Department of Health and Human Services Good Guidance Practices, 78770-78787 [2020-26832]

Agencies

• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 85, Number 235 (Monday, December 7, 2020)]
[Rules and Regulations]
[Pages 78770-78787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26832]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 1

RIN 0991-AC17


Department of Health and Human Services Good Guidance Practices

AGENCY: Office of the Secretary, Department of Health and Human 
Services.

ACTION: Final rule.

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SUMMARY: The Department of Health and Human Services finalizes its 
proposed regulations governing the agency's release and maintenance of 
guidance documents. These regulations will help to ensure that the 
public receives appropriate notice of new guidance and that the 
Department's guidance does not impose obligations on regulated parties 
that are not already reflected in duly enacted statutes or regulations 
lawfully promulgated under them.

DATES: This final rule is effective January 6, 2021.

FOR FURTHER INFORMATION CONTACT: Brenna Jenny, Department of Health and 
Human Services, 200 Independence, Avenue SW, Room 713F, Washington, DC 
20201. Email: [email protected]. Telephone: (202) 690-7741.

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Background

    Subject to certain exceptions, the Administrative Procedure Act 
(``APA''), 5 U.S.C. 551 et seq., mandates that rules imposing new 
obligations on regulated parties must go through notice-and-comment 
rulemaking. See, e.g., Chrysler Corp. v. Brown, 441 U.S. 281, 302 
(1979). This is true regardless of whether agencies frame these rules 
as sub-regulatory guidance. See, e.g., Iowa League of Cities v. EPA, 
711 F.3d 844, 875 (8th Cir. 2013); Gen. Elec. Co. v. EPA, 290 F.3d 377, 
385 (D.C. Cir. 2002). The APA's procedural requirements sound in 
notions of good governance. See, e.g., Smiley v. Citibank (S.D.), N.A., 
517 U.S. 735, 741 (1996). Agencies can generally issue interpretive 
rules and statements of policy without conducting notice-and-comment 
rulemaking,\1\ although such sub-regulatory guidance lacks the force 
and effect of law, and cannot bind regulated parties. See, e.g., 
Shalala v. Guernsey Mem'l Hosp., 514 U.S. 87, 99 (1995).
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    \1\ But see Azar v. Allina Health Servs., 139 S. Ct. 1804 
(2019).
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    To promote the appropriate issuance and use of guidance documents, 
and consistent with the requirements of Executive Order 13891, 
``Promoting the

[[Page 78771]]

Rule of Law Through Improved Agency Guidance Documents,'' 84 FR 55,235 
(Oct. 15, 2019), the United States Department of Health and Human 
Services (``HHS'' or ``the Department'') proposed regulations that set 
forth good guidance practices. This good guidance practices rule is one 
component of the Department's broader regulatory reform initiative.\2\ 
The final rule is designed to increase accountability, improve the 
fairness of guidance issued by the Department, guard against unlawful 
regulation through guidance, and safeguard the important principles 
underlying the United States administrative law system.
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    \2\ See, e.g., HHS, FY 2020 Annual Performance Plan and Report--
Regulatory Reform, https://www.hhs.gov/about/budget/fy2020/performance/regulatory-reform/.
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II. Provisions of the Proposed Rule and Analysis of and Response to 
Public Comments

    In the August 20, 2020 Federal Register (85 FR 51,396), HHS 
published a proposed rule titled ``Department of Health and Human 
Services Good Guidance Practices'' (hereinafter, ``Good Guidance 
Practices proposed rule''). In response to the publication of that 
proposed rule, HHS received 88 comments from industry trade 
organizations, patient advocacy groups, providers, health insurers, 
manufacturers, a law firm, and members of the public. HHS published a 
correction to this proposed rule on August 26, 2020 (85 FR 52,515) 
updating certain proposed effective dates. In the following sections of 
this final rule, HHS includes a summary of the provisions of the August 
20, 2020 proposed rule, the public comments received, HHS's responses 
to the comments, and any changes made to the regulatory text as a 
result.
    Comment: Several commenters viewed the 30-day comment period (which 
began on August 17, 2020, the day that the Federal Register publicly 
displayed the proposed rule) as too short, and they requested a longer 
comment period.
    Response: HHS respectfully disagrees with these commenters and 
continues to view a 30-day comment period as adequate for this notice 
of proposed rulemaking. The proposed rule, at only six pages in the 
Federal Register, is not lengthy. Neither the APA nor any other statute 
requires a longer comment period for the proposed rule. Instead, the 
APA merely requires that ``[a]fter notice required by this section, the 
agency shall give interested persons an opportunity to participate in 
the rule making through submission of written data, views, or arguments 
with or without opportunity for oral presentation.'' This standard was 
met here. Indeed, the fact that the Department received 88 comments 
from a broad cross-section of interested parties, including many trade 
organizations representing numerous stakeholders, confirms that the 
public had ample time to participate in this rulemaking.

A. Scope (Sec.  1.1)

    HHS proposed to add 45 CFR 1.1, stating that the requirements to be 
established pursuant to the proposed rule would apply to all guidance 
documents issued by all components of the Department, except for the 
Food and Drug Administration (``FDA''), which has its own good guidance 
practices regulations that the Secretary plans to amend to conform 
those regulations to the requirements of Executive Order 13891. FDA 
currently operates under a set of good guidance practices regulations, 
see 21 CFR 10.115, as required by the Federal Food, Drug, and Cosmetic 
Act (FDCA), 21 U.S.C. 371(h), but no other division within HHS operates 
under a similar set of regulations.
    Comment: One commenter urged HHS to amend FDA's good guidance 
practices regulations to be consistent with the requirements in the 
proposed rule.
    Response: HHS agrees. The Secretary still plans to amend FDA's good 
guidance practices regulations, issued as required by the Federal Food, 
Drug, and Cosmetic Act, 21 U.S.C. 371(h), to conform to the 
requirements of Executive Order 13891. However, such amendments have 
not proceeded in parallel with the Department's broader regulation. 
Accordingly, in order to avoid significant disparities between the 
rules around guidance that apply to FDA and the rest of the Department, 
this final rule clarifies that FDA must comply with all requirements 
implemented in this HHS Good Guidance Practices final rule--to the 
extent not already incorporated in the FDA good guidance practices 
regulations--until the Secretary issues a final rule amending FDA's 
good guidance practices regulations. Primary provisions of this Good 
Guidance Practices final rule that are not already incorporated into 
FDA's good guidance practices include, but are not limited to, the 
requirement that guidance documents issued after the effective date of 
this rule include a disclaimer clarifying that the contents do not have 
the force and effect of law (unless the FDCA or other statute 
authorizes the issuance of binding guidance), as well as the 
information fields specified at 45 CFR 1.3(a)(3)(iii); the requirement 
that all significant guidance documents be issued only following a 
public notice and comment period (unless an exemption applies); that 
all guidance documents be included in the HHS guidance repository and 
if not, they will be considered rescinded; and that all FDA guidance 
documents shall be subject to the petition process at 45 CFR 1.5.
    Comment: One commenter suggested that the final rule exempt Centers 
for Medicare & Medicaid Services (CMS) guidance documents from being 
within the rule's scope, just as HHS had proposed to exempt FDA 
guidance documents from the scope of the rule.
    Response: HHS declines to exempt CMS guidance documents from the 
scope of the Good Guidance Practices final rule. No division of the 
Department will be operating in a manner inconsistent with the 
important protections contained in this final rule. As HHS explained in 
the proposed rule, FDA has long operated under its own set of good 
guidance practices regulations, and as this final rule clarifies, FDA 
will be subject to the requirements of this Good Guidance Practices 
final rule until the Secretary amends FDA's own good guidance practices 
regulations to conform to the requirements of Executive Order 13891.
    HHS is finalizing the proposed scope of this rule but clarifying 
that until the Secretary amends FDA's own good guidance practices 
regulations, FDA will be subject to the requirements in this Good 
Guidance Practices final rule. After the Secretary amends FDA's good 
guidance practices regulations, this rule will, as proposed, apply to 
all guidance documents issued by HHS except for guidance documents 
issued by FDA.

B. Definitions (Sec.  1.2)

1. Guidance Document
    HHS proposed that the HHS Good Guidance Practices regulations would 
apply to all guidance documents and proposed to define the term 
``guidance document'' as any Department statement of general 
applicability which is intended to have future effect on the behavior 
of regulated parties and which sets forth a policy on a statutory, 
regulatory, or technical or scientific issue, or an interpretation of a 
statute or regulation. In the proposed rule, HHS explained that the 
contents of a transmission, rather than its format, dictates whether it 
would constitute a guidance document; guidance would

[[Page 78772]]

not need to be in the form of a formal written document to constitute a 
``guidance document.'' The hallmark of guidance is that it includes 
statements of general applicability intended to govern the future 
behavior of regulated parties. Thus, HHS proposed that agency releases 
of technical or scientific information by itself would not constitute 
guidance unless the release also contains a policy on, or related to, 
technical or scientific information that is intended to affect the 
future behavior of regulated parties. However, HHS clarified that the 
Good Guidance Practices regulations would not require HHS to justify 
the quality of information; regulated parties and other stakeholders 
should use existing mechanisms to address the quality of information 
contained in documents issued by HHS.
    Materials directed to government employees or agency contractors, 
rather than regulated parties, would also generally not constitute 
guidance within the meaning of this proposed rule. Similarly, most 
agency statements communicating news updates about the agency would not 
constitute guidance. Agency statements of specific applicability--such 
as advisory or legal opinions directed to particular parties about 
circumstance-specific questions; notices regarding particular 
locations, facilities, or products; and correspondence with individual 
persons or entities, including congressional correspondence or notices 
of violation--would also generally not be ``guidance.''
    HHS proposed that certain categories of documents would be excluded 
from the term guidance document: Rules promulgated pursuant to notice 
and comment under 5 U.S.C. 553 or similar statutory provisions; rules 
exempt from rulemaking requirements under 5 U.S.C. 553(a); rules of 
agency organization, procedure, or practice; decisions of agency 
adjudications under 5 U.S.C. 554 or similar statutory provisions; 
internal guidance directed to the Department or other agencies that is 
not intended to have substantial future effect on the behavior of 
regulated parties; internal executive branch legal advice or legal 
opinions addressed to executive branch officials; legal briefs and 
other court filings; grant solicitations and awards; or contract 
solicitations and awards.
    HHS proposed that whether a document would be exempt as a rule of 
agency organization, procedure, or practice is a functional test. 
Documents that are designed to shape the behavior of the Department 
would be exempt; documents designed to shape the behavior of regulated 
parties would be considered guidance if they also set forth a policy on 
a statutory, regulatory, or technical or scientific issue, or an 
interpretation of a statute or regulation.
    Pre-enforcement rulings, which are formal written communications 
applying the law to a specific set of facts (as opposed to making 
statements of general applicability) would also not constitute guidance 
documents under the proposed rule. Examples include letter rulings, 
advisory opinions directed to a specific party, and no-action letters. 
But material embedded within an advisory opinion or similar letter that 
otherwise satisfies the definition of ``guidance document'' would still 
be guidance for purposes of this rule. If a document addressed to 
specific individuals nonetheless contains a statement of general 
applicability setting forth a relevant policy or interpretation that is 
intended to have future effect by guiding the conduct of other 
regulated parties, then the document would be a guidance document.
    Consistent with its existing responsibilities, HHS proposed that 
the HHS Office of the General Counsel (``OGC''), after discussing with 
senior officials within the Department, would make the legal 
determination of whether a document is excluded from the term 
``guidance document'' and whether a purported guidance document is, in 
fact, a legislative rule that must go through notice-and-comment 
rulemaking. OGC would continue to determine whether certain guidance 
relating to Medicare should nonetheless go through notice-and-comment 
rulemaking as a result of the Supreme Court's decision in Azar v. 
Allina Health Services, 139 S. Ct. 1804 (2019).
    HHS received the following comments on the proposed definition of 
``guidance document.''
    Comment: Several commenters thought that the definition of 
``guidance'' as materials ``intended to have future effect'' was too 
vague and confusing because it would be difficult to determine the 
Department's ``intent'' in its issuance of a document in order for 
affected parties to determine whether it is intended to govern the 
future behavior of regulated parties. Some commenters also noted that 
regulated parties may also rely on internal agency documents in guiding 
their future conduct, and thus these documents should not be exempt 
from being considered ``guidance documents.'' A small number of 
commenters suggested that rather than use the phrase ``sets forth a 
policy,'' the definition of guidance document should say ``sets forth 
an expectation.''
    Response: The phrase ``intended to have future effect'' is not a 
subjective test of an agency official's thought processes, but rather, 
is an objective test to be applied when reviewing the face of a 
guidance document. For example, a document satisfies this standard when 
it provides information in a manner that can be reasonably interpreted 
as designed to encourage regulated entities to voluntarily take certain 
actions. This definition is consistent with the Office of Management 
and Budget's (``OMB's'') longstanding definition of guidance as ``an 
agency statement of general applicability and future effect . . . that 
sets forth a policy on a statutory, regulatory, or technical issue or 
an interpretation of a statutory or regulatory issue,'' where ``future 
effect'' means the ``intended . . . impacts due to voluntary compliance 
with a guidance document.'' See OMB Bulletin 07-02, ``Agency Good 
Guidance Practices,'' 72 FR 3432, 3434-35 (Jan. 25, 2007). HHS has no 
basis for believing that regulated parties have found this definition 
confusing in the past and therefore is incorporating a very similar 
definition in this final rule. It believes that the phrase ``sets forth 
an expectation'' is captured by the phrase ``intended to have future 
effect.'' HHS agrees with the commenters who noted that internal agency 
documents can sometimes constitute guidance documents if they are 
designed to guide the conduct not just of agency officials, but also 
regulated parties, and it reiterates that whether a document is 
properly considered a ``guidance document'' under this rule is a 
functional test.
    Comment: Several commenters thought that the definition of 
``guidance'' was too vague and confusing, because categorization of a 
statement as guidance rests not on the format, but on the content of 
the communication, such that they believed that ``guidance'' could be 
contained ``within nonguidance.'' These commenters also asserted that 
the final rule should require OGC to publicly release its analyses of 
whether a document is a guidance document, ``nonguidance document'' or 
``nonguidance'' within a guidance document. A few commenters stated 
that the definition of ``guidance'' is too vague because the proposed 
rule did not explain how the term ``guidance document'' will be defined 
in the context of Medicaid, CHIP, and other programs administered by 
CMS.
    Response: HHS clarifies that guidance is not embedded in 
``nonguidance.'' Rather, if a document that would generally fall 
outside of the definition of

[[Page 78773]]

guidance, e.g., a document of specific applicability, such as an 
advisory opinion, contains a statement of general applicability setting 
forth a relevant policy or interpretation that is intended to govern 
the future behavior of regulated parties--in other words, contains 
guidance--then the entire document would constitute a guidance document 
under this rule. As a result, there is no need to designate certain 
parts of documents as guidance and other parts ``nonguidance.'' See 
also 85 FR at 51,397 (``If a document addressed to specific individuals 
nonetheless contains a statement of general applicability setting forth 
a relevant policy or interpretation that is intended to have future 
effect by guiding the conduct of other regulated parties, then the 
document would be a guidance document.'' (emphasis added)). With 
respect to the suggestion that HHS OGC publicly post its analysis of 
whether material constitutes ``guidance,'' HHS declines to incorporate 
this requirement. Whether material constitutes ``guidance'' is a legal 
question and as such, HHS OGC's internal analyses of these questions 
will generally be privileged and confidential. Furthermore, HHS OGC 
does not have the resources to prepare formal written analyses of every 
single document that potentially constitutes guidance. If an interested 
party has a question about whether a document is properly considered 
guidance, the interested party could petition the agency under the 
process set forth in Sec.  1.5, and HHS OGC will work with the relevant 
operating division to prepare a non-privileged public response.
    HHS believes the proposed rule provided sufficient information 
about how the Department proposed to define the term ``guidance 
document.'' It was not feasible for HHS, in the proposed rule preamble, 
to specifically articulate how the term ``guidance document'' will be 
applied in each program implemented by HHS. Further, this proposed term 
builds on OMB's longstanding definition of guidance document and OMB's 
Final Bulletin on Agency Good Guidance Practices, to which HHS cited in 
the preamble to the proposed rule. See 85 FR at 51,396. This context, 
in combination with HHS's own preamble discussion about the term, 
provided commenters with significant detail about the proposed 
definition.
    Comment: A few commenters asked HHS to clarify the meaning of the 
term ``regulated party'' within the definition of ``guidance 
document.'' One commenter asked that HHS clarify that ``regulated 
parties'' include States or state agencies.
    Response: ``Regulated party'' is a broad term that covers any 
person or entity that is subject, or potentially subject, to the 
regulatory authority of any division of HHS. HHS agrees that States and 
state agencies can be ``regulated parties'' for purposes of this rule, 
such as in the context of guidance documents relating to the Medicaid 
program.
    Comment: One commenter asked HHS to limit the definition of 
``guidance document'' to written materials. This commenter also asked 
HHS to clarify that discussions of technical advisory groups are not 
``guidance.''
    Response: HHS declines to limit the definition of ``guidance 
document'' to written materials. As we explained in the proposed rule, 
citing to OMB's 2007 ``Agency Good Guidance Practices'' (72 FR 3432), 
the definition of ``guidance document'' encompasses all guidance 
materials, such as videos, in any format. HHS is reiterating that, 
consistent with the 2007 OMB Bulletin, the ``definition of `guidance 
document' encompasses all guidance materials, regardless of format.'' 
Id. at 3434. Divisions of HHS commonly issue communications with 
regulated parties through website and blog entries and social media 
posts. Using such means of communicating with the public can offer 
benefits to HHS, including more effective outreach to interested 
parties; however, such electronic communications may often satisfy the 
definition of ``guidance document,'' and therefore would be subject to 
all of the requirements in this final rule, including that they cannot 
purport to impose binding new obligations on regulated entities. It 
would be arbitrary, and ultimately undermine the important procedural 
protections of this rule, if HHS were required to follow certain 
processes for written materials, but not to follow those same 
requirements for non-written or non-printed materials, even where they 
transmitted the same information to regulated parties. However, HHS 
agrees with the commenter that discussions of technical advisory groups 
do not constitute guidance because the statements are from members of 
the public and, thus, are not ``agency statements.''
    Comment: A few commenters asked HHS to clarify that guidance from 
HHS to agency contractors is ``guidance'' under the rule. Another 
commenter asked HHS to revise the rule to require its contractors to 
also be obligated to adhere to HHS good guidance practices.
    Response: Materials sent from HHS to agency contractors, such as 
technical directions, are generally not ``guidance'' under the rule, 
unless the content is designed to guide the conduct of regulated 
parties. Documents issued by HHS to agency contractors can be guidance 
documents if they include interpretive rules or policies that are of 
general applicability, particularly if they are also intended to serve 
a broader audience in addition to contractors, such as CMS Rulings. 
However, CMS Rulings, like all guidance documents, must still comply 
with procedural requirements imposed by the APA and Section 1871 of the 
Social Security Act.
    Comment: Several commenters asked HHS to clarify whether particular 
types of documents are guidance documents, such as Paperwork Reduction 
Act materials, the Medicaid Managed Care Rate Development Guide, PDP 
Bid Instructions, guidance documents directed to Medicare Accrediting 
Organizations, the State Operations Manual, the PACE Manual, the 
Qualified Health Plan Issuer Application Instructions, the October 31, 
2019 memorandum from OMB implementing Executive Order 13891 (``October 
31, 2019 OMB Memo''), MLN Matters documents, Frequently Asked Questions 
(``FAQs''), documents issued by Medicare Administrative Contractors 
(``MACs''), OIG advisory opinions, and preambles to proposed and final 
regulations.
    Response: This Rule does not affect HHS's obligations under the 
Paperwork Reduction Act. The Paperwork Reduction Act requires that when 
an agency seeks to collect information from ten or more persons, 44 
U.S.C. 3501, the agency must, subject to certain exceptions, submit the 
collection of information to OMB's Office of Information and Regulatory 
Affairs (OIRA) for clearance and must publish the proposed information 
collection in the Federal Register for public comment. 44 U.S.C. 3506, 
3507. Whether a document containing a collection of information under 
the Paperwork Reduction Act is also ``guidance'' under this Rule, as 
opposed to a purely factual collection of information, depends on the 
content of the document. Similarly, we would evaluate Paperwork 
Reduction Act clearance documents and Federal Register notices based on 
their contents to assess whether they constitute guidance, although we 
do not expect that they would be guidance.
    The Medicaid Managed Care Rate Development Guide, PDP Bid 
Instructions, guidance documents directed at Medicare Accrediting 
Organizations, the State Operations Manual, the PACE Manual, and the

[[Page 78774]]

Qualified Health Plan Issuer Application Instructions are all 
``guidance documents'' within the meaning of this rule, because they 
set forth a policy on a statutory, regulatory, or technical or 
scientific issue, or an interpretation of a statute or regulation, and 
they are designed to have future effect on the behavior of regulated 
parties. HHS cannot opine on whether the October 31, 2019 OMB 
Implementing Memo is ``guidance'' under the HHS rule. That is because 
this final rule only applies to statements issued by HHS, and OMB, not 
HHS, issued that memorandum. MLN Matters documents and HHS-issued FAQs 
are the type of blog posts and web statements that will generally 
constitute guidance. Instructions from MACs are not ``Department 
statements'' and, thus, are not guidance documents. OIG advisory 
opinions are generally not considered guidance because they are 
designed to contain statements of specific, rather than general, 
applicability. Since the inception of the advisory opinion process, in 
accordance with Section 1128D(b)(4)(A) of the Social Security Act, OIG 
has taken the view that all advisory opinions issued under this statute 
are legally binding on the Department (including the OIG) and the 
requestor, but only with respect to the specific conduct of the 
particular requestor, and that no third parties are bound nor may they 
rely on an advisory opinion. HHS and OIG have concluded that the 
advisory opinions OIG has issued prior to the issuance of this final 
rule are not guidance. Preambles to proposed and final regulations are 
generally considered to be guidance, because they inform the 
interpretation of the text of a regulation. See, e.g., Tex. Children's 
Hosp. v. Azar, 315 F. Supp. 3d 322, 334 (D.D.C. 2018); \3\ but see 
Natural Res. Def. Council v. E.P.A., 559 F.3d 561, 564-65 (D.C. Cir. 
2009) (``While preamble statements may in some unique cases constitute 
binding, final agency action susceptible to judicial review, this is 
not the norm.'' (internal citation omitted)). We are finalizing the 
definition of ``guidance document'' as proposed.
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    \3\ As explained above, HHS is finalizing the proposed 
definition of ``guidance repository,'' which permits the primary 
guidance repository, at www.hhs.gov, to link to subsidiary guidance 
repositories. HHS will include a link to the Federal Register on the 
HHS guidance repository. Interpretive rules and policies in 
preambles to proposed and final HHS rules contained in the Federal 
Register will be considered guidance included in the guidance 
repository. HHS will not separately post preambles to the guidance 
repository.
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2. Significant Guidance Document
    In the proposed rule, HHS proposed to classify certain guidance 
documents as ``significant guidance documents,'' which HHS proposed to 
define as a guidance document that is likely to lead to an annual 
effect on the economy of $100 million or more, or 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; create a serious 
inconsistency or otherwise interfere with an action taken or planned by 
another agency; materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights or obligations of 
recipients thereof; or raise novel legal or policy issues arising out 
of legal mandates, the President's priorities, or the principles of 
Executive Order 12866, ``Regulatory Planning and Review.'' In the 
proposed rule, HHS explained that to calculate whether a guidance 
document is likely to have an annual effect on the economy of $100 
million or more, HHS would be required to assess the benefits, costs, 
or transfer impacts imposed by that guidance document; as part of this 
analysis, any benefit, cost or transfer occurring in any consecutive 
twelve-month period would be compared against the $100 million 
threshold. Future cost savings would not be used to offset upfront 
costs. In performing these analyses, HHS further explained in the 
proposed rule that the Department would recognize that guidance 
documents are not legally binding and, therefore, not all regulated 
parties would necessarily conform their behavior to the recommendations 
set forth in the guidance, and furthermore, that the benefits, costs, 
and transfers may have been accounted for when HHS issued an underlying 
regulation, if any.
    In the proposed rule, HHS explained that it anticipated that only a 
subset of guidance documents would satisfy the proposed rule's 
definition of a significant guidance document. This is because to 
qualify as guidance, as opposed to a legislative rule, a document must 
reflect, implement, interpret, or describe a legal obligation imposed 
by a pre-existing, external source or advise the public prospectively 
of the manner in which the agency intends to exercise a discretionary 
power. It is HHS's presumption that a guidance document that HHS deems 
significant is actually a legislative rule that must go through notice-
and-comment rulemaking. HHS shall make all initial decisions as to 
whether a guidance document is significant, and OMB shall make all 
final determinations. If a significance determination requires a legal 
conclusion regarding HHS's governing statutes or regulations, however, 
OMB cannot reach legal conclusions on behalf of HHS.
    HHS received the following comments on the proposed definition of 
``significant guidance document.''
    Comment: Several commenters thought that the definition of 
``significant guidance'' was confusing and unclear because it does not 
provide a clear explanation for how costs related to significant 
guidance would be calculated and provided no discussion of standards, 
methodologies, or other criteria to determine whether guidance is 
``significant.'' One commenter specifically suggested that the test for 
inconsistencies with the planned actions of other agencies and the 
novel legal issues test be eliminated from the definition of 
``significant guidance,'' because these tests would impose a burdensome 
cross-agency review of all sub-regulatory guidance. Other commenters 
supported the proposed definition of ``significant guidance.''
    Response: HHS appreciates the comments. The definition of 
``significant guidance'' is modeled after the major-rule test from the 
Congressional Review Act. See 5 U.S.C. 804(2). For example, to 
determine whether guidance is significant because it will likely result 
in an annual effect on the economy of $100 million or more, HHS will 
use the well-established test for making that same determination under 
the Congressional Review Act, as noted in the proposed rule. The other 
criteria for determining whether guidance is significant are also 
specified in the proposed rule, and some of these criteria also have 
some overlap with the Congressional Review Act's definition of major 
rule. Specifically, guidance is significant if it 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, ``Regulatory Planning and 
Review.'' HHS believes the Department has discretion in assessing these 
factors and that these types of assessments are well

[[Page 78775]]

within the Department's expertise to make. HHS respectfully disagrees 
that the criteria relating to novel legal issues or the planned actions 
of other agencies would require a cross-agency review of all sub-
regulatory guidance. OMB--which has an excellent overview of guidance 
and regulatory issues across all agencies--will make all final 
decisions on the significant guidance determination and will help 
identify guidance documents that could trigger this criterion. If an 
interested party believes that the Department has incorrectly 
categorized a guidance document as non-significant, the interested 
party may utilize the petition process set forth at Sec.  1.5.
    Comment: Several commenters asserted that the proposed definitions 
of ``guidance document'' and ``significant guidance'' provided 
insufficient information to allow for effective comment.
    Response: HHS respectfully disagrees with these comments. HHS 
received a diverse set of comments on various aspects of the proposed 
definitions of ``guidance document'' and ``significant guidance 
document,'' as summarized above and below, which confirms that the 
Department provided the public with sufficient information about its 
proposals to permit comment on the proposed definitions. See Nuvio 
Corp. v. FCC, 473 F.3d 302, 310 (D.C. Cir. 2006) (citing comments 
received as evidence that notice of proposed rulemaking ``gave 
interested parties a reasonable opportunity . . . to present relevant 
information on the central issues''); see also, e.g., Ne. Md. Waste 
Disposal Auth. v. EPA, 358 F.3d 936, 952 (D.C. Cir. 2004); Appalachian 
Power Co. v. EPA, 135 F.3d 791, 816 (D.C. Cir. 1998) (per curiam); 
Stringfellow Mem'l Hosp. v. Azar, 317 F. Supp. 3d 168, 187 (D.D.C. 
2018).
    Comment: One commenter suggested that HHS expand the definition of 
``significant guidance'' to include any guidance that sets forth an 
initial interpretation of a statutory or regulatory requirement or 
changes such an interpretation. Another commenter suggested that HHS 
expand the definition of ``significant guidance'' to include any 
guidance that requires states to revise their statutes or regulations.
    Response: HHS appreciates the first commenter's suggestion. 
However, HHS believes this would significantly expand the set of 
documents categorized as ``significant guidance'' and may prove 
unworkable. HHS will consider potentially expanding the category of 
significant documents in the future, as the Department gains more 
experience implementing this final rule. HHS also declines to include 
within ``significant guidance'' any instructions that require states to 
revise their statutes or regulations. Guidance documents cannot impose 
new binding obligations on any entity. As a result, if a document 
purported newly to require states to revise a statute or regulation, 
such a purported instruction could not, by definition, be guidance. 
Guidance documents may, however, restate and discuss binding statutory 
or regulatory requirements, but should, when doing so, provide the 
citation for the applicable statutory or regulatory requirement.
    Comment: Several commenters concluded that any document categorized 
as ``significant'' is in fact a legislative rule that must go through 
the APA notice-and-comment rulemaking process. Another commenter 
expressed concern that significant guidance will be viewed as 
permissibly being able to impose binding new obligations on regulated 
parties.
    Response: HHS appreciates the commenters' concerns. As explained in 
the preamble to the proposed rule, HHS expects significant guidance 
documents to be relatively few, because as these commenters note, many 
issuances satisfying one of the significant guidance document criteria 
may also impose binding new obligations and as such, are legislative 
rules that must go through the APA's notice-and-comment rulemaking 
process. Interested parties who believe that HHS has incorrectly 
classified a legislative rule as a significant guidance document may 
utilize the petition process set forth in Sec.  1.5.
    HHS disagrees that significant guidance documents will be viewed as 
authorized to impose binding new obligations on regulated parties. 
These guidance documents, like all other guidance documents, will be 
posted to the HHS guidance repository, which will carry a disclaimer 
reiterating that all documents contained therein do not impose any new 
binding obligations unless authorized by law to do so. In addition, any 
significant guidance documents issued after this rule is finalized will 
generally include on their face the disclaimer set forth at Sec.  1.3, 
which reiterates that such documents ``do not have the force and effect 
of law and are not meant to bind the public in any way.''
    HHS finalizes the definition of ``significant guidance'' as 
proposed.
3. Issued
    In the proposed rule, HHS defined ``issued'' to mean a distribution 
of information to the public that HHS initiated or sponsored. However, 
HHS clarified that if a document directed solely to Department 
employees must be made publicly available under law or agency 
disclosure policies, for example posted on an agency website as the 
result of multiple requests under the Freedom of Information Act, the 
document would not be considered to be issued.
    HHS received one comment on the definition of ``issued'':
    Comment: A commenter expressed concern that the proposed definition 
of ``issued'' excluded documents directed solely to government 
employees or agency contractors, explaining that CMS and others have 
attempted to use instructions to contractors to impose binding 
requirements on Medicare Advantage plans through audit and other 
enforcement activities.
    Response: As HHS explained in the proposed rule, whether something 
is a guidance document is a functional test. Documents ostensibly 
directed at government employees or agency contractors but that are 
designed to, or are used to, shape the behavior of regulated parties 
will be considered guidance if they also set forth a policy on a 
statutory, regulatory, or technical or scientific issue, or an 
interpretation of a statute or regulation.
    HHS is finalizing the definition of ``issued'' as proposed.
4. Guidance Repository
    HHS proposed to define ``guidance repository'' to mean an online 
electronic database containing or linking to guidance documents, and 
proposed that the Department's primary guidance repository could link 
to subsidiary guidance repositories.
    Comment: One commenter asked HHS to clarify that the online 
electronic database would be publicly available and free to access.
    Response: HHS clarifies that by ``online,'' the final rule refers 
to a publicly available internet portal that is not behind a paywall.
    Comment: A few commenters commended FDA's pre-existing guidance 
website for its functionality and utility and expressed a desire for 
the HHS guidance repository to become more user-friendly.
    Response: HHS is glad that regulated parties have found FDA's 
guidance website to be useful. We note that FDA's guidance website has 
been operational for far longer than the HHS guidance repository, and 
HHS will consider incorporating additional functionality elements in 
the future, as the

[[Page 78776]]

Department gains more experience with administering the guidance 
repository.
    HHS finalizes the definition of ``guidance repository'' as 
proposed.

C. Requirements for Department Issuance and Use of Guidance Documents 
(Sec.  1.3)

    In the proposed rule, HHS proposed that, unless otherwise 
authorized by statute, HHS may not issue any guidance document that 
establishes legal obligations not reflected in duly enacted statutes or 
regulations lawfully promulgated under them, and may not use any 
guidance document for purposes of requiring persons or entities outside 
HHS to take any action or to refrain from taking any action beyond what 
is already required by the terms of an applicable statute or 
regulation. HHS explained that this is an existing legal obligation but 
that the Department proposed to codify this requirement in order to 
ensure consistent compliance with these important legal principles.
    HHS also proposed a process for issuing guidance that would 
formalize guardrails designed to ensure that guidance documents are 
appropriately issued and used. HHS proposed that after November 16, 
2020, each guidance document issued by HHS, or any of its components, 
would be required specifically to state that it is a ``guidance'' 
document and use the following language, unless the guidance is 
authorized by law to be binding: ``The contents of this document do not 
have the force and effect of law and are not meant to bind the public 
in any way, unless specifically incorporated into a contract. This 
document is intended only to provide clarity to the public regarding 
existing requirements under the law.'' HHS proposed that no guidance 
document issued by HHS would be able to direct parties outside the 
federal government to take or refrain from taking action, except when 
restating--with citations to statutes, regulations, or binding judicial 
precedent--mandates contained in a statute or regulation.
    In the proposed rule, HHS also proposed to require that each 
guidance document issued by HHS or any component of HHS after November 
16, 2020, must also include the following information: (1) The 
activities to which, and the persons to whom, the guidance applies; (2) 
the date HHS issued the guidance document; (3) a unique agency 
identifier; (4) a statement indicating whether the guidance document 
replaces or revises a previously issued guidance document and, if so, 
identifying the guidance document that it replaces or revises; (5) a 
citation to the statutory provision(s) and/or regulation(s) (in Code of 
Federal Regulations format) that the guidance document is interpreting 
or applying; and (6) a short summary of the subject matter covered in 
the guidance document. For guidance documents issued before November 
16, 2020, HHS proposed that the Department would not retrospectively 
revise those guidance documents to include the information listed in 
this paragraph. HHS further clarified that any guidance document issued 
in conjunction with one or more other agencies would nonetheless be 
required to comply with all requirements that would be applicable if 
the guidance document were issued solely by HHS.
    HHS proposed to apply additional procedures to significant guidance 
documents. HHS would submit all significant guidance documents to OIRA 
for review under Executive Order 12866 prior to issuance. Significant 
guidance documents would be required to comply with applicable 
requirements for significant regulatory actions, as set forth in 
executive orders, except that only economically significant guidance 
documents would require a separate Regulatory Impact Analysis. The 
Secretary, on a non-delegable basis, would have to approve any 
significant guidance document before the Department issues it. HHS 
specifically requested comments as to whether the Secretary should 
instead have the limited authority to delegate approval of guidance 
documents to the Deputy Secretary, and whether the Secretary should be 
required to approve certain non-significant guidance documents prior to 
publication.
    HHS proposed that, prior to issuing any significant guidance 
document, HHS must offer a public notice and comment period of at least 
30 days. HHS would be required to publish a public notice in both the 
Federal Register and the guidance repository. This notice would list 
the end of the comment period, provide information about where the 
public may access a copy of the proposed significant guidance document, 
and include how written comments may be submitted on the proposed 
significant guidance document and an internet website where those 
comments may be reviewed by the public. When issuing the significant 
guidance document, HHS would be required to review all comments 
received and publish an easily accessible public response to major 
concerns raised. Cf., e.g., New Lifecare Hosps. of Chester Cty. LLC v. 
Azar, 417 F. Supp. 3d 31, 43-44 (D.D.C. 2019) (discussing APA standard 
for agency responses to public comments during notice-and-comment 
rulemaking).
    Under the proposed rule, HHS could elect not to conduct a comment 
period if it were to find that notice and public comment are 
impracticable, unnecessary, or contrary to the public interest. The 
Secretary, as the individual approving the significant guidance 
document, would be required to make this finding, and the significant 
guidance document would have to incorporate the finding and a brief 
statement of reasons in support of such finding. In addition, a 
significant guidance document could be exempted from any other 
requirement otherwise applicable to significant guidance documents if 
the Secretary of HHS and the Administrator of OIRA were to agree that 
exigency, safety, health, or other compelling cause warrants the 
exemption.
    HHS also proposed that it would seek from OIRA, as appropriate, 
categorical determinations that classes of guidance presumptively do 
not qualify as significant. Any guidance satisfying such a categorical 
exemption presumptively need not comply with the requirements of Sec.  
1.3(b) but would need to comply with all other requirements applicable 
to guidance documents. OIRA may request to review guidance documents 
within a categorical exemption and may nonetheless conclude that a 
guidance document that is presumptively not significant is in fact 
significant.
    HHS received the following comments on the proposed process for 
issuing guidance documents:
    Comment: Several commenters stated that the APA exempts guidance 
documents from the notice-and-comment requirements of 5 U.S.C. 553, and 
that the Congressional Review Act, 5 U.S.C. Sections 801-808, also does 
not require guidance to go through notice and comment procedures. They 
assert that HHS fails to explain the statutory basis authorizing it to 
apply notice and comment requirements to guidance documents.
    Response: The APA requires that agencies must publish notice of a 
proposed rulemaking and give the public the opportunity to participate, 
usually by submitting comments, prior to issuing the rule. See 5 U.S.C. 
553(b). Subsection 553(b) exempts interpretative rules, general 
statements of policy, or rules of agency organization, procedure, or 
practice from the notice and comment requirement, unless otherwise 
required by statute. However, it does not prohibit agencies from using 
additional

[[Page 78777]]

procedures for rules that would otherwise be exempt from notice and 
comment procedures. The Supreme Court has recognized that the APA 
provides a statutory floor, not a ceiling, on the administrative 
procedures an agency may choose to adopt when promulgating legislative 
rules or issuing guidance. See Vt. Yankee Nuclear Power Corp. v. 
Natural Res. Def. Council, Inc., 435 U.S. 519, 524 (1978) (``Agencies 
are free to grant additional procedural rights in the exercise of their 
discretion . . . .'').
    HHS has previously adopted procedures above the APA floor. In 1971, 
then-Health Education and Welfare Secretary Richardson announced that, 
despite the exemption in the APA, the department would no longer 
consider matters relating to public property, loans, grants, benefits, 
and contracts exempt from notice and comment rulemaking (36 FR 2532 
(Feb. 5, 1971)), and the courts have enforced the requirement that 
these programs use notice and comment rulemaking ever since. See, e.g., 
Humana of S.C. v. Califano, 590 F.2d 1070, 1084 (D.C. Cir. 1978) 
(discussing waiver of benefit exemption and application of mandatory 
rulemaking procedures). See generally Service v. Dulles, 354 U.S. 363, 
388 (1957) (where agency had adopted regulations governing decision 
committed to the Secretary's discretion by statute, failure to apply 
agency regulations was illegal).
    Similarly, nothing in the Congressional Review Act precludes the 
adoption of additional procedures for guidance documents, nor does 
using these procedures affect whether any particular guidance is also a 
rule subject to the Congressional Review Act.
    The requirements within this final rule are well within the 
authority provided by the APA and the Congressional Review Act. HHS 
does not need additional statutory authority to provide notice and 
solicit public comments on significant guidance documents, or to apply 
any of the other procedures implemented by this final rule.
    Comment: Several commenters noted that the Congressional Review Act 
requires agencies to submit certain guidance documents to Congress, 
even if they are exempt from notice and comment rulemaking. The 
commenters expressed concern that the proposed rule did not mention 
these requirements and did not explicitly discuss congressional review 
of significant guidance.
    Response: The Congressional Review Act requires agencies to give 
Congress notice whenever they issue rules, 5 U.S.C. 801(a)(1)(A), which 
the Congressional Review Act defines to include interpretive rules and 
policy statements if they are ``designed to implement, interpret, or 
prescribe law or policy,'' 5 U.S.C. 551, as incorporated by 5 U.S.C. 
804(3). The Congressional Review Act authorizes OIRA to make a 
determination whether a rule is a ``major rule'' under the 
Congressional Review Act. 5 U.S.C. 804(2). For rules determined by OIRA 
to be ``major rules,'' agencies must generally provide advance notice 
to Congress. 5 U.S.C. 801(a)(3). Section 1.2 of this final rule 
incorporates and extends the major rule test from the Congressional 
Review Act in the definition of ``significant guidance.'' Section 
1.3(b)(2)(i) of the final rule requires the Department to submit 
significant guidance to OIRA for review. To the extent that a guidance 
document is also a ``rule'' subject to the Congressional Review Act, 
this final rule does not purport to change or modify the Congressional 
Review Act's requirements for Congressional notification.
    Comment: Several commenters pointed to what they perceived to be 
important questions left open by the proposed rule, such as whether HHS 
has an obligation to consider and respond to comments and how 
stakeholder input would be considered or integrated into proposed 
significant guidance.
    Response: As HHS explained in the preamble to the final rule, HHS 
does have an obligation to consider all comments and to respond not to 
each individual comment, but rather to all major concerns raised. See 
85 FR at 51,398 (``HHS would be required to review all comments 
received and publish an easily accessible public response to major 
concerns raised.''). This is a familiar standard for the Department and 
commenters. Cf. Envtl. Def. Fund v. E.P.A., 922 F.3d 446, 458 (D.C. 
Cir. 2019) (describing obligation under the APA to respond to major 
substantive comments during notice-and-comment rulemaking). 
Accordingly, HHS clarifies that the Department will consider comments 
timely submitted during a comment period and, as appropriate, modify a 
significant guidance document based upon stakeholder feedback in a 
manner similar to the process the Department uses for reviewing and 
incorporating feedback during the APA notice-and-comment rulemaking 
process.
    Comment: Several commenters asked whether significant guidance 
issued through a notice-and-comment process could be rescinded without 
notice and comment.
    Response: HHS will not use a notice-and-comment process for 
rescinding significant guidance documents. As the proposed rule 
explained, significant guidance documents are a subset of guidance 
documents, and the Department can rescind a guidance document by not 
posting it, or not maintaining its posting, on the HHS guidance 
repository. With the limited exception of certain Medicare guidance for 
which notice-and-comment rulemaking is required under Section 1871 of 
the Social Security Act, the Department is under no obligation to 
rescind significant guidance documents through a notice-and-comment 
process simply because the Department elected to apply such a process 
to the issuance of the significant guidance document. See Vermont 
Yankee, 435 U.S. at 524, 543-44; Perez v. Mortg. Bankers Ass'n, 575 
U.S. 92, 101 (2015). HHS notes that if, after the effective date of 
this final rule, rescinded guidance is replaced by a new guidance 
document, the replacement guidance must contain a reference to the 
rescinded guidance, and, if significant, the replacement guidance would 
itself be subject to notice and comment.
    Comment: A few commenters expressed concern that the proposed 
notice-and-comment process for significant guidance documents would be 
too cumbersome, and it would inhibit the Department's ability to timely 
issue significant guidance documents, particularly in circumstances 
such as during public health emergencies. Other commenters expressed 
strong support for the proposed notice-and-comment process, indicating 
that they welcomed the opportunity to participate in the development of 
significant guidance documents. Some of these commenters suggested that 
the Department should offer a longer comment period, such as 60 days 
instead of 30 days, in order to ensure robust public participation. 
Other commenters expressed support for the proposed exceptions to the 
notice-and-comment process, under which HHS could elect not to conduct 
a comment period if it were to find that notice and public comment are 
impracticable, unnecessary, or contrary to the public interest. Some of 
these commenters asked HHS to provide specific examples of when the 
Secretary might invoke this exceptions process. A couple of commenters 
recommended that HHS implement a process for soliciting public feedback 
about whether a guidance document is significant.
    Response: HHS appreciates the comments and agrees that the benefits 
of

[[Page 78778]]

receiving stakeholder input on significant guidance documents generally 
outweigh any administrative costs or incremental delays. A 30-day 
comment period generally strikes the right balance between competing 
needs, namely, the Department's interest in promptly issuing 
significant guidance and the public's interest in having sufficient 
time to offer thorough feedback. Nonetheless, HHS also agrees with the 
commenters who voiced support for the exceptions process. HHS plans to 
use this exceptions process when needed, as the Department acknowledges 
that certain circumstances, such as public health emergencies, may make 
it appropriate to invoke this exceptions process.
    HHS does not plan to solicit public feedback as to whether a 
guidance document is significant. First, this would further lengthen 
the process of issuing a significant guidance document, which may make 
it more difficult for the Department to timely issue relevant guidance. 
HHS also believes that the criteria for a guidance document being 
``significant'' require an assessment of factors that lie within the 
unique expertise of the Department and OMB. And finally, as indicated 
in the preamble to the proposed rule, OMB will make all final 
determinations as to whether a guidance document is significant. If HHS 
concludes in the future that public feedback on any question relating 
to significant guidance would be helpful, HHS may issue a Request for 
Information.
    Comment: A couple commenters suggested specific documents that HHS 
should work with OMB to categorize as presumptively exempt from being 
considered significant guidance, and furthermore, that HHS provide a 
notice and comment process for categories of documents that are being 
contemplated for exemption.
    Response: HHS will consider seeking public feedback through a 
future request for information as to categories of documents that 
should qualify for an exemption. OMB will make final determinations as 
to the categories of documents that are considered presumptively 
exempt.
    Comment: Several commenters claimed that the proposed rule failed 
to address joint guidance issued by multiple agencies. Other commenters 
asked HHS to carefully coordinate with other agencies when jointly 
issuing guidance, in order to avoid legal and operational challenges 
for regulated parties.
    Response: HHS respectfully disagrees that the proposed rule did not 
address guidance jointly issued by multiple agencies. In the preamble 
to the proposed rule, HHS stated, ``Any guidance issued in conjunction 
with one or more other agencies would nonetheless be required to comply 
with all requirements that would be applicable if the guidance document 
were issued solely by HHS.'' 85 FR at 51,398. HHS agrees that 
coordination with other agencies when jointly issuing guidance will be 
important. HHS has significant experience, in particular working with 
the Department of Labor, the Department of Agriculture, and the 
Department of the Treasury, on jointly issued guidance. HHS will 
continue to work closely with other agencies when issuing guidance to 
minimize any procedural complications that could affect regulated 
parties.
    Comment: Several commenters criticized the disclaimer HHS proposed 
to apply to all guidance documents issued after the final rule. These 
commenters stated that the disclaimer's statement that each guidance 
document ``has no legal effect'' has the potential to be confusing to 
regulated entities and members of the public. This is because, for 
example, regulated entities may believe they can ignore HHS guidance 
documents and substitute their own interpretations of regulations in 
place of the Department's interpretations. One commenter stated that 
the disclaimer is confusing because it is not clear whether regulated 
parties will need to conduct their own legal analysis to determine 
whether a guidance document is ``authorized by law.'' A few commenters 
asked whether significant guidance documents must include the 
disclaimer, and how HHS plans to incorporate the disclaimer into non-
written guidance materials such as video clips or make them searchable. 
Other commenters expressed strong support for the disclaimer 
requirement. Two commenters, while expressing support for the 
disclaimer, suggested that HHS should modify the proposed text, because 
they believe that the second sentence of the proposed disclaimer 
appears to suggest that guidance documents are binding because they 
purport to provide clarity regarding existing requirements under the 
law.
    Response: The proposed disclaimer is correct as a matter of law and 
is unlikely to be confusing. As a result of the notice, the public and 
regulated entities will have greater clarity about the role and 
implications of guidance documents when they are informed through the 
disclaimer that guidance documents cannot impose binding legal 
obligations above and beyond such legal obligations that are imposed by 
statute or regulation. Because the APA forbids agencies from imposing 
binding obligations on regulated parties through sub-regulatory 
guidance, unless authorized by law, regulated parties have always been 
free to choose not to adhere to interpretive rules set forth in 
guidance documents. However, they do so at their own risk, because 
guidance documents often provide important insight into how HHS 
interprets, and applies, its statutes and regulations. Regulated 
parties that take actions inconsistent with HHS's interpretive 
statements in guidance documents may be violating underlying statutory 
or regulatory obligations. HHS clarifies that regulated parties do not 
need to undertake their own legal analyses to determine whether any 
provision of law authorizes binding guidance documents: If a provision 
of law does authorize HHS to issue binding guidance documents, then the 
guidance document will not include the disclaimer stating that it lacks 
the force and effect of law. See Sec.  1.3(a)(3)(i) of the final rule, 
stating that guidance documents must include the specified disclaimer, 
``unless the guidance is authorized by law to be binding.''
    HHS does not believe that the second sentence in the proposed 
disclaimer text (``This document is intended only to provide clarity to 
the public regarding existing requirements under the law.'') suggests 
that guidance documents are binding. The first sentence clearly states 
that the contents of the document ``do not have the force and effect of 
law.'' Thus, the ``existing requirements under the law'' must arise 
from other sources that do have the force and effect of law, namely, 
validly enacted statutes and regulations.
    HHS clarifies that significant guidance documents must include the 
proposed disclaimer. All guidance documents issued after the final 
rule's effective date must include the disclaimer, and significant 
guidance documents are a subset of guidance documents. HHS will also 
include this disclaimer on non-written forms of guidance documents, 
such as videos. HHS will do so in a format appropriate to the medium, 
for example, in a guidance video, HHS might include an audio voiceover 
or a textual statement. If an operating division issues a non-written 
guidance document, the operating division is also responsible for 
creating a searchable transcript of that non-written guidance document 
and uploading it to the guidance repository.
    Comment: A couple of commenters expressed the concern that this 
Good Guidance Practices rule will inhibit informal agency 
communications with

[[Page 78779]]

regulated parties, such as CMS stakeholder engagement calls.
    Response: HHS does not intend for this rule to adversely impact 
informal agency communications with regulated parties. Many of these 
communications do not constitute guidance, because they involve the 
application of laws to a regulated party's specific factual 
circumstances. However, where an HHS operating division provides 
information that satisfies the definition of ``guidance document,'' HHS 
expects that information also to be posted to the guidance repository. 
This will ultimately inure to the benefit of regulated parties, because 
a broader set of entities will now have access to the guidance.
    Comment: One commenter opposed the proposed additional rules 
relating to the issuance and use of guidance documents, explaining that 
it had not seen a pattern of overreach by HHS, through its guidance 
documents, that would justify the additional proposed rules.
    Response: The rule is not being promulgated as a remedy for 
overreach. HHS believes that the Good Guidance Practices rule will 
improve its guidance practices and help to ensure that it acts in a 
fair, transparent, and lawful manner.
    Comment: Commenters generally expressed support for the inclusion 
of the proposed six categories of information on all guidance documents 
issued after the final rule. Some commenters suggested that HHS should 
include these six information categories on all guidance documents, 
even those issued before the implementation date of the final rule. 
Some commenters also suggested that HHS also add to the required 
categories of information the effective date of the guidance document, 
and furthermore, that HHS make guidance documents effective only after 
a reasonable implementation period.
    Response: HHS appreciates the commenters' support. Unfortunately, 
HHS does not currently have the resources to add the six categories of 
information to all of the thousands of guidance documents in the 
guidance repository that were issued before the effective date of this 
final rule. Accordingly, HHS finalizes its proposal to only apply this 
requirement prospectively, to guidance documents issued after the 
effective date of this final rule.
    HHS also finalizes the set of six categories of information, 
without adding any additional information fields, such as the guidance 
document's effective date. Generally, a guidance document will be 
effective as of the date it is issued, which is one of the six 
information categories that must be included in all guidance documents 
issued after this final rule's effective date. If a guidance document 
has a different effective date, HHS expects the issuing operating 
division will make that clear in the guidance document. HHS always 
strives to issue guidance documents in a timely manner, so that 
regulated parties can take HHS's views into account, but it believes 
that imposing a particular delay in effective date for guidance 
documents is outside the scope of the proposed rule. Nonetheless, HHS 
does not believe that issuing such a requirement in future rulemaking 
is necessary, given that guidance documents cannot impose binding new 
obligations.
    Comment: A few commenters expressed concern as to the statement in 
the proposed disclaimer that guidance documents ``are not meant to bind 
the public in any way, unless specifically incorporated into a 
contract.'' A couple of these commenters explained that many federal 
healthcare programs involve mandatory contracts with CMS, and CMS often 
includes in these contracts a general covenant to abide by all sub-
regulatory guidance that CMS has issued in the past or may issue in the 
future. Another commenter requested that HHS modify this portion of the 
disclaimer to clarify that it only applies to a legally enforceable 
contract, rather than an opt-in agreement that simply memorializes a 
party's decision to participate in a certain program and abide by the 
program's laws and regulations.
    Response: HHS agrees that so-called ``catchall'' clauses that 
generically purport to bind the signatory to all guidance ever issued 
by the Department do not fall within this exception, because the 
guidance materials are not ``specifically'' incorporated into the 
contract. If the government intends for a guidance document 
incorporated into a contract by reference to have independent legal 
basis, the government must make that intention clear through 
unambiguous language. For example, if a contract states that Medicare 
Advantage organizations must operate ``in compliance with the 
requirements of this contract and applicable Federal statutes, 
regulations, and policies (e.g., policies as described in the Call 
Letter, Medicare Managed Care Manual, etc.),'' the signatory must 
comply with CMS call letters and the Medicare Managed Care Manual, 
because these sub-regulatory materials are specifically referenced in 
the contract. However, the contract does not make compliance with any 
other sub-regulatory guidance issued by HHS legally binding. This 
narrow exception applies to the same extent to contracts categorized as 
opt-in agreements. HHS also clarifies that grants are analogous to 
contracts for purposes of this rule and the Department can accordingly 
also render guidance documents binding on grantees by specifically 
incorporating them into the grant agreement.
    Comment: Several commenters asked HHS to clarify the intersection 
between the Good Guidance Practices rule and the Department's 
obligations under Social Security Act Section 1871, as interpreted by 
the Supreme Court in Allina Health Services. One commenter suggested 
that the Department amend proposed Sec.  1.3(a)(1) expressly to 
acknowledge the Supreme Court's decision in Allina Health Services. 
This commenter also noted that Section 1871 of the Social Security Act 
further imposes requirements on HHS that the Department is currently 
not satisfying, namely, to ``publish in the Federal Register, not less 
frequently than every 3 months, a list of all manual instructions, 
interpretative rules, statements of policy, and guidelines of general 
applicability which--(A) are promulgated to carry out this subchapter, 
but (B) are not published pursuant to subsection (a)(1) and have not 
been previously published in a list under this subsection.'' See 42 
U.S.C. 1395hh(c)(1) (Section 1871(c)(1) of the Social Security Act).
    Response: In the preamble to the proposed rule, HHS noted that 
``OGC would continue to determine whether the contents of certain 
guidance relating to Medicare'' must go through notice-and-comment as a 
result of the Supreme Court's decision in Allina Health Services, but 
that ``[s]uch guidance documents would still need to meet all 
applicable requirements'' of the Good Guidance Practices rule. 85 FR at 
51,397. HHS clarifies that some substantive legal standards otherwise 
qualifying as ``guidance documents'' under this rule may also be 
subject to notice-and-comment obligations imposed by Section 1871. If 
so, the substantive legal standards must comply both with the 
obligations imposed by Section 1871 and the requirements in this final 
rule. Thus, for example, following publication in proposed and final 
rules, consistent with Section 1871, HHS would post the guidance 
document to the guidance repository.
    HHS believes Sec.  1.3(a)(1) accurately describes its obligations 
under Section 1871 and the APA as proposed, and declines to amend it. 
Section 1.3(a)(1) states, ``Under the Administrative Procedure Act, the 
Department may not

[[Page 78780]]

issue any guidance document that establishes a legal obligation that is 
not reflected in a duly enacted statute or in a regulation lawfully 
promulgated under a statute.'' Even if an interpretive rule qualifies 
as a substantive legal standard that is subject to notice-and-comment 
obligations under Section 1871, as an interpretive rule, it cannot 
``establish[ ] a legal obligation.'' Nothing in this Good Guidance 
Practices rule purports to override or alter the statutory obligations 
imposed on HHS with respect to the Medicare program under Section 1871.
    HHS acknowledges that it has not been fully complying with the 
requirements of Social Security Act Section 1871(c)(1) and commits to 
moving into full compliance with this requirement.
    Comment: A few commenters expressed support for the proposal that 
only the Secretary (on a non-delegable basis) can approve significant 
guidance documents. HHS did not receive any comments as to whether the 
Secretary should be required to approve certain non-significant 
guidance documents prior to publication.
    Response: We appreciate the commenters' support and agree that the 
Secretary should be required to approve, on a non-delegable basis, all 
significant guidance documents. The Department has also concluded that 
the Secretary should approve certain guidance documents that have the 
potential to materially impact the Department's work, even though their 
consequences external to the Department do not cause them to be 
considered ``significant.'' Accordingly, the Secretary must also 
approve, on a non-delegable basis, all non-significant guidance 
documents that he determines will either (1) implicate, including 
potentially impede, any policy matter of priority to the Secretary, or 
(2) where one operating division's proposed non-significant guidance 
document may create a serious inconsistency, or otherwise interfere, 
with an action taken or planned by another operating division or the 
Office of the Secretary.
    HHS finalizes the process for issuing guidance documents, including 
significant guidance documents, as proposed, except to specify that the 
effective date of the rule will be 30 days after publication of this 
final rule. HHS is also defining two types of non-significant guidance 
documents that the Secretary must review on a non-delegable basis.

D. Guidance Repository (Sec.  1.4)

    In the proposed rule, HHS proposed to make its guidance documents 
available to the public through the internet, by establishing a 
guidance repository on the HHS website at www.hhs.gov/guidance. HHS 
proposed that by November 16, 2020, the Department would be required to 
have posted to the guidance repository all guidance documents in effect 
that were issued by any component of the Department, and that the 
guidance repository must be fully text searchable.
    HHS proposed that any web page in the guidance repository that 
contains guidance documents would clearly indicate that any guidance 
document previously issued by the Department would no longer be in 
effect and would be considered rescinded if it is not included in the 
guidance repository by November 16, 2020. All web pages in the guidance 
repository containing guidance documents would also state that the 
guidance documents contained therein ``lack the force and effect of 
law, except as authorized by law or as specifically incorporated into a 
contract'' and ``the Department may not cite, use, or rely on any 
guidance that is not posted on the guidance repository, except to 
establish historical facts.'' HHS proposed that if the Department would 
like to reinstate a rescinded guidance document not posted to the 
guidance repository by November 16, 2020, the Department would be able 
to do so only by following all requirements applicable to newly issued 
guidance documents.
    HHS proposed that guidance documents issued after November 16, 2020 
would be required to comply with all applicable requirements in Sec.  
1.3, Requirements for Department Issuance and Use of Guidance 
Documents. HHS would be required to post a new or amended guidance 
document to the guidance repository within three business days of the 
date on which that guidance document was issued. For significant 
guidance documents issued after November 16, 2020, HHS would be 
required to post proposed versions of significant guidance documents to 
the guidance repository as part of the notice-and-comment process. The 
Department shall clearly indicate the end of each significant guidance 
document's comment period and the mechanisms by which members of the 
public may submit comments on the proposed significant guidance 
document. The Department would also be required to post online all HHS 
responses to major concerns raised in public comments.
    HHS received the following comments relating to the proposed 
guidance repository:
    Comment: Some commenters strongly supported the creation of the 
guidance repository and the enhanced transparency, accountability, and 
fairness that they believe would come with the requirement that HHS 
post all operative guidance materials to the guidance repository. Some 
of these commenters pointed out that, under the Department's existing 
processes, it is often not apparent when HHS issues guidance documents, 
and it is challenging to stay abreast of the Department's constantly 
evolving guidance documents.
    However, other commenters criticized the proposed requirement that 
any guidance document not posted to the guidance repository by November 
16, 2020, would be considered rescinded, and that HHS could not cite, 
use, or rely on such guidance documents except to establish historical 
facts. These commenters argued that the proposed process for rescinding 
guidance documents decreased agency transparency as compared to the 
status quo, rather than increasing it. Some commenters also expressed 
concern that HHS did not have sufficient time to come into compliance 
with the rule and transfer to the guidance repository all guidance 
documents that the Department intends to keep in effect, and that HHS 
should delay the effective date of the final rule. Due to the concern 
that HHS may accidentally rescind guidance documents by unintentionally 
omitting them from the guidance repository, several commenters 
recommended that HHS create a grace period during which time regulated 
parties could provide inadvertently omitted guidance documents to HHS 
for posting, without those guidance documents being considered 
rescinded. A couple commenters suggested that HHS should give a 30-day 
grace period for any guidance document that is rescinded, before it is 
treated as being rescinded. Some commenters further stated that it 
would be confusing to the public and regulated entities if a guidance 
document appears on an HHS website but is not included in the 
repository. Other commenters asked HHS to clarify what regulated 
entities should do if they are unsure as to whether a guidance document 
is still valid. A few commenters recommended that HHS create a guidance 
repository housing all rescinded guidance documents, and that where a 
guidance document replaces another guidance document, the new guidance 
document should link to the old guidance document being replaced.
    Response: HHS believes that the requirement that any guidance

[[Page 78781]]

document be posted to the guidance repository or otherwise be 
considered rescinded will improve upon existing levels of transparency 
and ultimately will decrease confusion. Currently, it is difficult for 
regulated parties definitively to ascertain what set of guidance 
documents HHS views as operative and what guidance documents they are 
expected to consider. This uncertainty carries its own confusion and 
causes a lack of transparency. The guidance repository will allow 
regulated parties to identify the complete set of guidance materials 
potentially applicable to their conduct. Nor does the fact that HHS can 
rescind a guidance document by not posting it to the guidance 
repository diminish existing levels of transparency. With the limited 
exception of certain Medicare guidance for which notice-and-comment 
rulemaking is required under Section 1871 of the Social Security Act, 
and thus a notice-and-comment process is required to rescind them, HHS 
is free to elect to stop relying on or using a guidance document, 
including without soliciting public feedback. But currently, the public 
has no way to know that HHS has decided to withdraw a guidance 
document, unless HHS chooses to make a specific announcement. Operating 
divisions remain free to announce when they are rescinding or replacing 
a guidance document, and we encourage operating divisions to do so. But 
regardless of whether they do, under the new process, the public will 
also be able to know that HHS has rescinded a guidance document, 
because the guidance document will not appear in, or will cease to 
appear in, the guidance repository.
    Posting a comprehensive list of all guidance documents HHS is 
rescinding and providing a justification for each guidance document the 
Department is rescinding would impose a significant burden on HHS, for 
the simple fact that the Department currently lacks a comprehensive 
list of all guidance documents it has issued. Prior to the issuance of 
Executive Order 13891, few agencies were required to house all of their 
guidance documents in a single location. This regulation and Executive 
Order 13891 are intended to address a symptom of the current problem--
the Department issues guidance documents in various media without ever 
transparently aggregating those materials. HHS has undertaken 
significant efforts to locate all of its guidance documents and include 
them in the repository, to help remedy the difficulties previously 
faced by regulated parties who were unable to ascertain all potentially 
applicable guidance materials. The rule provides additional clarity 
over the status quo, because where a guidance document issued after the 
effective date of this final rule replaces an existing document, the 
guidance document must indicate that it ``replaces or revises a 
previously issued guidance document'' and ``identify the guidance 
document that it replaces or revises.'' 45 CFR 1.3(a)(3)(iii)(D).
    Following the issuance of Executive Order 13891, HHS has been 
working to implement the guidance repository before it issued the 
August 20, 2020 Notice of Proposed Rulemaking, and HHS does not believe 
that an additional delay in the effective date, beyond the 30 days 
incorporated into this final rule, is warranted.\4\ The Department 
acknowledges that it may erroneously rescind a guidance document 
because it has failed to identify and upload the guidance document to 
the guidance repository by the effective date of this rule. However, 
both HHS and regulated parties effectively have a 30-day grace period 
before any guidance documents become rescinded as a result of HHS 
erroneously omitting them from the guidance repository. This is because 
this final rule will go into effect 30 days after publication. HHS 
encourages regulated parties to review the guidance documents posted on 
the guidance repository and notify HHS of guidance documents that may 
have been inadvertently omitted. Please email the Department at 
[email protected] or contact the issuing component of HHS. To the 
extent a guidance document appears on an HHS website but is not 
contained in the guidance repository, this should not be confusing: 
under this final rule, the guidance document is considered rescinded. 
However, this inconsistency may be a sign that HHS inadvertently failed 
to upload that guidance document to the guidance repository, and, as 
discussed in further detail below, HHS can remedy this mistake by 
issuing the guidance consistent with the procedures in this rule.
---------------------------------------------------------------------------

    \4\ OMB has been involved with this implementation process and 
approved extensions to provide HHS with additional time to come into 
compliance with the requirements of Executive Order 13891. See 85 FR 
55306 (Sept. 4, 2020); 85 FR 39919 (July 2, 2020); 85 FR 15482 (Mar. 
18, 2020).
---------------------------------------------------------------------------

    Comment: Several commenters also stated that HHS should provide the 
public with an opportunity to weigh in on what guidance documents 
should be rescinded. These commenters generally recommended that HHS 
publish the criteria it will apply when deciding to rescind guidance 
documents. Some commenters also requested that HHS post a justification 
for every guidance document that the Department rescinds.
    Response: HHS currently has discretion to rescind a guidance 
document without soliciting public feedback and, indeed, without even 
providing notice to regulated parties. The proposed rule was not 
intended to alter the Department's existing authority to rescind 
guidance documents without engaging in a public comment process, 
although, as described above, the proposed rule would ensure that 
regulated parties, by searching the guidance repository, can identify 
when guidance documents are or are not considered operative. HHS 
currently lacks the resources to draft publicly issued justifications 
for every guidance document that the Department rescinds. And, as 
previously explained, HHS cannot compile a list of guidance documents 
that potentially may be rescinded, or a justification for why they are 
being rescinded. HHS will post all guidance documents that it intends 
to continue to use to the guidance repository, and it will not so post 
guidance documents that are outdated, or that HHS otherwise no longer 
intends to use.
    Comment: A few commenters asked HHS to provide notification, for 
those who choose to opt into receiving such notifications, of when the 
Department posts new guidance documents to the guidance repository and 
when HHS rescinds a guidance document.
    Response: HHS currently lacks the resources to implement this 
process. It will consider adding this requested functionality in the 
future. However, the guidance repository allows users to sort by 
``Issue Date,'' i.e., the date on which the guidance document was 
issued. This will allow users to review the subset of most recently 
issued guidance documents.
    Comment: A couple of commenters suggested that HHS maintain a 
repository of rescinded guidance documents, and that where a guidance 
document replaces another guidance document, the new guidance document 
should link to the replaced guidance document.
    Response: HHS currently lacks the resources to implement either 
suggestion. In particular and as discussed above, the Department 
currently lacks a comprehensive list of all guidance documents it has 
issued. HHS will consider a future guidance repository of guidance 
documents rescinded after the effective date of the final rule. 
Regardless, for these guidance

[[Page 78782]]

documents, regulated parties will be able to ascertain if a rescinded 
guidance is replaced by a new guidance document, because the 
replacement guidance will be required to contain a reference to the 
rescinded guidance.
    Comment: A few commenters asked HHS to clarify the effect of HHS 
rescinding a guidance document. One commenter asked HHS to clarify that 
if a guidance document's rescission has substantive effect, that the 
effect will be prospective only. One commenter suggested that HHS 
incorporate a ``hold harmless'' provision in the final rule, which 
would guarantee regulated entities that they would not be penalized if 
they rely on a guidance document that has been rescinded due to not 
being included in the guidance repository.
    Response: If HHS rescinds a guidance document, the Department may 
not cite, use, or rely on that guidance document, except to establish 
historical facts. Guidance documents reflect the Department's 
interpretations and policies during the time period that they are in 
effect. Because guidance documents cannot impose binding legal 
obligations on regulated entities independent of obligations imposed by 
duly enacted statutes or regulations, the consequences of rescinding a 
guidance document should generally be minimal. See Mortgage Bankers, 
575 U.S. at 103 (explaining that interpretive rules cannot change the 
regulation or statute they interpret). Because guidance documents 
generally cannot impose any new binding obligations, there rarely 
should be circumstances where entities adopt practices consistent with 
a guidance document that is subsequently rescinded and, as a result, 
are in noncompliance with the law and subject to penalty. Accordingly, 
HHS sees no need for inclusion of a ``hold harmless'' clause in the 
final rule.
    Comment: A couple commenters stated that the process for 
reinstating rescinded guidance is vague, impractical, time consuming, 
creates uncertainty, and will inhibit access to guidance documents. 
Other commenters claimed that rescinding guidance would create 
confusion, because it could be interpreted by some as a reversion to a 
different policy than the one explained in the rescinded guidance.
    Response: HHS respectfully disagrees with these commenters. As 
explained in the proposed rule, to reinstate a rescinded guidance 
document, HHS will merely need to use the same process that it will use 
for all guidance documents newly issued after the effective date of 
this final rule. That process, for all but the generally small number 
of significant guidance documents, merely requires HHS to include a 
disclaimer and six information fields in the guidance document, and to 
ensure that the content adheres to pre-existing legal obligations under 
the APA. This process is not overly burdensome for the Department, and 
if an operating division wants to re-issue guidance, it can, and will, 
readily do so. HHS believes that some of the commenters' concerns stem 
from misunderstandings about guidance documents. Guidance documents 
cannot alter legal obligations, and therefore whether a guidance 
document is rescinded should not create any confusion about a regulated 
party's legal obligations--they remain the same. If a regulated party 
is confused about whether an operating division is altering its 
interpretation of a statute or regulation, the regulated party should 
reach out to the relevant operating division to ask for clarification.
    Comment: A few commenters suggested that HHS continue to post 
guidance materials to operating division-specific websites, in addition 
to posting those same materials to the guidance repository. A couple 
commenters further suggested that guidance materials on operating 
division websites link to the guidance document in the guidance 
repository.
    Response: HHS currently lacks the resources to provide the 
requested cross-linking between guidance documents on operating 
division websites and on the guidance repository. However, HHS will 
continue to post guidance documents on operating division websites, in 
parallel with posting those materials to the guidance repository. In 
general, the posting of guidance documents to the guidance repository 
is not intended to, and will not, alter or otherwise disrupt the 
posting of guidance documents to operating division websites.
    HHS finalizes the requirements relating to the guidance repository 
as proposed, except to specify that the effective date of the rule will 
be 30 days after publication of this final rule.

E. Procedure To Petition for Review of Guidance (Sec.  1.5)

    In the proposed rule, HHS proposed that any interested party would 
be able to petition HHS to withdraw or modify any particular guidance 
document. Such petitions would include requests to determine whether
     A guidance document, no matter how styled, imposes binding 
obligations on parties beyond what is required by the terms of 
applicable statutes and/or regulations.
     An HHS component is using a guidance document to create 
additional legal obligations beyond what is required by the terms of 
applicable statutes and/or regulations.
     HHS is improperly exempting a guidance document from the 
procedures set forth in the proposed rule.
    As part of this petition process, HHS proposed that the interested 
party would be able to ask HHS to remedy the deficiency relating to the 
use or contents of the guidance document by modifying or withdrawing 
the guidance document.\5\ HHS notes that the remedy for a successful 
petition commonly may be modification or withdrawal of a guidance 
document, and HHS is not waiving the presentment and exhaustion 
requirements for claims arising under the Medicare statute, including 
claims for payment and coverage. Any such claim that an interested 
party asserts is related to the guidance document that is the subject 
of a petition under this section must still move through the existing 
administrative process for that claim, including exhaustion.
---------------------------------------------------------------------------

    \5\ However, an interested party could not use this process to 
seek changes based on the quality of the information contained in a 
document; there are other processes to address the quality of 
information contained in HHS issuances.
---------------------------------------------------------------------------

    HHS proposed that petitions must be addressed to HHS in writing, 
and the guidance repository would include clear instructions to members 
of the public regarding how to petition for review of guidance, 
including how such petitions can be submitted, and an HHS office 
responsible for coordinating such requests.
    HHS proposed that, in order to facilitate transparency and avoid 
duplication of work, HHS would publish all responses to petitions for 
guidance review in a designated section of its online guidance 
repository. If HHS were to receive multiple similar petitions within a 
short time period, HHS proposed that the Department could aggregate 
those petitions and respond to them in a single response, so long as 
all petitions were responded to within the appropriate time period. It 
further proposed that HHS must respond to all petitions within 90 
business days of the date on which the petition was received. The time 
period to respond would be suspended if HHS were to need to request 
additional information from the person who submitted the petition or to 
consult with other stakeholders. Under the proposed rule, HHS's 
response to any such petition would be considered final agency action 
reviewable in court, because it would mark the

[[Page 78783]]

consummation of HHS's decision-making process and legal consequences 
flow from the response to the petition. See, e.g., Appalachian Power 
Co. v. E.P.A., 208 F.3d 1015, 1022 (D.C. Cir. 2000) (defining 
reviewable agency action).
    HHS received the following comments relating to the proposed 
petition process.
    Comment: Several commenters supported the proposed petition 
process. Other commenters were concerned that the petition process 
might delay the issuance of guidance documents or that the petition 
process would be too burdensome on the Department. A couple of 
commenters stated that the petition process would create uncertainty 
and confusion, because regulated parties would feel as though they 
cannot rely on guidance that could be rescinded at any time, and 
furthermore, the ability of ``any interested party'' to use the 
proposed petition process would give almost anyone the opportunity to 
undermine guidance documents. A few commenters suggested that the 
petition process should only apply to guidance documents issued after 
the effective date of the final rule; others conversely asked HHS to 
clarify that the petition process does apply to guidance documents 
issued before the effective date of the final rule. One commenter asked 
HHS to clarify that petitions can be filed whenever an interested party 
identifies a perceived issue with a guidance document.
    Response: HHS appreciates the commenters' support and agrees in 
particular with the commenter who characterized the petition process as 
``key to policing compliance with the principles'' set forth in this 
Good Guidance Practices rule. HHS does not believe that the proposed 
petition process would delay or otherwise impact the issuance of 
guidance documents. This is because the petition process is only 
available to challenge guidance documents that have already been 
issued, and guidance documents will remain in effect throughout the 
petition process, unless and until HHS issues a petition response 
concluding that a guidance document should be modified or rescinded. 
HHS believes that the 90-business-day period in which to respond to 
petitions provides sufficient time to accommodate petition responses 
alongside the work of issuing new guidance documents, without unduly 
straining HHS resources and delaying the issuance of new guidance 
documents.
    HHS agrees that the term ``interested party'' is broad, and extends 
to more than merely regulated parties, however, HHS does not think that 
the petition process will undermine the utility of the Department's 
guidance documents: HHS can currently rescind guidance documents at any 
time; therefore, it does not believe that the petition process would 
undermine the extent to which regulated parties feel comfortable 
looking to guidance documents for HHS's current views on the subjects 
covered by such documents.
    HHS clarifies that the petition process can be applied to any HHS 
guidance document, regardless of when HHS issued that guidance 
document, so long as the guidance document is in effect at the time the 
petition is filed. HHS also clarifies that interested parties can file 
a petition at any time. In other words, regulated parties are under no 
obligation to file a petition within a certain time period.
    Comment: One commenter asked HHS to clarify the standard that HHS 
will use to grant a petition. This commenter also suggested that HHS 
clarify that the final rule requires the Department to clearly grant or 
deny the requested remedy and include a rationale for the decision. One 
commenter asked HHS to clarify that the petition process can be used to 
challenge a guidance document that HHS initially treated as non-
significant and assert that it should actually be categorized as 
significant.
    Response: Under Sec.  1.5(a)(1)-(3), as finalized in this 
rulemaking, interested parties can petition HHS and assert one of three 
bases for the petition:
     The substance of an HHS guidance document is unlawful, 
i.e., the guidance document purports to impose binding new obligations 
on regulated parties.
     While the substance of an HHS guidance document may be 
lawful, a division of HHS is using or interpreting the guidance 
document unlawfully, i.e., to impose binding new obligations on 
regulated parties.
     HHS is improperly exempting a guidance document from the 
requirements in the Good Guidance Practices rule.
    HHS clarifies that Sec.  1.5(a)(3) allows interested parties to 
challenge a guidance document that HHS initially treated as non-
significant, thereby improperly exempting that guidance document from 
this rule's requirements for significant guidance documents.
    HHS will respond to a petition, generally by agreeing either to 
modify or withdraw the challenged guidance document or documents, 
modify its application or treatment of the challenged guidance document 
or documents, or declining to take any action. If HHS agrees with the 
petitioner that a guidance document is substantively unlawful, is being 
used unlawfully, or is being improperly exempted from the requirements 
of this rule, then HHS will take actions that bring the Department's 
conduct, and the guidance documents, into compliance with all legal 
obligations, including this Good Guidance Practices regulation. HHS 
agrees that the proposed Sec.  1.5(e) is insufficiently clear about 
what is required in HHS's response to a petition. Accordingly, in 
finalizing Sec.  1.5(e), HHS modifies the text to clarify that the 
Department's petition response must state whether the Department agrees 
or disagrees with the petition; the Department's rationale for such 
position; and if the Department agrees that the petitioner has 
identified an unlawful action, that the Department must remedy the 
unlawful action.
    Comment: A few commenters asked HHS to give regulated parties an 
opportunity to respond to or comment on petitions.
    Response: In order to streamline the petition process and ensure a 
prompt response within the 90-business-day time limit, HHS will not 
accept comments on petitions from third parties.
    Comment: Some commenters asked HHS to clarify that guidance 
documents would remain in effect during the petition process, while 
other commenters suggested that HHS clarify that guidance documents 
will be held in abeyance, and viewed as not in effect, pending the 
Department's response to a petition.
    Response: The initiation of a petition regarding a particular 
guidance document or documents will have no immediate impact on those 
guidance documents. Instead, only if HHS agrees with the petitioner 
that the guidance document(s) at issue in the petition are unlawful 
will HHS modify or rescind the guidance document(s). Temporarily 
withdrawing, or holding in abeyance, guidance documents every time they 
are the subject of a petition would be extraordinarily disruptive to 
regulated parties and the Department.
    Comment: Several commenters suggested that HHS shorten the time 
period to respond to a petition to less than 90 business days. A couple 
of commenters suggested a longer time period in which to respond. 
Several commenters suggested that HHS place a time limit on the extent 
to which the Department can suspend this 90-day clock when consulting 
with stakeholders. A couple of commenters asked HHS to implement 
consequences for failing to follow the procedures in

[[Page 78784]]

this rule, including the petition response time.
    Response: HHS finalizes the 90-business-day time period. This 
strikes the right balance between ensuring that HHS has sufficient time 
to thoughtfully respond to petitions and seeking to issue petition 
responses relatively promptly. HHS does not limit the time period 
during which the Department can suspend the 90-day clock when 
consulting with stakeholders or incorporating any specific penalty for 
non-compliance with the procedures in this rule. However, HHS believes 
that in these circumstances, regulated parties could have a cause of 
action under the APA for delayed or withheld agency action.
    Comment: One commenter stated that this Good Guidance Practices 
rule is unnecessary, because regulated parties today can file APA 
challenges if an agency purports to impose binding obligations through 
guidance.
    Response: HHS agrees that regulated parties currently may have a 
cause of action under the APA if the Department were to purport to 
impose binding obligations through guidance documents, unless 
authorized by law. This Good Guidance Practices rule seeks to enhance 
the Department's practices with respect to guidance, including by 
creating a central guidance repository that will allow regulated 
parties to search for potentially relevant guidance documents.
    Comment: One commenter asked that HHS publish not just its 
responses to petitions, but also the petitions themselves.
    Response: HHS will publish in the guidance repository petition 
requests alongside petition responses.
    Comment: A few commenters asked HHS to clarify that the petition 
process does not affect the availability of other legal causes of 
action, including those under the APA, and in particular, that filing a 
petition with HHS is not a threshold requirement for a judicial 
challenge relating to a guidance document.
    Response: HHS agrees that the petition process does not create an 
administrative exhaustion requirement or affect the availability of 
other legal causes of action. In some circumstances, Article III 
jurisdiction may exist to challenge a guidance document or use of a 
guidance document, even without a prior petition. The petition process 
is available for those who would like to engage administratively with 
the Department, and may provide an avenue to resolve issues without the 
need for litigation.
    Comment: One commenter asked HHS to accept petitions alleging that 
the Department of Justice or a qui tam relator has used a guidance 
document inappropriately.
    Response: HHS declines to incorporate this proposal; HHS will only 
accept petitions relating to its own conduct. HHS acknowledges that 
some actors outside of HHS, such as qui tam relators, could use a 
guidance document inappropriately, in a manner that attempts to impose 
binding new obligations on regulated parties. However, HHS lacks the 
authority to grant a remedy with respect to the conduct of the 
Department of Justice or qui tam relators. HHS suggests that in these 
circumstances, regulated parties file a petition with HHS seeking 
clarification as to the appropriate scope of the guidance document at 
issue. HHS also notes that such use of guidance documents by the 
Department of Justice is inconsistent with the January 25, 2018 
Memorandum from then-Associate Attorney General Rachel Brand, 
``Limiting Use of Agency Guidance Documents In Affirmative Civil 
Enforcement Cases,'' and should be brought to the attention of 
Department of Justice leadership.
    Comment: One commenter suggested that when HHS aggregates similar 
petitions filed within a ``short'' time of one another, HHS should 
define ``short'' as 14 calendar days and should require a reasoned 
response to every substantive issue raised by each of the aggregated 
petitions.
    Response: HHS respectfully declines to adopt a rigid time period 
for when HHS can aggregate responses to similar petitions filed within 
a short time period. However, each response to a petition must satisfy 
the 90-business-day time limit (subject to any permissible tolling); 
this requirement will serve as a natural time limit on the extent to 
which HHS can aggregate petition responses.
    Comment: One commenter suggested that HHS incorporate an express 
judicial reviewability clause in the final rule's regulation text.
    Response: The regulation text governs HHS's own actions. HHS cannot 
directly confer Article III jurisdiction through statements in 
regulation text. Accordingly, HHS does not agree that adding such a 
clause in the final rule's regulation text would alter the rule.
    HHS finalizes the petition process in Sec.  1.5 as proposed, with 
clarifying edits to Sec.  1.5(e).

III. Required Rulemaking Analyses

A. Executive Orders 12866 and 13563: Regulatory Planning and Review 
Analysis

    HHS examined the effects of this rule as required by E.O. 12866, 
``Regulatory Planning and Review,'' 58 FR 51,735 (Oct. 4, 1993), E.O. 
13563, ``Improving Regulation and Regulatory Review,'' 76 FR 3821, 
(Jan. 21, 2011), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4).
    Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review,'' 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if the regulation is necessary, to select 
regulatory approaches that maximize net benefits. A Regulatory Impact 
Analysis must be prepared for major rules with economically significant 
effects. The Department has determined that this rulemaking is not a 
significant regulatory action under these Executive Orders. In 
addition, the Department does not anticipate that this rulemaking will 
impose measurable costs on regulated parties. This final rule describes 
agency processes for issuing guidance and responding to petitions 
regarding guidance that allegedly is inappropriate or is being used 
inappropriately. Implementation of this final rule will require HHS 
expenditures to create and maintain the guidance repository, along with 
employing a new process for the review of significant guidance 
documents and for the review of guidance documents which are the 
subject of a petition for review. For 2020, HHS expended approximately 
$2.4 million to develop the guidance repository. HHS expected annual 
costs for 2021 and 2022 to be about $1 million. However, the Department 
expects benefits to accrue as a result of the streamlined and clarified 
process for issuing guidance documents. The Department anticipates that 
the public, and, in particular, regulated parties, will benefit from 
greater efficiencies and more transparency in how the Department 
operates and regulates. The Office of Management and Budget (OMB) has 
reviewed this rule.
    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs has determined that 
this final rule is not a ``major rule'' as defined by 5 U.S.C. 804(2).
    Section 202(a) of the Unfunded Mandates Reform Act of 1995, 2 
U.S.C. 1532(a), requires that agencies prepare a written statement, 
which includes an assessment of anticipated costs and

[[Page 78785]]

benefits, before proposing ``any rule that includes any federal mandate 
that may result in the expenditure by state, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more (adjusted annually for inflation) in any one year.'' In 
2019, that threshold was $154 million. HHS does not expect this rule to 
exceed the threshold.

B. Executive Order 13771

    This final rule is neither a regulatory nor a deregulatory action 
under Executive Order 13771, ``Reducing Regulation and Controlling 
Regulatory Costs,'' 82 FR 9339 (Feb. 3, 2017), because this rule is 
estimated to impose no more than de minimis costs on regulated 
entities.

C. Regulatory Flexibility Act and Executive Order 13272

    The Department has examined the economic implications of this final 
rule as required by the Regulatory Flexibility Act (RFA), 5 U.S.C. 601 
et seq. The RFA and the Small Business Regulatory Enforcement and 
Fairness Act of 1996 (Pub. L. 104-121), which amended the RFA, require 
HHS to analyze options for regulatory relief of small businesses. If a 
rule has a significant economic effect on a substantial number of small 
entities, the Secretary must specifically consider the economic effect 
of the rule on small entities and analyze regulatory options that could 
lessen the impact of the rule. The Department considers a rule to have 
a significant impact on a substantial number of small entities if the 
rule has at least a three percent impact on revenue on at least five 
percent of small entities. The Department anticipates that this final 
rule will allow small entities to operate more efficiently, by 
increasing the transparency of government regulation. As a result, the 
Department has determined, and the Secretary certifies, that this final 
rule does not have a significant impact on a substantial number of 
small entities.

D. Executive Order 13132 (Federalism)

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), 
establishes certain requirements that an agency must meet when it 
promulgates a rule that imposes substantial direct requirement costs on 
State and local governments or has federalism implications. The 
Department has determined that this final rule does not impose such 
costs or have any federalism implications.

E. Paperwork Reduction Act of 1995

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), the Department has reviewed this final rule and has 
determined that it does not create new collections of information.

List of Subjects in 45 CFR Part 1

    Guidance, Reporting and recordkeeping requirements.


0
For the reasons set forth in the preamble, the Department of Health and 
Human Services amends 45 CFR, subtitle A, subchapter A, by adding part 
1 to read as follows:

PART 1--GOOD GUIDANCE PRACTICES

Sec.
1.1 Scope.
1.2 Definitions.
1.3 Requirements for Department issuance and use of guidance 
documents.
1.4 Guidance repository.
1.5 Procedure to petition for review of guidance.

    Authority:  42 U.S.C. 1302; 5 U.S.C. 301, 551 et seq.


Sec.  1.1   Scope.

    This part shall apply to guidance documents issued by all 
components of the Department, until the Secretary amends the Food and 
Drug Administration's good guidance regulations at 21 CFR 10.115 to 
bring them into conformance with the requirements of this part, at 
which point, such amended regulations shall apply to the Food and Drug 
Administration's issuance and use of guidance documents.


Sec.  1.2   Definitions.

    The following definitions apply to this part. Different definitions 
may be found in Federal statutes or regulations that apply more 
specifically to particular programs or activities.
    Guidance document means any Department statement of general 
applicability, intended to have future effect on the behavior of 
regulated parties and which sets forth a policy on a statutory, 
regulatory, or technical or scientific issue, or an interpretation of a 
statute or regulation. The term ``guidance document'' does not include 
rules promulgated pursuant to notice and comment under 5 U.S.C. 553, or 
similar statutory provisions; rules exempt from rulemaking requirements 
under 5 U.S.C. 553(a); rules of agency organization, procedure, or 
practice; decisions of agency adjudications under 5 U.S.C. 554, or 
similar statutory provisions; internal guidance directed to the 
Department or other agencies that is not intended to have substantial 
future effect on the behavior of regulated parties; internal executive 
branch legal advice or legal opinions addressed to executive branch 
officials; legal briefs and other court filings; grant solicitations 
and awards; or contract solicitations and awards. Pre-enforcement 
rulings, i.e., communications with a person that interpret or apply the 
law to a specific set of facts, such as letter rulings, advisory 
opinions, no-action letters, and notices of noncompliance, do not 
constitute guidance documents. If, however, the Department issues such 
a document that on its face is directed to a particular party, but the 
content of the document is designed to guide the conduct of other 
regulated parties, such a document would qualify as guidance.
    Guidance repository means an online database containing or linking 
to guidance documents.
    Issued means the Department initiated or sponsored distribution of 
information to the public. ``Issued'' does not include distribution 
intended to be limited to government employees or agency contractors, 
or distribution required under law or agency disclosure policies.
    Significant guidance document means a guidance document that may 
reasonably be anticipated to lead to an annual effect on the economy of 
$100 million or more, or 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; create a serious inconsistency or otherwise 
interfere with an action taken or planned by another agency; materially 
alter the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights or obligations of recipients thereof; or raise 
novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles of Executive Order 12866. The 
term ``significant guidance document'' does not include the categories 
of documents exempted in writing by the Office of Management and 
Budget's (``OMB'') Office of Information and Regulatory Affairs 
(``OIRA'').


Sec.  1.3   Requirements for Department issuance and use of guidance 
documents.

    (a) Guidance documents. (1) Under the Administrative Procedure Act, 
the Department may not issue any guidance document that establishes a 
legal obligation that is not reflected in a duly enacted statute or in 
a regulation lawfully promulgated under a statute.
    (2) The Department may not use any guidance document for purposes 
of requiring a person or entity outside the

[[Page 78786]]

Department to take any action, or refrain from taking any action, 
beyond what is required by the terms of an applicable statute or 
regulation.
    (3) Each guidance document issued by the Department must:
    (i) Identify itself as ``guidance'' (by using the term 
``guidance'') and include the following language, unless the guidance 
is authorized by law to be binding: ``The contents of this document do 
not have the force and effect of law and are not meant to bind the 
public in any way, unless specifically incorporated into a contract. 
This document is intended only to provide clarity to the public 
regarding existing requirements under the law.'';
    (ii) Not direct parties outside the Federal Government to take or 
refrain from taking action, except when restating--with citations to 
statutes, regulations, or binding judicial precedent--clear mandates 
contained in a statute or regulation; and
    (iii) Include the following information:
    (A) The activities to which and the persons to whom the document 
applies;
    (B) The date of issuance;
    (C) Unique agency identifier;
    (D) Whether the guidance document replaces or revises a previously 
issued guidance document and, if so, identify the guidance document 
that it replaces or revises;
    (E) Citation to the statutory provision(s) and/or regulation(s) (in 
Code of Federal Regulations format) that the guidance document is 
interpreting or applying; and
    (F) A short summary of the subject matter covered in the guidance 
document.
    (4) The Secretary must approve, on a non-delegable basis, all non-
significant guidance documents that the Secretary determines will 
either
    (i) Implicate, including potentially impede, any policy matter of 
priority to the Secretary, or
    (ii) Potentially create a serious inconsistency, or otherwise 
interfere, with an action taken or planned by another operating 
division or the Office of the Secretary.
    (b) Significant guidance documents. (1) Before the Department 
issues any significant guidance document, it must be approved, on a 
non-delegable basis, by the Secretary.
    (2) Before issuing any significant guidance document, the 
Department must:
    (i) Submit the significant guidance document to OIRA for review 
under Executive Order 12866 prior to issuance.
    (ii) Provide at least a 30-day public notice and comment period on 
the proposed significant guidance document, unless the Department for 
good cause finds (and incorporates such finding and a brief statement 
of reasons therefor into the guidance document) that notice and public 
comment are impracticable, unnecessary, or contrary to the public 
interest. If no such good cause exists, the public notice (which must 
be published in the Federal Register and posted in the guidance 
repository) shall include all of the following information:
    (A) Information as to where the public may access a copy of the 
proposed significant guidance document;
    (B) Information as to where written comments may be sent, and an 
internet website where those comments may be reviewed by the public; 
and
    (C) The time period during which comments will be accepted.
    (iii) Publish a public response to the major concerns raised during 
the comment period.
    (3) Significant guidance documents must comply with applicable 
requirements for significant regulatory actions, as set forth in 
Executive Orders, except that only economically significant guidance 
documents require a separate Regulatory Impact Analysis.
    (4) A 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 must make this finding, and the significant guidance document 
must incorporate the finding and a brief statement of reasons in 
support.
    (5) The Department shall seek from OIRA, as appropriate, 
categorical determinations that classes of guidance presumptively do 
not qualify as significant. Any guidance satisfying such a categorical 
exemption presumptively need not comply with the requirements of this 
paragraph (b) but must comply with all other requirements applicable to 
guidance documents. OIRA may determine that a particular guidance 
document within a categorical exemption is nonetheless significant.


Sec.  1.4  Guidance repository.

    (a) Existing guidance. By January 6, 2021, the Department shall 
maintain a guidance repository on its website at www.hhs.gov/guidance.
    (1) The guidance repository shall be fully text searchable and 
contain or link to all guidance documents in effect that have been 
issued by any component of the Department.
    (2) If the Department does not include a guidance document in the 
guidance repository by January 6, 2021, the guidance document shall be 
considered rescinded.
    (3) Any web page in the guidance repository that contains or links 
to guidance documents must state:
    (i) That the guidance documents contained therein:
    (A) ``Lack the force and effect of law, except as authorized by law 
or as specifically incorporated into a contract.''; and
    (B) ``The Department may not cite, use, or rely on any guidance 
that is not posted on the guidance repository, except to establish 
historical facts.''
    (ii) That any guidance document previously issued by the Department 
is no longer in effect, and will be considered rescinded, if it is not 
included in the guidance repository.
    (4) If the Department wishes to reinstate a rescinded guidance 
document, the Department may do so only by complying with all of the 
requirements applicable to guidance documents issued after January 6, 
2021.
    (b) Guidance issued after January 6, 2021. (1) For all guidance 
documents issued after January 6, 2021, the Department must post each 
guidance document to the Department's guidance repository within three 
business days of the date on which that guidance document was issued.
    (2) For significant guidance documents issued after January 6, 
2021, the Department shall post proposed new significant guidance to 
the guidance repository as part of the notice-and-comment process.
    (i) The posting shall clearly indicate the end of each significant 
guidance document's comment period and provide a means for members of 
the public to submit comments.
    (ii) The Department shall also post online all responses to major 
public comments.


Sec.  1.5   Procedure to petition for review of guidance.

    (a) Any interested party may petition the Department to withdraw or 
modify any particular guidance document. Such petitions may include 
requests to determine whether:
    (1) A guidance document, no matter how styled, imposes binding 
obligations on parties beyond what is required by the terms of 
applicable statutes and/or regulations;
    (2) A component of the Department is using a guidance document to 
create additional legal obligations beyond what is required by the 
terms of applicable statutes and/or regulations; or

[[Page 78787]]

    (3) The Department is improperly exempting a guidance document from 
the requirements set forth in this part.
    (b) As part of a petition under this section, an interested party 
may ask that the Department modify or withdraw any guidance document in 
effect at the time of the petition.
    (c) Petitions under this section must be addressed to the 
Department in writing. The Department's guidance repository must 
include clear instructions to members of the public regarding how to 
petition for review of guidance, including how such petition can be 
submitted, and an office at the Department responsible for coordinating 
such requests.
    (d) The Department must respond to all petitions no later than 90 
business days after receipt of the petition. The applicable time period 
for responding is suspended from the time the Department:
    (1) Requests additional information from the requestor, until the 
Department receives the additional information; or
    (2) Notifies the requestor of the need to consult with other 
stakeholders, including but not limited to the Department of Justice or 
the Department's Office of Inspector General, until the Department 
completes consultation with other stakeholders.
    (e) The Department's written response to petitions must state 
whether the Department agrees or disagrees with the petition and the 
Department's rationale. The Department must remedy the substance or use 
of any guidance documents that it determines in a petition response to 
be inconsistent with this part or otherwise unlawful. The Department 
will post all responses to petitions under this section to a designated 
web page on its guidance repository.

Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2020-26832 Filed 12-3-20; 4:15 pm]
BILLING CODE 4150-26-P