Center for Law & Social Policy Issues Public Comment on HHS Proposed Rule

WASHINGTON, Dec. 19 -- Suzanne Wikle, project director and senior policy analyst at the Center for Law and Social Policy, 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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I am writing on behalf of the Center for Law and Social Policy (CLASP). CLASP is a national, nonpartisan, anti-poverty nonprofit advancing policy solutions for low-income people. We work at both the federal and state levels, supporting policy and practice that makes a difference in the lives of people living in conditions of poverty. These comments draw on CLASP's deep experience with public programs administered by the Department of Health and Human Services (HHS), including Temporary Assistance for Needy Families (TANF), the Child Care and Development Fund (CCDF), and Medicaid.

We appreciate the opportunity to provide comments on HHS' proposed rule, "Securing Updated and Necessary Statutory Evaluations Timely" (hereinafter referred to as the "Regulations Rule"). While we appreciate the opportunity to comment on the Regulations Rule, we strongly object to the shortened 30-day comment period. HHS provides no justification for the shortened comment period. HHS should extend this comment period by at least an additional 60 days.

The proposed rule would retroactively impose an expiration provision on most HHS regulations, and establish "assessment" and "review" procedures to determine which, if any, regulations should be retained or revised. The Regulations Rule is an ill-conceived proposal that would create tremendous administrative burden for HHS and would wreak havoc across a broad swath of Department programs and regulated entities, including Medicaid, CCDF and TANF. We urge HHS to immediately withdraw this proposed rule.

The proposed rule would create tremendous administrative burden for HHS

HHS asserts that the Regulations Rule will promote "accountability, administrative simplification [and] transparency. . . ."/1

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./2

Within the first two years, HHS estimates the need to assess at least 12,400 regulations that are over 10 years old./3

However, these estimates likely underestimate the time and money involved in the review process, and do not accurately account for complications that may arise.

The Regulations 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. In addition, several regulations implementing important parts of the Affordable Care Act are approaching their ten-year anniversary, such as the Medicaid cost-sharing rule. 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.

In addition to the cost-sharing rule, rules outlining requirements for Medicaid enrollment and renewal would also need to be reviewed in order to avoid expiration. If these rules were allowed to expire because of the Regulation Rule, it would create chaos among state agencies with regard to how they must process Medicaid renewals, what data they can access electronically for applications and renewals, and the methods by which applications must be available.

Medicaid is filling a crucial need during the COVID-19 pandemic by providing health coverage to millions of people who would otherwise be uninsured, either because they work in low wage jobs without health benefits or because they have become unemployed due to the economic downturn. Not having Medicaid cover millions would lead to worse health outcomes, and also incredible costs to the public and private systems. The capacity of HHS should be to focus on how to maintain and enhance Medicaid to serve as an even greater safety-net during the COVID-19 pandemic. The proposed rule would have the opposite effect, diverting the agency's time and attention away from proactive work to ensuring that damage is not done.

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. Other safety-net programs administered by HHS include TANF and the Child Care and Development Fund. These programs help families meet their basic needs, including providing cash assistance and paying for child care. States are making extensive efforts to maintain the administration of these programs during unprecedented challenges brought on by the COVID-19 pandemic. Creating any sort of federal uncertainty about the rules governing these programs will potentially have unintended consequences at the state level, jeopardizing benefits for eligible families.

A strong regulatory framework provides states the clarity they need to run these programs on a day-to-day basis, gives providers guidance as to their obligations, and explains to beneficiaries what their benefits mean. The Regulations Rule would create legal uncertainty regarding the validity and enforceability of regulations throughout the review process.

The bigger danger posed by the Regulations 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. States would still be subject to the statutory penalties for failure to operate their TANF programs appropriately, but would be left without guidance as to how HHS would make this determination, or how they could qualify for penalty reduction based on either the extent of failure or external factors, such as the pandemic. CCDF regulations provide another example--regulations regarding state matching expenditures are more than 10 years old./4

These regulations added additional flexibility to state funding of child care, enabling states to more easily meet their matching requirements and ensure they are drawing down all available funds to serve families. Arbitrarily rescinding these regulations on CCDBG will likely reduce the number of families served, which is especially harmful at a time when state budgets are stretched as they are during COVID. 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 Regulations 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./5

In 2015, CMS published a Notice of Proposed Rulemaking to update and modernize Medicaid managed care regulations./6

CMS took nearly a year to review and consider the 875 comments submitted, publishing the final rulemaking in May 2016./7

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."/8

Similarly, in 2016 HHS revised the regulations governing CCDF to implement the changes made by the 2014 Child Care and Development Block Grant reauthorization. The rulemaking process took nearly two years and incorporated input from a wide variety of stakeholders including state officials and members of Congress. The regulation was deemed necessary by HHS to support state implementation of sweeping changes in the federal law designed to protect the health and safety of children in child care; help parents make informed consumer choices and access information to support child development; provide equal access to stable, high-quality child care for low-income children; and enhance the quality of child care and the early childhood workforce. Without these regulations, states would have less guidance to meet the goals of the reauthorization. HHS also revised the regulations governing the child support program in 2016, not as the result of a specific statutory change, but in order to make programs more flexible, effective and efficient./9,/10

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."/11

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./12

HHS states it has authority under the APA to add end dates, or conditions whereby a previously promulgated rule would expired./13

We do not dispute that federal agencies can later amend existing regulations. However, the Regulations 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 Regulations Rule is simply an attempt to sabotage and destroy duly promulgated regulations, by retroactively imposing an arbitrary end date to duly promulgated regulations. This rule is 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. CLASP strongly opposes this rule, and we urge HHS to withdraw it immediately.

Thank you for the opportunity to comment on this important issue. If you have further questions, you may contact me at [email protected].

Sincerely,

Suzanne Wikle

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Footnotes:

1/ 85 Fed. Reg. 70104.

2/ 85 Fed. Reg. 70116.

3/ 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.

4/ https://www.acf.hhs.gov/sites/default/files/occ/e7_9626.pdf

5/ 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.

6/ 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.

7/ 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.

8/ 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.

9/ 81 Fed. Reg. 93492

10/ 85 Fed. Reg. 70099, 70106.

11/ 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).

12/ 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).

13/ 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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