On August 20, 2020 the Department of Health and Human Services (HHS) published a notice of proposed rulemaking (85 Fed. Reg. 51397) on good practices for the release and maintenance of agency guidance documents. Comments must be posted by 11:59 pm on September 16, 2020.
As instructed in the October 9, 2019 Executive Order 13891 (EO), titled ‘‘Promoting the Rule of Law Through Improved Agency Guidance Documents (84 FR 55235 (Oct. 15, 2019)), HHS proposes to issue regulations to ensure (i) there is proper notice of any new guidance, and (ii) that the guidance does not impose obligations on regulated parties that are not already reflected in duly enacted statutes or regulations.
This proposed rule appears to follow the Office of Management and Budget, “Final Bulletin for Agency Good Guidance Practices,” issued on January 25, 2007 (72 Fed. Reg. 3432) with respect to the significant guidance document that may, for example “adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities” or “materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof” and generally requires a 30 day notice and comment period.
The Administrative Procedure Act (‘‘APA’’), 5 U.S.C. 551 et seq., mandates that rules proposing new obligations on regulated parties must go through notice and comment rulemaking; however, non-binding guidance documents, such as interpretive rules and statements of policy, do not require notice and comment rulemaking. The EO explained that “agencies have sometimes used [the non-binding guidance] authority inappropriately in attempts to regulate the public without following the rulemaking procedures of the APA.”
This proposed HHS rule states that it is designed to increase accountability, improve the fairness of guidance issued by HHS, guard against unlawful regulation through guidance, and safeguard the important principles underlying the United States administrative law system.
According to the proposed rule, a guidance document may not establish a new legal obligation, which is not already reflected in a statute or regulation, for individuals outside of the federal government. Each guidance document must include: (i) a disclaimer that the document does not have the force and effect of law and is intended to “provide clarity” to the public regarding existing requirements under the law; (ii) to what activities and to whom applies;(iii) date of issuance; (iv) unique identifier; (v) whether document replaces or revises an existing guidance; (vi) citation to the pertinent statutory and regulatory provisions; and (vii) short summary of the subject matter covered in the guidance. The proposed rule also provides an extensive list of what a guidance document does not include, including rules promulgated pursuant to the notice and comment requirement under 5 U.S.C. 553, or similar statutory provisions; rules of agency organization, procedure, or practice; and internal guidance directed to HHS or other agencies that is not intended to have substantial future effect on the behavior of regulated parties.
The proposed rule also defines a significant guidance document, which is a guidance document that may reasonably be anticipated to have a significant impact that:
- leads to an annual effect on the economy of $100 million or more, or adversely affects in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;
- creates a serious inconsistency or otherwise interferes with an action taken or planned by another agency;
- materially alters the budgetary impact of entitlements, grants, user fees, or loan programs or the rights or obligations of recipients thereof;
- or raises novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles of Executive Order 12866.
Before issuing any significant guidance document, HHS would have to submit the significant guidance document to Office of Information and Regulatory Affairs (OIRA) for review under Executive Order 12866 and provide a 30-day public notice and comment period by issuing it in the Federal Register and the online guidance repository, unless HHS finds good cause that a notice and comment period are impracticable, unnecessary, or contrary to the public interest. Additionally, the proposed rule states that the “significant guidance document may be exempted from any requirement otherwise applicable to significant guidance documents if the Secretary and the Administrator of OIRA agree that exigency, safety, health, or other compelling cause warrants the exemption.” The Secretary would have to make this finding, which would have to be incorporated into the guidance with a brief statement of reasons in support.
HHS proposes to make all of its guidance documents available at an online guidance repository (www.hhs.gov/guidance). If HHS does not include a guidance document in the guidance repository by November 2, 2020, according to the proposed rule, the guidance document shall be considered rescinded. All guidance in the repository must be labeled with “Lack the force and effect of law, except as authorized by law or as specifically incorporated into a contract.” Also, HHS “may not cite, use, or rely on any guidance that is not posted on the repository, except to establish historical facts.” Any guidance posted after the effective date of final rule would have to be posted on the guidance repository website within three days of issuing. Regarding significant guidance documents issued after the final rule is effective, HHS would have to publish them on the guidance repository website as part of the notice and comment process with appropriate instructions for public to submit comments. All responses would be posted online by HHS.
Finally, the proposed rule sets forth the procedure to petition for review of any guidance, asking HHS to modify or withdraw a guidance document through this process. Basis for review includes whether (i) a guidance document imposes binding obligations on parties beyond applicable statute or regulation; (ii) a component of HHS is using guidance to create additional legal obligation; or (iii) HHS is improperly exempting a guidance from requirements set forth in the proposed rule. The guidance repository would set clear instructions for the public regarding how to petition for review of guidance. HHS would have to respond to all petitions in 90 business days; however, this timetable would be suspended if (i) HHS requested additional information from the requestor until HHS received the requested information or (ii) if HHS informed the requestor that it needs to consult with other stakeholders, e.g., Department of Justice or HHS Office of Inspector General. All responses to petitions would be published one a webpage on its guidance repository.
While this will aid entities in identifying relevant guidance and provide for an opportunity to comment, it may also add time to publication of guidance that is needed by industry. For example, health care providers, health plans, and technology companies have been working to comply with the recent interoperability and patient access regulations and the new provisions on information blocking, therein, and have been asking for HHS to publish guidance to address ambiguities that are impacting compliance efforts. This will provide a process for such guidance, but likely not before the November 2, 2020 compliance date for the information blocking rules. Furthermore, while there is a proposed process for publishing new guidance and reconsidering guidance on request, there is no process for effectively rescinding longstanding guidance with no notice or opportunity to comment, by simply failing to include such guidance in the repository within the timeline specified. This could upset longstanding compliance programs whereby an organization reasonably relied upon such guidance and an organization would have no knowledge of such agency action, unless it searched for each such guidance document in the repository.