FR 2021-00597

The Department of Health and Human Services (HHS) has introduced a final rule requiring most of its regulations to be reviewed every ten years or face automatic expiration. This measure aims to ensure regulations remain current and effective in today's quickly changing environment.

Summary

The final rule from HHS mandates periodic reviews of its regulations, setting automatic expiration dates for those not reviewed within ten years. The rule intends to keep HHS regulations up-to-date and eliminate obsolete regulations. However, there are notable exemptions, including regulations mandated by federal law and those subject to annual updates, like the Medicare payment rules.

Significant Issues and Concerns

One of the primary concerns surrounding this rule is its potential cost and administrative burden. Some commenters have pointed out that the retrospective analysis could be as demanding as the regulatory analysis conducted before a rule's initial implementation. The implementation relies heavily on artificial intelligence tools to make assessments, which could be a concern if these AI methods lack transparency or public scrutiny.

Furthermore, there is ambiguity around the definition of "significant economic impact upon a substantial number of small entities." This could lead to inconsistencies in applying the rule. The potential for regulatory uncertainty also looms large. There might be challenges in timely reviewing regulations before they automatically expire, leading to unintended consequences if important rules lapse.

Impact on the Public

This rule might broadly impact the public by potentially increasing the efficiency and relevance of health-related regulations. By regularly reviewing existing rules, HHS aims to maintain regulations that are beneficial and necessary while discarding or amending those that are not. However, if crucial regulations accidentally expire, there could be significant negative consequences for healthcare delivery and access.

Impact on Specific Stakeholders

Small Businesses and Organizations: These stakeholders might experience relief from regulations that are unnecessarily burdensome. The review process explicitly considers the impact on small entities, which may reduce compliance costs for these groups.

Regulated Communities: Entities such as hospitals and healthcare providers could face uncertainty regarding which regulations will remain in effect. The potential for regulations to lapse inadvertently during the review cycle could impede operational planning and compliance efforts.

State and Local Governments: There is concern about potential downstream impacts on these entities, particularly if crucial federal regulations expire. This might lead to increased compliance challenges and complexities within local governance structures.

In conclusion, while the rule aims to modernize and optimize HHS regulations, its implementation poses significant challenges and impacts that need careful consideration by all affected stakeholders.

The document outlines the financial implications of the final rule, emphasizing costs associated with its implementation. The Department of Health and Human Services (HHS) has provided detailed cost estimates and financial analyses to justify and plan for the rule's enforcement.

Summary of Financial References

The costs related to the implementation are varied and include expenses for both the initial and ongoing assessment and review processes. The estimated total monitoring costs for the public over ten years range from $52.2 million to $156.7 million using a 7% discount rate, or $58.8 million to $176.3 million when using a 3% discount rate. These costs are associated with ensuring compliance and updating regulations as necessary.

The Department also anticipates incurring specific internal costs, such as employing personnel to conduct Reviews or Assessments. The fully-loaded cost per hour for such personnel is estimated at $244.98. Depending on how many hours are needed (between 23,360 to 52,900 estimated hours), this could amount to a total cost between $4.7 million to $10.6 million over the first five years.

Financial allocations also include considerations for certain groups, with American Indian or Alaska Native populations potentially bearing a proportion of these monitoring costs—estimated at around $887,400 to $2.66 million over ten years with a 7% discount rate.

Relation to Identified Issues

Several financial concerns tie directly into the substantive issues identified in the document:

Cost Underestimation: Some commenters suggest that the costs associated with retrospective analysis could be understated. The expansive range in the total cost estimates (from $60.2 million to $199.3 million over ten years) indicates a potential variability in actual expenses based on administrative efficiencies or inefficiencies encountered during implementation.

Administrative Burden: The financial overview suggests a significant administrative burden due to the costs related to employing professionals for regulation reviews. This aligns with concerns over the rule's impact on administrative processes and resources.

Regulatory Uncertainty: The potential high costs of overdue or unreviewed regulations could lead to regulatory uncertainty. Ensuring timely reviews within the outlined budget constraints could become challenging, especially if the financial outlay becomes unsustainable without additional funding.

Transparency and Public Participation Costs: The projected costs of monitoring and commenting by the public reflect potential barriers to transparent public involvement, as some commentaries are considered through departmental or electronic channels rather than traditional ones like the Federal Register.

Potential State and Local Government Impacts: The discussed financial implications underscore potential downstream effects on state and local budgets, escalating legal and compliance costs particularly if key federal regulations expire or change significantly.

Overall, the document reflects careful consideration of financial implications, yet raises valid concerns about potential administrative burdens, costs, and the uncertainty inherent in such a sweeping regulatory review process.