Northwest Health Law Advocates Issues Public Comment on HHS Proposed Rule

WASHINGTON, Dec. 19 -- Janet Varon, executive director, and Emily Brice, senior attorney and policy advisor, at the Northwest Health Law Advocates, Seattle, Washington, have 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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On behalf of Northwest Health Law Advocates (NoHLA), we write to comment on the Department of Health and Human Services' (HHS) proposed rule "Securing Updated and Necessary Statutory Evaluations Timely" (hereinafter referred to as the "Regulations Rule").

NoHLA is a nonprofit legal advocacy organization whose mission is to ensure that all Washington State residents have access to quality, affordable health care. NoHLA strongly opposes the proposed rule, which would harm nearly every Washington resident by retroactively imposing a blunt expiration provision on HHS regulations that are critical to their health and well-being.

The Regulations Rule is an ill-conceived proposal that would create tremendous administrative burden for HHS while wreaking havoc across a broad swath of HHS programs that cover millions of Washington residents (such as Medicaid, Medicare, the Health Benefit Exchange, and the Indian Health Service), as well as programs necessary for public health and safety (such as the Centers for Disease Control and Prevention and the Food and Drug Administration). We also strongly object to the truncated 30-day comment period, which is insufficient for a rule of this broad scope with potentially harmful effects. We urge HHS to immediately withdraw this proposed rule, and instead focus its attention on urgent health care needs in the ongoing pandemic and economic crisis.

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, like 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.

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 nearly 2 million Washington State residents, including 864,000 children./4

In Washington, HHS regulations also play an essential role in recognizing the sovereign role of 29 federally-recognized tribes, as existing regulations have been developed in careful consultation and negotiation with tribes./5

A strong regulatory framework provides states the clarity they need to manage these programs and sovereign relationships on a day-to-day basis, gives providers and managed care plans guidance as to their obligations, and explains to beneficiaries what their entitlement means. 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 consumer 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 for the $4.2 Billion in federal funds that flow to Washington State for these insurance affordability 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./6

In 2015, CMS published a Notice of Proposed Rulemaking to update and modernize Medicaid managed care regulations./7

CMS took nearly a year to review and consider the 875 comments submitted, publishing the final rulemaking in May 2016./8

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."/9

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

We particularly object to HHS' citation to Washington State in the proposed rule in support of its proposed rule./14

While the Washington State Legislature encouraged certain agencies to develop a stronger regulations review proposal in 2013, it did not establish the kind of automatic expiration process or unreasonable timeframe HHS proposes here. It is inappropriate for HHS to cite to this local experience in the states, which was tailored to a particular time and place, as justification for sweeping changes at an agency whose regulations affect the health of every person in the country.

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. We strongly oppose this rule, and urge HHS to withdraw it immediately.

Thank you for the opportunity to comment on this important issue.

Sincerely,

Janet Varon, J.D., Executive Director

Emily Brice, J.D., Senior Attorney and Policy Advisor

Northwest Health Law Advocates

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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/ Washington State Health Care Authority, "Client Eligibility Dashboard" (access Dec. 4, 2020), available at: www.hca.wa.gov/about-hca/client-eligibility-data-dashboard.

5/ See HHS Department Policy on Tribal Consultation, www.hhs.gov/sites/default/files/iea/tribal/tribalconsultation/hhs-consultation-policy.pdf.

6/ 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-andPolicies/QuarterlyProviderUpdates/downloads/cms2104f.pdf.

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; 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-insuranceprogramchip-programs-medicaid-managed-care-chip-delivered.

8/ 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-insuranceprogramchip-programs-medicaid-managed-care-chip-delivered.

9/ 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-2020-1113/pdf/2020-24758.pdf.

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.

14/ 85 Fed. Reg 70102.

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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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