Lawsuit claims HHS sunset rule is a 'ticking timebomb' for agency

Gavel and flag in courtroom
A federal lawsuit claims that a controversial rule creating a massive overhaul of Department of Health and Human Services regulations would cause massive instability in the healthcare industry. (Getty/AlexStar)

A new lawsuit led by several health groups seeks to strike down a last-minute rule approved under the Trump administration that will create “incalculable costs and chaos” for the Department of Health and Human Services (HHS).

The lawsuit (PDF), filed Tuesday by several groups including the American Lung Association in the U.S. District Court for the Northern District of California, concerns a controversial rule that requires HHS to review and approve any regulations 10 years or older to ensure they are up to date. Any rule that does not get approved or reviewed will expire in 2026.

“The outgoing administration planted a ticking timebomb set to go off in five years unless HHS, beginning right now, devotes an enormous amount of resources to an unprecedented and infeasible task,” the lawsuit said.

The lawsuit charges that the rule was approved in violation of federal law and should be set aside. HHS’ comment period on the rule was rushed and did not give commenters enough time to participate, the plaintiffs argue.

“The limited public process was particularly problematic because affected parties were asked to discern, and comment on (over the holidays, no less) the impacts of a sweeping and vague proposal in the middle of a global pandemic,” according to the lawsuit.

The Trump administration proposed the rule in November, charging it was needed to get rid of burdensome regulations. The administration finalized the rule in early January before Biden was inaugurated president and gave HHS five years to review any existing regulations that were 10 years or older.

HHS refused to consult with Indian tribes as required under agency policy and “the federal government’s tribal trust responsibilities,” the lawsuit added.

The California Tribal Families Coalition is one of the plaintiffs alongside Santa Clara County, the Center for Science in the Public Interest and the National Association of Pediatric Nurse Practitioners.

The groups say the rule is arbitrary, and the justification for the rule is irrational.

“It assumes without support that HHS can induce itself to increase its pace of review 20-fold merely by imposing on the general public the severe consequence of losing needed regulations,” the filing said.

HHS also did not show that its staff can implausibly complete the review in the five-year period, the lawsuit charges.

It calls for an exhaustive review of approximately 18,000 regulations.

“This would require a resource-intensive and time-consuming effort on part with full notice-and-comment rulemaking, but at a pace 20 times faster than the department has ever conducted retrospective review in the past,” the filing added.

The plaintiffs argue the rule will create “immediate uncertainty and instability” in the healthcare system as stakeholders like nurses or hospitals won’t have any idea whether a regulation that applies to them is on the chopping block.

“All plaintiffs will have to divert significant resources to monitor the progress of each regulation that affects them and to attempt to stem the effects of potential automatic expiration,” the lawsuit said.

HHS did not immediately return a request for comment on the lawsuit. The agency also did not say whether the rule is impacted by a regulatory freeze.

The Biden White House has called for a regulatory freeze on any last-minute regulations approved by his predecessor. HHS has delayed several agency rules so far, including a rule on Medicare Part D rebates and one on community health centers and 340B discounts.