in comments that it could be confusing if a rule is up for review and when the public can comment. It criticized the rule’s plan of setting up a website where if a deadline to review an assessment or a review is nearing, the public can submit a comment requesting the assessment to start.

The AHA gave an example of alternative payment models that get waivers of certain regulations such as the telehealth originating site requirement.

“If HHS unilaterally, and without public input, removed these waivers, modified them in an inappropriate manner, or let them inadvertently expire, it would cause confusion for participants and beneficiaries alike, and likely lead to failures of the program to achieve its goals,” the AHA said.

In response to the concerns, each month HHS will post all new assessments and reviews in the Federal Register and enable comments on any such reviews.

“We are going to be setting up a dashboard where we will announce progress on assessing reviews,” a subject matter expert said. “We will update folks on progress.”