American Atheist Legal Center Issues Public Comment on HHS Proposed Rule

WASHINGTON, Dec. 19 -- Geoffrey T. Blackwell, litigation counsel at the American Atheist Legal Center, has issued a public comment on the Department of Health and Human Services proposed rule entitled "Securing Updated and Necessary Statutory Evaluations Timely". The comment was written on Dec. 4, 2020, and posted on Dec. 8, 2020:

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American Atheists writes in response to the request for public comments regarding the Proposed Rule entitled Securing Updated and Necessary Statutory Evaluations Timely (RIN: 0991-AC24), published November 4, 2020./1

By retroactively imposing a conditional expiration provision on most HHS regulations, this rule creates burdensome requirements which will make government slower and less responsive to the needs of constituents. The Proposed Rule would establish new, vague, "assessment" and "review" procedures to determine which, if any, regulations should be retained or revised without properly addressing the dramatically increased burden these processes will place on the Department or the potential consequences of vital regulations expiring without review if the Department lacks sufficient resources to review every regulation.

American Atheists is a national civil rights organization that works to achieve religious equality for all Americans by protecting what Thomas Jefferson called the "wall of separation" between government and religion created by the First Amendment. We strive to create an environment where atheism and atheists are accepted as members of our nation's communities and where casual bigotry against our community is seen as abhorrent and unacceptable. We promote understanding of atheists through education, outreach, and community-building and work to end the stigma associated with being an atheist in America. Americans deserve clear, coherent government guidance about their rights and responsibilities under the law, including their right to religious equality guaranteed by the First Amendment.

The Trump Administration has expressed a desire to reduce government regulations that needlessly burden individuals and businesses. Unfortunately, this Proposed Rule takes the wrong approach. It attempts, through an impermissibly truncated rulemaking process, to make sweeping changes to countless regulations implementing numerous statutes administered by HHS, requiring the Department to devote additional, substantial resources to regulatory review rather than implementing and enforcing the law. A cynical observer might believe that this rule is intended merely to tie the hands of an incoming new administration - and the aggressive timing and context of this Proposed Rule does nothing to dispel that theory.

The Notice of Proposed Rulemaking improperly imposes a 30-day comment period.

Requiring the public to submit comments to the Proposed Rule within 30 days of publication, rather than within the standard 60-day comment period deprives the public of a meaningful opportunity to participate. This is particularly troubling when the Proposed Rule was published the day after the current administration lost reelection and when the shortened, 30-day comment period includes a major, national holiday. Moreover, the Proposed Rule's 30-day comment period is inconsistent with the requirements of the Administrative Procedures Act (APA) and applicable executive orders. In particular:

* The APA requires that the public have a meaningful opportunity to comment ("...the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments...")./2

The failure to provide this opportunity renders any final rule procedurally invalid.

* Executive Order 13563 directs that "[t]o the extent feasible and permitted by law, each agency shall afford the public a meaningful opportunity to comment through the Internet on any proposed regulation, with a comment period that should generally be at least 60 days."/3

* Executive Order 12866 directs that "[e]ach agency should afford the public a meaningful opportunity to comment on any proposed regulation, which in most cases should include a comment period of not less than 60 days."/4

The Proposed Rule offers no legitimate basis to deviate from the 60-day norm for public comment on proposed rules. No exigent circumstances compel the immediate imposition of a new requirement that substantial regulations expire after 10 years. In fact, the substantial and wide-ranging burdens that would be imposed by the Proposed Rule weigh against a truncated comment period.

The Proposed Rule is sweeping in its scope, impacting any "'rules which have or will have a significant economic impact upon a substantial number of small entities.'''/5

In effect, HHS is trying to amend roughly 18,000 individual regulations, many of which are economically substantive. It is especially absurd that the Department attempts to make such drastic changes while allowing only a shortened 30-day timeline for public comment.

Such a change is certain to impact beneficiaries of nearly all HHS programs and grants. According to the Tracking Accountability in Government Grants System, HHS provided more than $1.6T of financial assistance through 574 separate programs in the 2020 fiscal year./6

The resources that would need to be devoted to the "assessment" and "review" processes, by both HHS and private entities, are daunting and the potential long-term impact of the change is completely disregarded by the Proposed Rule and limited comment period. The far-reaching potential impact of the Proposed Rule, and absence of any need for urgency whatsoever, weigh strongly in favor of a 60-day comment period to allow the public and experts from all sides a meaningful opportunity to provide HHS with thorough and reasoned input. The decision by HHS to shorten the comment period to 30 days raises serious concerns and could have numerous legal implications, significant costs for beneficiaries, grant applicants and recipients, federal agencies, state and local agencies charged with enforcing their own civil rights laws, taxpayers, and the economy as a whole.

The Proposed Rule undermines, rather than achieves, transparency and accountability.

Maintaining a transparent and accountable government are two criteria of good public administration. The Proposed Rule fails these criteria by simply allowing a vast number of regulations to expire after ten years (or as soon as two years from the Proposed Rule going into effect) unless HHS can conduct a review of every single one. In order to retain a regulation, HHS must consider "a variety of factors, including the continued need for the rule, legal issues, public input, overlap and duplication with other federal or State and local governmental rules, and technological, economic, or other changes."/7

The Proposed Rule argues that these strict, arbitrary sunset provisions are required "in order to ensure evidence-based regulation that does not become outdated as conditions change."/8

In fact, the Proposed Rule will only further hamstring HHS by forcing it to divert significant resources from the task of serving the public and enforcing the law to instead conduct a constant stream of "assessments" and "reviews" of regulations lest vital provisions be invalidated.

The Department asserts that the Proposed Rule will increase transparency or accountability, yet it does nothing other than require numerous and burdensome "assessments" and "reviews" within the next two years without ensuring, or even adequately assessing, the additional resources necessary to achieve compliance.

The "assessment" and "review" processes created by the Proposed Rule are vague and burdensome.

HHS asserts that the Proposed Rule will promote "accountability, administrative simplification [and] transparency. . . ."/9

In fact, the proposed rule would create a significant administrative burden that would divert resources from critical work, including efforts to address the COVID-19 pandemic. HHS itself estimates that the proposed rule would cost nearly $26 million dollars over 10 years, needing 90 full-time staff positions to undertake the required reviews./10

This is a remarkable underestimate. Within the first two years, HHS estimates the need to assess at least 12,400 regulations that are over 10 years old./11

Moreover, these estimates fail to account for the time, staffing, and resources needed to establish a whole new review process for these documents, and they do not accurately account for complications that may arise.

The Proposed Rule would adversely affect HHS's ability to focus on the administration of current programs, to issue new regulations, and appropriately review current regulations that need modification. HHS is statutorily responsible for administering programs that account for approximately a quarter of the federal budget/12 and, in the coming year, will likely face significant new burdens on its personnel and resources as the fight against COVID-19 shifts to vaccine distribution. Those efforts, as well as the implementation of the incoming administration's priorities beyond COVID-19,/13 will suffer significantly if the Department is forced to devote limited resources to a slew of random regulations that suddenly happen to have impending expiration dates rather than to new and existing regulations that urgently need development and review.

Several regulations implementing important parts of the Affordable Care Act are approaching their ten-year anniversary, like the Medicaid cost-sharing rule./14

Regulations like these would need to be reviewed within the next two years, or they would expire. However, the underlying law still exists, even if the regulations expire. Without the cost-sharing rule, states would not have clear guidance on how to implement cost-sharing amounts. Especially during crisis situations like COVID-19, it is critically important that HHS have the flexibility and bandwidth to shift focus and respond quickly to immediate needs.

The current rule would wreak havoc across all HHS programs

Regulations play an important role in implementing HHS policies and programs including safety net programs such as Medicaid and the Children's Health Insurance Program (CHIP), which provide health coverage for over 75.5 million people, including 36.6 million children. A strong regulatory framework provides states the clarity they need to run these programs on a day-to-day basis, gives providers and managed care plans guidance as to their obligations, and explains to beneficiaries what their benefits and responsibilities are under these programs. The Proposed Rule would create legal uncertainty regarding the validity and enforceability of regulations throughout the review process.

The bigger danger posed by the Proposed Rule is that important regulations may be arbitrarily rescinded because there are simply not enough HHS staff or resources to undertake such a sweeping review process. Regulations that do not complete the complicated and time consuming review process would summarily expire, potentially leaving vast, gaping holes in the regulatory framework implementing HHS programs and policies.

For example, multiple insurance affordability programs including Medicaid and CHIP rely on regulations at 42 C.F.R. Sec. 435.603 to determine financial eligibility using Modified Adjusted Gross Income (MAGI) methodologies. If this regulation were to simply disappear, programs would be free to redefine MAGI household and income counting rules, with no standards, consistency, or accountability. Arbitrarily rescinding large swaths of regulations would wreak havoc in HHS programs, leading to untold harm to the millions of people who rely on those programs.

The proposed rule is unnecessary and HHS does not have the authority to propose automatic expiration dates on almost all regulations.

The Proposed Rule claims that automatic expiration dates give HHS the incentive necessary to conduct regular assessments of existing regulations and comply with the Regulatory Flexibility Act (RFA). First, HHS agencies already commonly update regulations when needed. For example, in 2002 the Centers for Medicare & Medicaid Services (CMS) promulgated new regulations implementing statutory changes to Medicaid managed care./15

In 2015, CMS published a Notice of Proposed Rulemaking to update and modernize Medicaid managed care regulations./16

CMS took nearly a year to review and consider the 875 comments submitted, publishing the final rulemaking in May 2016./17

This administration undertook further rulemaking to revise Medicaid managed care regulations, to "relieve regulatory burdens; support state flexibility and local leadership; and promote transparency, flexibility, and innovation in the delivery of care."/18

HHS' contention that it needs to "incentivize" regulatory review by imposing a mandatory rescission is simply not supported by the facts./19

Further, the RFA requires each agency to publish "a plan for the periodic review of the rules issued by the agency which have or will have a significant economic impact upon a substantial number of small entities."/20

However, nothing in this forty year-old law authorizes agencies to retroactively impose a blanket expiration date to rescind duly promulgated regulations.

In fact, this proposal is contrary to the Administrative Procedure Act's (APA) requirements for rulemaking. In the APA, Congress established clear procedures and standards for agencies seeking to modify or rescind a rule. The APA requires agencies to go through the same rulemaking process to revise or rescind a rule as they would for a new rule, with public notice and the opportunity to comment./21

HHS states it has authority under the APA to add end dates, or conditions whereby a previously promulgated rule would expire./22

We do not dispute that federal agencies can later amend existing regulations. However, the Proposed Rule would modify thousands of separate, distinct rules across HHS in a single stroke, in violation of the APA. HHS' attempt to apply a blanket amendment to 18,000 regulations violates the APA's requirements that review of an existing rule take place on an individual basis, requiring specific fact-finding relevant to the individual rule that the agency wants to amend.

Conclusion

The Proposed Rule is nothing more than an attempt by the outgoing administration to sabotage the vital mission of HHS under the incoming administration and destroy duly promulgated regulations, by retroactively imposing an arbitrary end date to duly promulgated regulations. This rule is improper, unnecessary, will wreak havoc in current HHS programs, and will tie the hands of the incoming Administration by detracting from critical issues like the COVID-19 pandemic, to undertake this time-consuming process. We strongly oppose this rule, and urge HHS to withdraw it immediately. Thank you for the opportunity to comment on this important issue. If you should have any questions regarding American Atheists' opposition to this Proposed Rule, please contact me at 908.276.7300 ext. 310 or by email at [email protected].

Sincerely,

Geoffrey T. Blackwell, Esq. Litigation Counsel American Atheist Legal Center [email protected]

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Footnotes:

1/ Securing Updated and Necessary Statutory Evaluations Timely; HHS Notice of of Proposed Rulemaking, 85 Fed. 214 (Nov. 4, 2020) (hereafter "Proposed Rule"). Available at https://www.federalregister.gov/documents/2020/11/04/2020-23888/securing-updated-and-necessary-statutory-evaluations-timely.

2/ 5 U.S.C. Sec. 553(c).

3/ Exec. Order 13563 Sec. 2(b) (Jan. 18, 2011) (emphasis added).

4/ Exec. Order 12866 (Sept. 30, 1993) (emphasis added).

5/ 85 Fed. Reg. 70097, quoting 5 U.S.C. Sec. 610(a).

6/ HHS, A Closer Look at HHS Total Assistance, https://taggs.hhs.gov/TotalAssist (last accessed Dec. 2, 2020).

7/ 85. Fed. Reg. 70097.

8/ Id.

9/ 85 Fed. Reg. 70104.

10/ 85 Fed. Reg. 70116.

11/ 85 Fed. Reg. 70112. To be specific, HHS states that "because the Department estimates that roughly five regulations on average are part of the same rulemaking, the number of Assessments to perform in the first two years is estimated to be roughly 2,480." Id.

12/ See HHS, A Closer Look at HHS Total Assistance, https://taggs.hhs.gov/TotalAssist (last accessed Dec. 2, 2020); CBO, Monthly Budget Review: Summary for Fiscal Year 2020, https://www.cbo.gov/publication/56746#section1 (Nov. 9, 2020).

13/ Biden Harris, Health Care, https://joebiden.com/healthcare/# (last accessed Dec. 3, 2020).

14/ 78 Fed. Reg. 42160.

15/ CMS, Medicaid Program; Medicaid Managed Care: New Provisions, RIN 0938-AK96, 67 Fed. Reg. 40989 - 41116 (June 14, 2002), https://www.cms.gov/Regulations-and-Guidance/Regulations-and-Policies/QuarterlyProviderUpdates/downloads/cms2104f.pdf.

16/ CMS, Medicaid and Children's Health Insurance Program (CHIP) Programs; Medicaid Managed Care, CHIP Delivered in Managed Care, Medicaid and CHIP Comprehensive Quality Strategies, and Revisions Related to Third Party Liability; Proposed Rules, RIN 0938-AS25, 80 Fed. Reg. 31098-31296 (June 1, 2015), https://www.federalregister.gov/documents/2015/06/01/2015-12965/medicaid-and-childrens-health-insurance-program-chip-programs-medicaid-managed-care-chip-delivered.

17/ CMS, Medicaid and Children's Health Insurance Program (CHIP) Programs; Medicaid Managed Care, CHIP Delivered in Managed Care, Medicaid and CHIP Comprehensive Quality Strategies, and Revisions Related to Third Party Liability; Final Rule, RIN 0938-AS25, 80 Fed. Reg. 27498-27901 (May 6, 2016), https://www.federalregister.gov/documents/2016/05/06/2016-09581/medicaid-and-childrens-health-insurance-program-chip-programs-medicaid-managed-care-chip-delivered.

18/ CMS, Medicaid Program; Medicaid and Children's Health Insurance Program (CHIP) Managed Care (Final Rule), RIN 0938-AT40, 85 Fed. Reg. 72754-72844, 72754 (Nov. 13, 2020), https://www.govinfo.gov/content/pkg/FR-2020-11-13/pdf/2020-24758.pdf.

19/ 85 Fed. Reg. 70099, 70106.

20/ 5 U.S.C. 610(a) (In the case of the RFA, periodically is defined as 10 years, unless such review is not feasible, in which case the review can be extended another 5 years).

21/ 5 U.S.C. Sec. 551(5);see also Maeve P. Carey, Specialist in Government Organization and Management, Can a New Administration Undo a Previous Administration's Regulations?, Congressional Research Service (Nov. 21, 2016), https://fas.org/sgp/crs/misc/IN10611.pdf ("In short, once a rule has been finalized, a new administration would be required to undergo the rulemaking process to change or repeal all or part of the rule."); Office of Information and Regulatory Affairs, Office of Management and Budget, The Reg Map 5 (2020) (noting that "agencies seeking to modify or repeal a rule" must follow the same rulemaking process they would under the APA).

22/ 85 Fed. Reg. 70104, fn 85 & 86, citing to separate, specific rulemakings modifying interim final rules implementing mental health parity and foreign quarantine provisions, respectively.

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The proposed rule can be viewed at: https://www.regulations.gov/document?D=HHS-OS-2020-0012-0001

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