Securing Updated and Necessary Statutory Evaluations Timely; Administrative Delay of Effective Date; Correction, 15404-15408 [2021-05907]

Download as PDF 15404 Federal Register / Vol. 86, No. 54 / Tuesday, March 23, 2021 / Rules and Regulations AWP AZ E5 Kayenta, AZ [Revoked] Bedard Field, AZ (Lat. 36°28′18″ N, long. 110°25′05″ W) Issued in Des Moines, Washington, on March 12, 2021. B.G. Chew, Acting Group Manager, Operations Support Group, Western Service Center. [FR Doc. 2021–05601 Filed 3–22–21; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration Nicole R. LeBoeuf, Acting Assistant Administrator,National Ocean Service, National Oceanic and Atmospheric Administration. 15 CFR Part 922 [Docket No. 210318–0059] RIN 0648–BA21 Expansion of Flower Garden Banks National Marine Sanctuary; Notification of Effective Date and Technical Amendment Office of National Marine Sanctuaries (ONMS), National Ocean Service (NOS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce (DOC). ACTION: Notification of effective date of final rule; technical amendment. AGENCY: The National Oceanic and Atmospheric Administration (NOAA) is providing notice that the final rule published on January 19, 2021 to expand Flower Garden Banks National Marine Sanctuary (FGBNMS) is effective on March 22, 2021. NOAA is also amending the FGBNMS regulations to reflect the effective date. DATES: The final rule to expand Flower Garden Banks National Marine Sanctuary, which was published at 86 FR 4937 on January 19, 2021, is effective on March 22, 2021. The technical amendment in this document is effective on March 22, 2021. FOR FURTHER INFORMATION CONTACT: George P. Schmahl, Superintendent, Flower Garden Banks National Marine Sanctuary, 4700 Avenue U, Building 216, Galveston, Texas 77551, at 409– 356–0383, or fgbexpansion@noaa.gov. SUPPLEMENTARY INFORMATION: Pursuant to Section 304(b) of the National Marine Sanctuaries Act (NMSA) (16 U.S.C. 1434(b)), NOAA published the designation and final regulations to implement the expansion of FGBNMS published on January 19, 2021 (86 FR 4937). As required by the NMSA, the designation and regulations would become effective following the close of a review period of 45 days of SUMMARY: VerDate Sep<11>2014 16:06 Mar 22, 2021 Jkt 253001 continuous session of Congress beginning on the date of publication. Moreover, a Presidential Memorandum issued on January 20, 2021 required agencies to consider a 60-day postponement in new regulations. Accordingly, NOAA announces the designation and the final regulations to implement the expansion of FGBNMS is effective on March 22, 2021. With this document, NOAA is also amending the FGBNMS regulations at § 922.122 (e)(1) to update and reflect the effective date of March 22, 2021. Accordingly, for the reasons set forth above, NOAA amends part 922, title 15 of the Code of Federal Regulations as follows: PART 922—NATIONAL MARINE SANCTUARY PROGRAM REGULATIONS 1. The authority citation for part 922 continues to read as follows: ■ Authority: 16 U.S.C. 1431 et seq. Subpart L—Flower Garden Banks National Marine Sanctuary § 922.122 [Amended] 2. Amend § 922.122(e)(1) by adding ‘‘March 22, 2021,’’ before the phrase ‘‘the effective date of the revised terms of sanctuary designation’’. ■ [FR Doc. 2021–06051 Filed 3–22–21; 8:45 am] BILLING CODE 3510–NK–P PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 6 Public Health Service 42 CFR Part 1 Centers for Medicare and Medicaid Services 42 CFR Part 404 Office of the Inspector General 42 CFR Part 1000 Office of the Secretary 45 CFR Part 8 Administration for Children and Families 45 CFR Parts 200, 300, 403, 1010, and 1300 [Docket No. HHS–OS–2020–0012] RIN 0991–AC24 Securing Updated and Necessary Statutory Evaluations Timely; Administrative Delay of Effective Date; Correction Department of Health and Human Services (HHS). ACTION: Final rule; delay of effective date and correction. AGENCY: The Department of Health and Human Services (HHS or Department) is postponing, pending judicial review, the effective date of a final rule entitled ‘‘Securing Updated and Necessary Statutory Evaluations Timely’’ (SUNSET final rule) and published in the Federal Register of January 19, 2021. This document also corrects certain errors in the SUNSET final rule. DATES: As of March 19, 2021, the effective date of the final rule published January 19, 2021 (86 FR 5694), is delayed pursuant to 5 U.S.C. 705 for one year until March 22, 2022. This correction is effective as of March 22, 2022, and amendatory instruction #10 in FR 2021–00597 (86 FR 5694), published on January 19, 2021, is corrected. FOR FURTHER INFORMATION CONTACT: Daniel J. Barry, Acting General Counsel, 200 Independence Avenue SW, Washington, DC 20201; or by email at reviewnprm@hhs.gov; or by telephone at 1–877–696–6775. SUMMARY: E:\FR\FM\23MRR1.SGM 23MRR1 Federal Register / Vol. 86, No. 54 / Tuesday, March 23, 2021 / Rules and Regulations The SUNSET final rule was scheduled to take effect on March 22, 2021. On March 9, 2021, a lawsuit was filed seeking to overturn the SUNSET final rule. HHS finds that the interests of justice require that the SUNSET final rule’s effective date be postponed pending judicial review because: Based on HHS’s initial review of the Complaint, HHS believes that the Court could find merit in some of Plaintiffs’ claims; Plaintiffs’ allegations of harm are credible; a postponement will permit HHS to review the SUNSET final rule in light of the claims raised in the litigation; and the balance of equities and the public interest warrant postponement of the effective date to preserve the status quo while the Court considers the challenge to the SUNSET final rule. This document also corrects certain errors in the SUNSET final rule. In the Federal Register of November 4, 2020 (85 FR 70096), HHS published a notice of proposed rulemaking entitled ‘‘Securing Updated and Necessary Statutory Evaluations Timely’’ (SUNSET). Under the rule as proposed, subject to certain exceptions, Department regulations would expire at the end of (1) two calendar years after the year that the SUNSET rule first became effective, (2) ten calendar years after the year of the regulation’s promulgation, or (3) ten calendar years after the last year in which the Department ‘‘assessed’’ and, if required, ‘‘reviewed’’ the regulation, whichever was latest. Thus, under the proposed rule, unless HHS ‘‘assessed’’ and, if required, ‘‘reviewed’’ most of its regulations within a certain timeframe specified in the rule (for most existing regulations, within two years) and every ten years thereafter, the regulations would expire. The proposed rule also provided that if a ‘‘review’’ led to a finding that a regulation should be amended or rescinded, the Department must amend or rescind the regulation within a specified timeframe (generally two years). In addition, the proposed rule contained certain publication requirements, including that (1) the Department publish the results of all ‘‘assessments’’ and ‘‘reviews,’’ including the full underlying analyses and data used to support the results, in the Federal Register, and (2) the Department announce the commencement of an ‘‘assessment’’ or ‘‘review’’ of a particular regulation on the agency website, with an opportunity for public comment. The proposed rule provided that comments could be submitted until December 4, 2020, except for comments on the portion of SUPPLEMENTARY INFORMATION: VerDate Sep<11>2014 16:06 Mar 22, 2021 Jkt 253001 the rule amending 42 CFR parts 400– 429 and parts 475–499, which were due by January 4, 2021. In the Federal Register of November 16, 2020 (85 FR 73007), HHS announced a public hearing, scheduled for November 23, 2020, to receive information and views on the proposed rule (Public Hearing). In the Federal Register of January 19, 2021 (86 FR 5694), HHS issued the SUNSET final rule. The final rule provides that all regulations, subject to certain exceptions, issued by the Secretary of the Department of Health and Human Services (Secretary) or their delegates or sub-delegates in titles 21, 42, and 45 of the CFR shall expire at the end of (1) five calendar years after the year that the SUNSET final rule first becomes effective, (2) ten calendar years after the year of the regulation’s promulgation, or (3) ten calendar years after the last year in which the Department ‘‘assessed’’ and, if required, ‘‘reviewed’’ the regulation, whichever is latest. Thus, the final rule contains the same basic expiration framework as the proposed rule, but extends the timeframe for ‘‘assessment’’ and any applicable ‘‘review’’ of most existing regulations from two calendar years to five calendar years. The final rule also provides for ‘‘continuation’’ of a regulation that is subject to expiration if the Secretary makes a written determination that the public interest requires continuation. In addition, the final rule contains exemptions for a small set of certain Food and Drug Administration (FDA) regulations. The final rule maintains the timeframe for amendment or rescission of regulations, as well as the publication requirements, and includes a new Federal Register publication requirement. The final rule also expands its reach to include additional provisions regarding parts of HHS not specifically included in the proposed rule. The final rule states that its effective date is March 22, 2021. On March 9, 2021, the County of Santa Clara, California Tribal Families Coalition, National Association of Pediatric Nurse Practitioners, American Lung Association, Center for Science in the Public Interest, and Natural Resources Defense Council sued the Department seeking to overturn the SUNSET final rule under the Administrative Procedure Act (APA). Complaint, County of Santa Clara v. HHS, Case No. 5:21–cv–01655–BLF (N.D. Cal.). Plaintiffs allege that the SUNSET final rule is ultra vires, see id. ¶¶ 123–30; arbitrary and capricious, see id. ¶¶ 131–33; in violation of the APA’s notice-and-comment requirements, see id. ¶¶ 134–39; and in violation of HHS’s PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 15405 Tribal Consultation Policy, see id. ¶¶ 140–44. Plaintiffs further allege that the SUNSET final rule threatens imminent and irreparable harm to them and the general public, including by creating regulatory confusion and uncertainty that will impede their ongoing operations, budgeting, and planning activities. See, e.g., id. ¶¶ 100– 02; see generally id. ¶¶ 95–122. Under 5 U.S.C. 705 of the APA, an agency ‘‘may postpone the effective date of action taken by it, pending judicial review,’’ when the ‘‘agency finds that justice so requires.’’ HHS has concluded that the interests of justice require that the SUNSET final rule be stayed pending judicial review. As discussed in greater detail below, HHS believes that the Court may find merit in some of Plaintiffs’ claims, that Plaintiffs’ allegations of harm are credible, and that the balance of equities and the public interest warrant postponement of the effective date pending judicial review. Accordingly, the interests of justice require a postponement in order to preserve the status quo, because, if the rule took effect while HHS was evaluating the rule in light of the claims raised in litigation, it could create significant obligations for HHS, cause confusion for the public, including Plaintiffs, and may lead to compliance costs as entities, including Plaintiffs, plan steps necessary to deal with the rule’s implementation, as explained below. HHS is unaware of any benefits from the implementation of the SUNSET final rule that would be significantly curtailed from a stay of its effective date. The Department is taking a fresh and critical look at the SUNSET final rule in light of the allegations in the Complaint (although many of these concerns were also raised during the comment period on the proposed rule). The Complaint alleges serious legal vulnerabilities of the rule, and, while HHS does not concede any of these claims at this time, HHS requires additional time to evaluate the SUNSET final rule given the pending litigation. In addition, the Complaint raises the question as to whether the SUNSET final rule, issued in the final days of the last administration, is consistent with the policies and goals of the current administration, both in terms of the appropriate role of regulatory oversight of the health care industry and necessary engagement with the public, including tribal organizations. The Complaint makes numerous allegations that the substantive provisions of SUNSET final rule violate the law. The Complaint alleges that the SUNSET final rule is contrary to and E:\FR\FM\23MRR1.SGM 23MRR1 15406 Federal Register / Vol. 86, No. 54 / Tuesday, March 23, 2021 / Rules and Regulations exceeds the Department’s authority under the APA, substantive organic statutes, and the Regulatory Flexibility Act (RFA) because it schedules the rescission of thousands of regulations that were required by statute, amends regulations without the same level of process and statutory considerations required for the original regulations, and provides for automatic elimination of regulations without considering the requirements of the RFA. The Complaint further alleges that the SUNSET final rule is arbitrary and capricious and lacks a rational basis because, among other reasons, it assumes that HHS will conduct RFA reviews at an implausible pace; does not adequately consider the extreme degree of regulatory uncertainty the SUNSET final rule creates; underestimates the burden imposed on Plaintiffs for monitoring HHS regulations to ensure they do not expire; and fails to consider the specific regulations being amended to automatically expire. Given the volume of HHS agency regulations that the Department would need to assess and, as applicable, review in a short period of time, HHS now believes it is likely some regulations would expire without any additional administrative process (contrary to the conclusions reached in the SUNSET final rule). Under the SUNSET final rule, for each covered regulation, HHS agencies would need to: Collect data to conduct the relevant evaluation, perform an assessment and possibly a review, consider any comments to the public docket related to the evaluation, publish the results of this process in the Federal Register (‘‘including the full underlying analyses and data used to support the results,’’ 86 FR at 5712), and, if warranted, complete a rulemaking to amend or rescind the regulation, which would itself require an additional investment of agencies’ resources and public input. If the work is unable to be conducted within the final rule’s time frames, the regulations would expire. That outcome could raise interrelated administrative law questions regarding: Whether regulations promulgated through notice and comment rulemaking can be terminated through an umbrella rule without individualized consideration of the expiring regulations, including any reliance interests of parties affected by them; and, if so, whether the proposed/final rule provided an adequate justification for implementing a process of automatic expiration. The expiration component of the SUNSET final rule also raises significant policy and public health questions VerDate Sep<11>2014 16:06 Mar 22, 2021 Jkt 253001 concerning the value of the assessment and review processes and whether those processes are so important that they outweigh the value of the regulations that would likely expire. The potential automatic expiration of regulatory programs could create uncertainty and unpredictability regarding large swathes of the rules governing health care, which would upend the status quo and in turn could result in compliance costs to HHS grantees, contractors, and health care providers and suppliers, many of whom may have structured matters such as financial arrangements and business operations to satisfy the conditions set forth in the current regulations. The resulting disruption in the marketplace could impact stakeholders who rely on the regulatory functions of each HHS agency. This uncertainty could have serious implications for insurance markets, hospitals, physicians, and patients, among other affected parties, which could lead physicians and other regulated entities to forgo future investments because of the lack of clarity. In addition, because States depend on HHS to set national standards and have built vast regulatory systems within that framework, the possibility that many regulations would lapse could pose a direct threat to the States’ healthcare systems and the health and safety of individuals. The expiration of regulations could also muddle the clarity and predictability of existing regulations, which in turn would impede program implementation and reduce HHS’s overall efficiency. HHS is similarly concerned that the SUNSET final rule may have significantly underestimated the burden of the assessments and reviews for this magnitude of regulations and fails to account for the substantial resources that would be needed for the HHS agencies to simultaneously evaluate thousands of regulations in a short period of time. For example, the Regulatory Impact Analysis (RIA) included in the final rule appears to focus on the number of staff and staff hours required for ‘‘reviews,’’ but provides an incomplete estimate for the cost of the initial ‘‘assessment’’ phase. That raises questions regarding whether the RIA significantly underestimated the costs that will be incurred by agencies and overestimates the purported cost savings. Currently, there is no accurate impact analysis of the substantial redirection of resources (both financial and employee) required to provide the necessary expertise and input from economists, epidemiologists, medical officers, legal and regulatory counsel, and other subject matter experts. PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 The Complaint also alleges that the promulgation of the SUNSET final rule suffered from procedural deficiencies. Plaintiffs allege that, despite widespread requests for more time, HHS issued the SUNSET final rule after providing 30 days to comment on the rule’s effect on non-Medicare regulations and 60 days to comment on its effects on Medicare regulations, seriously interfering with meaningful public participation. The comments likewise raised concerns about the adequacy of the comment period for a rule with this magnitude of impact and the timing of the proposal, particularly during the COVID–19 pandemic, both of which may have impeded the full and deliberate consideration of all of the potential issues related to the SUNSET rule. For example, at the Public Hearing, almost all commenters agreed that HHS should have lengthened the comment period, and offered several reasons in support of a longer comment period, all of which were expressed by multiple commenters: That a proposal with this breadth, scope, and potential harmful impact, including unintended detrimental consequences to regulated industries, merited more time for thoughtful public input; that impacted stakeholders included small businesses that would not be able to digest and comment on a rule of this breadth in such a short period of time; that it was irresponsible for HHS to engage in this rulemaking during the height of the pandemic when stakeholder resources were devoted to addressing the public health emergency; and that the already short comment period included Thanksgiving weekend, which exacerbated the time-crunch for commenters. See Transcript, Public Hearing on the Securing Updated and Necessary Statutory Evaluations Timely Notice of Proposed Rulemaking (Public Hearing Transcript) (Nov. 23, 2020) (available at https:// www.regulations.gov/document/HHSOS-2020-0012-0501). As with Plaintiffs’ above substantive claims, HHS requires additional time to review the SUNSET final rule’s compliance with these procedural obligations, in light of Plaintiffs’ claims, before determining how to proceed in litigation and before creating uncertainty among the regulated community. The SUNSET final rule is uniquely situated in that it affects an extraordinarily large number of regulations, which lends support for Plaintiffs’ procedural claims. The Complaint also alleges that, despite the SUNSET final rule’s sweeping scope and tribal implications, the Department neglected to consult E:\FR\FM\23MRR1.SGM 23MRR1 Federal Register / Vol. 86, No. 54 / Tuesday, March 23, 2021 / Rules and Regulations with tribal governments. Again, these same concerns were raised in the written comments on the SUNSET proposed rule. Under Executive Order 13175, entitled ‘‘Consultation and Coordination With Indian Tribal Governments,’’ HHS is required, before any action is taken that will significantly affect Indian Tribes, to consult with Indian Tribes in the development of the proposed rule to the extent practicable and permitted by law. 65 FR 67249 (Nov. 6, 2000). This required consultation is in recognition that Tribes should be afforded an opportunity to comment meaningfully on the rule’s impact. However, multiple comments from representatives of several Tribes and related groups explained that, despite the enormous impact that this rule, if implemented, would have on Tribes, HHS failed to consult with Tribal governments (or even notify them regarding the proposal), contrary to procedures required under Executive Order 13175. See, e.g., Comments from the: Saint Regis Mohawk Tribe; Chickahominy Indian Tribe; Jena Band of Choctaw Indians; Nez Perce Tribe; Affiliated Tribes of Northwest Indians; Mohegan Tribe of Connecticut; Tanana Chiefs Conference; Chippewa Cree Tribe of the Rocky Boy’s Reservation; Alaska Native Tribal Health Consortium; United South and Eastern Tribes Sovereignty Protection Fund; Northwest Portland Area Indian Health Board; Quinault Indian Nation; California Tribal Families Coalition; National Indian Child Welfare Association; Tribal Law and Policy Institute; Tribal Technical Advisory Group; Native American Rights Fund, and the National Congress of American Indians, available at https://www.regulations.gov/document/ HHS-OS-2020-0012-0001/comment. In light of the allegations in the Complaint, we need to reconsider the conclusion in the SUNSET final rule that the rule does not significantly affect Indian Tribes or have Tribal implications. Accordingly, HHS requires additional time to review the SUNSET final rule in light of the pending litigation. In publishing the SUNSET final rule, the Department previously took the position that the rule complies with the APA and that the comment period was adequate, among other things. The Department’s conclusions rested on certain assumptions that the Complaint challenges. For example, the Department expressed a view that it has the resources to complete assessments and reviews and avoid expiration, thus avoiding many of the legal concerns related to automatic repeal of VerDate Sep<11>2014 16:06 Mar 22, 2021 Jkt 253001 regulations. See, e.g., 86 FR 5694, 5705 (‘‘The regulatory impact analysis in this final rule explains how HHS has the resources and personnel to perform the Assessments and Reviews called for by this final rule.’’); id. at 5710 (‘‘HHS does not intend to allow a regulation to simply expire.’’); id. at 5711 (‘‘HHS believes that this final rule does not significantly affect Indian Tribes or have Tribal implications . . . HHS intends that all rules will be Assessed and (if necessary) Reviewed timely. Therefore, this final rule would have no direct impact on Indian Tribes’’); id. at 5714 (‘‘The Department does not intend for any regulations to inadvertently sunset, and it is unlikely that any regulations with significant benefits would slip through the cracks.’’). However, the Complaint alleges that ‘‘there is no realistic probability that the Department will be able to conduct the number of reviews required to prevent automatic rescission,’’ based in part on the quantity of analyses that would be required in the first five years and the agency’s past practices. Complaint, ¶¶ 84–85. As noted above, the Department now believes that the RIA developed for the SUNSET final rule may not have fully taken into account all of the resource implications of this rule and therefore misjudged the likely expiration of existing regulations, elevating the administrative law concerns and concerns about the adequacy of the RIA. In addition, the Department previously took the view that a 30-day comment period was adequate. However, the Complaint challenges the sufficiency of a 30-day comment period for complex rules, Complaint, ¶ 54, and the SUNSET rule’s unique breadth, affecting an extraordinarily large number of regulations, could add force to such claims. The Department also took the view that the lack of tribal consultation was mitigated by the fact that Tribes will be able to comment on regulations during the Assessment and Review processes, 86 FR at 5711, but, as noted above, HHS is reconsidering that conclusion in light of the claims raised in the Complaint. The Complaint also alleges that Plaintiffs and others are immediately harmed by the SUNSET final rule. The Complaint alleges that the uncertainty resulting from its implementation impacts the entire healthcare sector, which accounts for nearly one-fifth of the U.S. economy and secures individual and community health for hundreds of millions of Americans, and that participants in every single industry the Department regulates, including Plaintiffs, must plan their PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 15407 futures and operations without knowing what regulations will govern their businesses in these notoriously complex regulatory arenas. See Complaint, ¶¶ 2, 95–122. While HHS does not concede that Plaintiffs would establish irreparable harm in litigation, HHS agrees that it is appropriate to postpone the effective date of the SUNSET final rule to preserve the status quo and to ensure that HHS has time to evaluate the rule before it takes effect to avoid the possibility of confusion among the regulated community. In addition, given the scope of work and timeframes set forth in the SUNSET final rule, the review required under the rule would divert the Department’s resources from mission-critical endeavors for HHS agencies. For example, based on a count cited in the SUNSET final rule, under the timeline and definitions provided in the final rule, over 7,000 sections of the Code of Federal Regulations promulgated by the Food and Drug Administration (FDA) are more than ten years old or would become more than ten years old during the first five years the rule would be in effect, representing over 95 percent of its current regulations. Unless one of the exemptions applied, these regulations would need to be assessed within five years and, if applicable, reviewed, or be subject to expiration. If the SUNSET final rule were to become effective as scheduled on March 22, 2021, then, in order to meet these new obligations within the specified timeframe to avoid automatic expiration of its regulations, FDA and the Department would need to immediately divert resources toward assessment and review during the ongoing COVID–19 public health emergency. In that event, FDA’s reviews of medical product applications, fulfillment of user fee commitments, and actions to address urgent public health matters such as ongoing COVID– 19 pandemic relief efforts, outbreaks of foodborne illness, inspections, recalls, and other public health priorities would be significantly impacted. This concentration of resources in conducting regulatory review pursuant to the SUNSET rule could prevent FDA from modernizing its regulatory oversight more efficiently and addressing new regulatory needs. These considerations further support HHS’s determination that justice requires a postponement of the SUNSET final rule’s effective date. See 5 U.S.C. 705. The SUNSET final rule presents similar burdens for HHS’s seven other Public Health Service agencies and three human services agencies, such as the Centers for Medicare & Medicaid Services (CMS), with implications for E:\FR\FM\23MRR1.SGM 23MRR1 15408 Federal Register / Vol. 86, No. 54 / Tuesday, March 23, 2021 / Rules and Regulations many initiatives. For example, comments at the Public Hearing from the American College of Obstetricians and Gynecologists, Center on Budget and Policy Priorities, National Immigration Law Center, and Service Employees International Union raised concerns that the SUNSET rule would undermine the regulations underpinning the Affordable Care Act, potentially with catastrophic consequences for the health care of millions of individuals and families. See Public Hearing Transcript. As another example, Medicare regulations are numerous and have an expansive reach, affecting many health care providers and suppliers in this country. Permitting the rule to go into effect would require CMS to assess thousands of regulations within a relatively short timeframe, and would likely entail a massive expenditure of resources and significantly increase the Department’s workload. The rule would also likely result in significant uncertainty and compliance costs to Medicare providers and suppliers, many of which are small businesses. In addition, this rule could cause the loss of program protections to the beneficiaries of HHS programs and create uncertainty for individuals and entities subject to administrative sanctions, or those who seek reinstatement after exclusion from participation in Federal health care programs. The National Health Law Program also commented at the Public Hearing that the rule would create havoc in the Medicaid industry. See Public Hearing Transcript. All of these potential consequences would be detrimental to the public health, underscoring that justice requires a postponement of the SUNSET final rule’s effective date pursuant to 5 U.S.C. 705. Because of these public health concerns, and the harms alleged by the Plaintiffs and echoed in the comments, the balance of equities and the public interest favor the issuance of a stay of the effective date of the SUNSET final rule to preserve the status quo and allow for judicial review of its legality before any implementation. Accordingly, HHS is issuing this stay of the effective date of this final rule pending judicial review. This postponement applies to all of the regulations established under the SUNSET final rule. As noted above, the Complaint alleges that the SUNSET final rule suffers from a variety of defects, including procedural defects related to its promulgation. The Department believes it is appropriate to review the entire rule in light of the claims raised in the litigation. Thus, this VerDate Sep<11>2014 16:06 Mar 22, 2021 Jkt 253001 postponement reaches the full rule, consistent with the Complaint’s prayer for relief. Separately, this document addresses and corrects several technical errors identified by the Office of the Federal Register in the SUNSET final rule. Corrections In FR 2021–00597 (86 FR 5694), published on January 19, 2021, the following corrections are made: 1. On page 5694, first column, the list of CFR citations in the heading under ‘‘Administration for Children and Families’’ that reads ‘‘45 CFR parts 200, 300, 403, 1010, and 1390’’ is corrected to read ‘‘45 CFR parts 200, 300, 403, 1010, and 1300.’’ 2. On page 5751, first column, the reference to ‘‘45 CFR part 1390’’ in the List of Subjects is corrected to read ‘‘45 CFR part 1300.’’ SUBCHAPTER A [Corrected] 3. On page 5763, first column, in instruction 10, the heading for subchapter A and the table of contents for part 1300 are corrected to read as follows: ■ SUBCHAPTER A—Administrative Matters PART 1300—REVIEW OF REGULATIONS Sec. 1300.1 Retrospective Review of Existing Regulations. 1300.2 through 1300.5 [Reserved] Norris Cochran, Acting Secretary. [FR Doc. 2021–05907 Filed 3–18–21; 4:15 pm] and members within the DoD. Therefore, this part can be removed from the CFR. DATES: This rule is effective on March 23, 2021. FOR FURTHER INFORMATION CONTACT: LTC Mark Rea at 703–695–9262. SUPPLEMENTARY INFORMATION: This rule was last updated on March 2, 1979 (44 FR 11781). It has been determined that publication of this CFR part removal for public comment is impracticable, unnecessary, and contrary to public interest since it is based on removing DoD internal policies and procedures. This rule is redundant in that it established policy, assigned responsibilities, and prescribed procedures for members of DoD on the operation and oversight of the Military Service Academies. These internal policies and procedures are publicly available on the Department’s issuance website. DoD internal policies and guidance are current and reflective of requirements in statute, and will continue to be published in Army Regulation 150–1, ‘‘United States Military Academy Organization, Administration, and Operation’’ (available at https://armypubs.army.mil/ ProductMaps/PubForm/AR.aspx). This rule is not significant under Executive Order (E.O.) 12866, ‘‘Regulatory Planning and Review.’’ List of Subjects in 32 CFR Part 575 Military academies, Military personnel. PART 575—[REMOVED] Accordingly, by the authority of 5 U.S.C. 301, 32 CFR part 575 is removed. BILLING CODE 4150–26–P ■ DEPARTMENT OF DEFENSE James W. Satterwhite Jr., Army Federal Register Liaison Officer. Department of the Army [FR Doc. 2021–05910 Filed 3–22–21; 8:45 am] BILLING CODE 3710–08–P 32 CFR Part 575 [Docket ID: USA–2020–HQ–0008] DEPARTMENT OF HOMELAND SECURITY RIN 0702–AB09 Admission to the United States Military Academy Department of the Army, Department of Defense (DoD). ACTION: Final rule. AGENCY: This final rule removes DoD’s regulation concerning policies for the command and control of the United States Military Academy (USMA), the United States Military Academy Preparatory School (USMAPS), and the West Point Military Reservation. This part applies to organizational entities SUMMARY: PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 Coast Guard 33 CFR Parts 100 and 165 [Docket Number USCG–2021–0184] 2020 Quarterly Listings; Safety Zones, Security Zones, and Special Local Regulations Coast Guard, DHS. Notification of expired temporary rules issued. AGENCY: ACTION: This document provides notification of substantive rules issued SUMMARY: E:\FR\FM\23MRR1.SGM 23MRR1

Agencies

[Federal Register Volume 86, Number 54 (Tuesday, March 23, 2021)]
[Rules and Regulations]
[Pages 15404-15408]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05907]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 6

Public Health Service

42 CFR Part 1

Centers for Medicare and Medicaid Services

42 CFR Part 404

Office of the Inspector General

42 CFR Part 1000

Office of the Secretary

45 CFR Part 8

Administration for Children and Families

45 CFR Parts 200, 300, 403, 1010, and 1300

[Docket No. HHS-OS-2020-0012]
RIN 0991-AC24


Securing Updated and Necessary Statutory Evaluations Timely; 
Administrative Delay of Effective Date; Correction

AGENCY: Department of Health and Human Services (HHS).

ACTION: Final rule; delay of effective date and correction.

-----------------------------------------------------------------------

SUMMARY: The Department of Health and Human Services (HHS or 
Department) is postponing, pending judicial review, the effective date 
of a final rule entitled ``Securing Updated and Necessary Statutory 
Evaluations Timely'' (SUNSET final rule) and published in the Federal 
Register of January 19, 2021. This document also corrects certain 
errors in the SUNSET final rule.

DATES: As of March 19, 2021, the effective date of the final rule 
published January 19, 2021 (86 FR 5694), is delayed pursuant to 5 
U.S.C. 705 for one year until March 22, 2022.
    This correction is effective as of March 22, 2022, and amendatory 
instruction #10 in FR 2021-00597 (86 FR 5694), published on January 19, 
2021, is corrected.

FOR FURTHER INFORMATION CONTACT: Daniel J. Barry, Acting General 
Counsel, 200 Independence Avenue SW, Washington, DC 20201; or by email 
at [email protected]; or by telephone at 1-877-696-6775.

[[Page 15405]]


SUPPLEMENTARY INFORMATION: The SUNSET final rule was scheduled to take 
effect on March 22, 2021. On March 9, 2021, a lawsuit was filed seeking 
to overturn the SUNSET final rule. HHS finds that the interests of 
justice require that the SUNSET final rule's effective date be 
postponed pending judicial review because: Based on HHS's initial 
review of the Complaint, HHS believes that the Court could find merit 
in some of Plaintiffs' claims; Plaintiffs' allegations of harm are 
credible; a postponement will permit HHS to review the SUNSET final 
rule in light of the claims raised in the litigation; and the balance 
of equities and the public interest warrant postponement of the 
effective date to preserve the status quo while the Court considers the 
challenge to the SUNSET final rule. This document also corrects certain 
errors in the SUNSET final rule.
    In the Federal Register of November 4, 2020 (85 FR 70096), HHS 
published a notice of proposed rulemaking entitled ``Securing Updated 
and Necessary Statutory Evaluations Timely'' (SUNSET). Under the rule 
as proposed, subject to certain exceptions, Department regulations 
would expire at the end of (1) two calendar years after the year that 
the SUNSET rule first became effective, (2) ten calendar years after 
the year of the regulation's promulgation, or (3) ten calendar years 
after the last year in which the Department ``assessed'' and, if 
required, ``reviewed'' the regulation, whichever was latest. Thus, 
under the proposed rule, unless HHS ``assessed'' and, if required, 
``reviewed'' most of its regulations within a certain timeframe 
specified in the rule (for most existing regulations, within two years) 
and every ten years thereafter, the regulations would expire. The 
proposed rule also provided that if a ``review'' led to a finding that 
a regulation should be amended or rescinded, the Department must amend 
or rescind the regulation within a specified timeframe (generally two 
years). In addition, the proposed rule contained certain publication 
requirements, including that (1) the Department publish the results of 
all ``assessments'' and ``reviews,'' including the full underlying 
analyses and data used to support the results, in the Federal Register, 
and (2) the Department announce the commencement of an ``assessment'' 
or ``review'' of a particular regulation on the agency website, with an 
opportunity for public comment. The proposed rule provided that 
comments could be submitted until December 4, 2020, except for comments 
on the portion of the rule amending 42 CFR parts 400-429 and parts 475-
499, which were due by January 4, 2021.
    In the Federal Register of November 16, 2020 (85 FR 73007), HHS 
announced a public hearing, scheduled for November 23, 2020, to receive 
information and views on the proposed rule (Public Hearing).
    In the Federal Register of January 19, 2021 (86 FR 5694), HHS 
issued the SUNSET final rule. The final rule provides that all 
regulations, subject to certain exceptions, issued by the Secretary of 
the Department of Health and Human Services (Secretary) or their 
delegates or sub-delegates in titles 21, 42, and 45 of the CFR shall 
expire at the end of (1) five calendar years after the year that the 
SUNSET final rule first becomes effective, (2) ten calendar years after 
the year of the regulation's promulgation, or (3) ten calendar years 
after the last year in which the Department ``assessed'' and, if 
required, ``reviewed'' the regulation, whichever is latest. Thus, the 
final rule contains the same basic expiration framework as the proposed 
rule, but extends the timeframe for ``assessment'' and any applicable 
``review'' of most existing regulations from two calendar years to five 
calendar years. The final rule also provides for ``continuation'' of a 
regulation that is subject to expiration if the Secretary makes a 
written determination that the public interest requires continuation. 
In addition, the final rule contains exemptions for a small set of 
certain Food and Drug Administration (FDA) regulations. The final rule 
maintains the timeframe for amendment or rescission of regulations, as 
well as the publication requirements, and includes a new Federal 
Register publication requirement. The final rule also expands its reach 
to include additional provisions regarding parts of HHS not 
specifically included in the proposed rule. The final rule states that 
its effective date is March 22, 2021.
    On March 9, 2021, the County of Santa Clara, California Tribal 
Families Coalition, National Association of Pediatric Nurse 
Practitioners, American Lung Association, Center for Science in the 
Public Interest, and Natural Resources Defense Council sued the 
Department seeking to overturn the SUNSET final rule under the 
Administrative Procedure Act (APA). Complaint, County of Santa Clara v. 
HHS, Case No. 5:21-cv-01655-BLF (N.D. Cal.). Plaintiffs allege that the 
SUNSET final rule is ultra vires, see id. ]] 123-30; arbitrary and 
capricious, see id. ]] 131-33; in violation of the APA's notice-and-
comment requirements, see id. ]] 134-39; and in violation of HHS's 
Tribal Consultation Policy, see id. ]] 140-44. Plaintiffs further 
allege that the SUNSET final rule threatens imminent and irreparable 
harm to them and the general public, including by creating regulatory 
confusion and uncertainty that will impede their ongoing operations, 
budgeting, and planning activities. See, e.g., id. ]] 100-02; see 
generally id. ]] 95-122.
    Under 5 U.S.C. 705 of the APA, an agency ``may postpone the 
effective date of action taken by it, pending judicial review,'' when 
the ``agency finds that justice so requires.'' HHS has concluded that 
the interests of justice require that the SUNSET final rule be stayed 
pending judicial review. As discussed in greater detail below, HHS 
believes that the Court may find merit in some of Plaintiffs' claims, 
that Plaintiffs' allegations of harm are credible, and that the balance 
of equities and the public interest warrant postponement of the 
effective date pending judicial review. Accordingly, the interests of 
justice require a postponement in order to preserve the status quo, 
because, if the rule took effect while HHS was evaluating the rule in 
light of the claims raised in litigation, it could create significant 
obligations for HHS, cause confusion for the public, including 
Plaintiffs, and may lead to compliance costs as entities, including 
Plaintiffs, plan steps necessary to deal with the rule's 
implementation, as explained below. HHS is unaware of any benefits from 
the implementation of the SUNSET final rule that would be significantly 
curtailed from a stay of its effective date.
    The Department is taking a fresh and critical look at the SUNSET 
final rule in light of the allegations in the Complaint (although many 
of these concerns were also raised during the comment period on the 
proposed rule). The Complaint alleges serious legal vulnerabilities of 
the rule, and, while HHS does not concede any of these claims at this 
time, HHS requires additional time to evaluate the SUNSET final rule 
given the pending litigation. In addition, the Complaint raises the 
question as to whether the SUNSET final rule, issued in the final days 
of the last administration, is consistent with the policies and goals 
of the current administration, both in terms of the appropriate role of 
regulatory oversight of the health care industry and necessary 
engagement with the public, including tribal organizations.
    The Complaint makes numerous allegations that the substantive 
provisions of SUNSET final rule violate the law. The Complaint alleges 
that the SUNSET final rule is contrary to and

[[Page 15406]]

exceeds the Department's authority under the APA, substantive organic 
statutes, and the Regulatory Flexibility Act (RFA) because it schedules 
the rescission of thousands of regulations that were required by 
statute, amends regulations without the same level of process and 
statutory considerations required for the original regulations, and 
provides for automatic elimination of regulations without considering 
the requirements of the RFA. The Complaint further alleges that the 
SUNSET final rule is arbitrary and capricious and lacks a rational 
basis because, among other reasons, it assumes that HHS will conduct 
RFA reviews at an implausible pace; does not adequately consider the 
extreme degree of regulatory uncertainty the SUNSET final rule creates; 
underestimates the burden imposed on Plaintiffs for monitoring HHS 
regulations to ensure they do not expire; and fails to consider the 
specific regulations being amended to automatically expire.
    Given the volume of HHS agency regulations that the Department 
would need to assess and, as applicable, review in a short period of 
time, HHS now believes it is likely some regulations would expire 
without any additional administrative process (contrary to the 
conclusions reached in the SUNSET final rule). Under the SUNSET final 
rule, for each covered regulation, HHS agencies would need to: Collect 
data to conduct the relevant evaluation, perform an assessment and 
possibly a review, consider any comments to the public docket related 
to the evaluation, publish the results of this process in the Federal 
Register (``including the full underlying analyses and data used to 
support the results,'' 86 FR at 5712), and, if warranted, complete a 
rulemaking to amend or rescind the regulation, which would itself 
require an additional investment of agencies' resources and public 
input. If the work is unable to be conducted within the final rule's 
time frames, the regulations would expire.
    That outcome could raise interrelated administrative law questions 
regarding: Whether regulations promulgated through notice and comment 
rulemaking can be terminated through an umbrella rule without 
individualized consideration of the expiring regulations, including any 
reliance interests of parties affected by them; and, if so, whether the 
proposed/final rule provided an adequate justification for implementing 
a process of automatic expiration.
    The expiration component of the SUNSET final rule also raises 
significant policy and public health questions concerning the value of 
the assessment and review processes and whether those processes are so 
important that they outweigh the value of the regulations that would 
likely expire.
    The potential automatic expiration of regulatory programs could 
create uncertainty and unpredictability regarding large swathes of the 
rules governing health care, which would upend the status quo and in 
turn could result in compliance costs to HHS grantees, contractors, and 
health care providers and suppliers, many of whom may have structured 
matters such as financial arrangements and business operations to 
satisfy the conditions set forth in the current regulations. The 
resulting disruption in the marketplace could impact stakeholders who 
rely on the regulatory functions of each HHS agency. This uncertainty 
could have serious implications for insurance markets, hospitals, 
physicians, and patients, among other affected parties, which could 
lead physicians and other regulated entities to forgo future 
investments because of the lack of clarity. In addition, because States 
depend on HHS to set national standards and have built vast regulatory 
systems within that framework, the possibility that many regulations 
would lapse could pose a direct threat to the States' healthcare 
systems and the health and safety of individuals. The expiration of 
regulations could also muddle the clarity and predictability of 
existing regulations, which in turn would impede program implementation 
and reduce HHS's overall efficiency.
    HHS is similarly concerned that the SUNSET final rule may have 
significantly underestimated the burden of the assessments and reviews 
for this magnitude of regulations and fails to account for the 
substantial resources that would be needed for the HHS agencies to 
simultaneously evaluate thousands of regulations in a short period of 
time. For example, the Regulatory Impact Analysis (RIA) included in the 
final rule appears to focus on the number of staff and staff hours 
required for ``reviews,'' but provides an incomplete estimate for the 
cost of the initial ``assessment'' phase. That raises questions 
regarding whether the RIA significantly underestimated the costs that 
will be incurred by agencies and overestimates the purported cost 
savings. Currently, there is no accurate impact analysis of the 
substantial redirection of resources (both financial and employee) 
required to provide the necessary expertise and input from economists, 
epidemiologists, medical officers, legal and regulatory counsel, and 
other subject matter experts.
    The Complaint also alleges that the promulgation of the SUNSET 
final rule suffered from procedural deficiencies. Plaintiffs allege 
that, despite widespread requests for more time, HHS issued the SUNSET 
final rule after providing 30 days to comment on the rule's effect on 
non-Medicare regulations and 60 days to comment on its effects on 
Medicare regulations, seriously interfering with meaningful public 
participation. The comments likewise raised concerns about the adequacy 
of the comment period for a rule with this magnitude of impact and the 
timing of the proposal, particularly during the COVID-19 pandemic, both 
of which may have impeded the full and deliberate consideration of all 
of the potential issues related to the SUNSET rule. For example, at the 
Public Hearing, almost all commenters agreed that HHS should have 
lengthened the comment period, and offered several reasons in support 
of a longer comment period, all of which were expressed by multiple 
commenters: That a proposal with this breadth, scope, and potential 
harmful impact, including unintended detrimental consequences to 
regulated industries, merited more time for thoughtful public input; 
that impacted stakeholders included small businesses that would not be 
able to digest and comment on a rule of this breadth in such a short 
period of time; that it was irresponsible for HHS to engage in this 
rulemaking during the height of the pandemic when stakeholder resources 
were devoted to addressing the public health emergency; and that the 
already short comment period included Thanksgiving weekend, which 
exacerbated the time-crunch for commenters. See Transcript, Public 
Hearing on the Securing Updated and Necessary Statutory Evaluations 
Timely Notice of Proposed Rulemaking (Public Hearing Transcript) (Nov. 
23, 2020) (available at https://www.regulations.gov/document/HHS-OS-2020-0012-0501). As with Plaintiffs' above substantive claims, HHS 
requires additional time to review the SUNSET final rule's compliance 
with these procedural obligations, in light of Plaintiffs' claims, 
before determining how to proceed in litigation and before creating 
uncertainty among the regulated community. The SUNSET final rule is 
uniquely situated in that it affects an extraordinarily large number of 
regulations, which lends support for Plaintiffs' procedural claims.
    The Complaint also alleges that, despite the SUNSET final rule's 
sweeping scope and tribal implications, the Department neglected to 
consult

[[Page 15407]]

with tribal governments. Again, these same concerns were raised in the 
written comments on the SUNSET proposed rule. Under Executive Order 
13175, entitled ``Consultation and Coordination With Indian Tribal 
Governments,'' HHS is required, before any action is taken that will 
significantly affect Indian Tribes, to consult with Indian Tribes in 
the development of the proposed rule to the extent practicable and 
permitted by law. 65 FR 67249 (Nov. 6, 2000). This required 
consultation is in recognition that Tribes should be afforded an 
opportunity to comment meaningfully on the rule's impact. However, 
multiple comments from representatives of several Tribes and related 
groups explained that, despite the enormous impact that this rule, if 
implemented, would have on Tribes, HHS failed to consult with Tribal 
governments (or even notify them regarding the proposal), contrary to 
procedures required under Executive Order 13175. See, e.g., Comments 
from the: Saint Regis Mohawk Tribe; Chickahominy Indian Tribe; Jena 
Band of Choctaw Indians; Nez Perce Tribe; Affiliated Tribes of 
Northwest Indians; Mohegan Tribe of Connecticut; Tanana Chiefs 
Conference; Chippewa Cree Tribe of the Rocky Boy's Reservation; Alaska 
Native Tribal Health Consortium; United South and Eastern Tribes 
Sovereignty Protection Fund; Northwest Portland Area Indian Health 
Board; Quinault Indian Nation; California Tribal Families Coalition; 
National Indian Child Welfare Association; Tribal Law and Policy 
Institute; Tribal Technical Advisory Group; Native American Rights 
Fund, and the National Congress of American Indians, available at 
https://www.regulations.gov/document/HHS-OS-2020-0012-0001/comment. In 
light of the allegations in the Complaint, we need to reconsider the 
conclusion in the SUNSET final rule that the rule does not 
significantly affect Indian Tribes or have Tribal implications. 
Accordingly, HHS requires additional time to review the SUNSET final 
rule in light of the pending litigation.
    In publishing the SUNSET final rule, the Department previously took 
the position that the rule complies with the APA and that the comment 
period was adequate, among other things. The Department's conclusions 
rested on certain assumptions that the Complaint challenges. For 
example, the Department expressed a view that it has the resources to 
complete assessments and reviews and avoid expiration, thus avoiding 
many of the legal concerns related to automatic repeal of regulations. 
See, e.g., 86 FR 5694, 5705 (``The regulatory impact analysis in this 
final rule explains how HHS has the resources and personnel to perform 
the Assessments and Reviews called for by this final rule.''); id. at 
5710 (``HHS does not intend to allow a regulation to simply expire.''); 
id. at 5711 (``HHS believes that this final rule does not significantly 
affect Indian Tribes or have Tribal implications . . . HHS intends that 
all rules will be Assessed and (if necessary) Reviewed timely. 
Therefore, this final rule would have no direct impact on Indian 
Tribes''); id. at 5714 (``The Department does not intend for any 
regulations to inadvertently sunset, and it is unlikely that any 
regulations with significant benefits would slip through the 
cracks.''). However, the Complaint alleges that ``there is no realistic 
probability that the Department will be able to conduct the number of 
reviews required to prevent automatic rescission,'' based in part on 
the quantity of analyses that would be required in the first five years 
and the agency's past practices. Complaint, ]] 84-85. As noted above, 
the Department now believes that the RIA developed for the SUNSET final 
rule may not have fully taken into account all of the resource 
implications of this rule and therefore misjudged the likely expiration 
of existing regulations, elevating the administrative law concerns and 
concerns about the adequacy of the RIA.
    In addition, the Department previously took the view that a 30-day 
comment period was adequate. However, the Complaint challenges the 
sufficiency of a 30-day comment period for complex rules, Complaint, ] 
54, and the SUNSET rule's unique breadth, affecting an extraordinarily 
large number of regulations, could add force to such claims. The 
Department also took the view that the lack of tribal consultation was 
mitigated by the fact that Tribes will be able to comment on 
regulations during the Assessment and Review processes, 86 FR at 5711, 
but, as noted above, HHS is reconsidering that conclusion in light of 
the claims raised in the Complaint.
    The Complaint also alleges that Plaintiffs and others are 
immediately harmed by the SUNSET final rule. The Complaint alleges that 
the uncertainty resulting from its implementation impacts the entire 
healthcare sector, which accounts for nearly one-fifth of the U.S. 
economy and secures individual and community health for hundreds of 
millions of Americans, and that participants in every single industry 
the Department regulates, including Plaintiffs, must plan their futures 
and operations without knowing what regulations will govern their 
businesses in these notoriously complex regulatory arenas. See 
Complaint, ]] 2, 95-122. While HHS does not concede that Plaintiffs 
would establish irreparable harm in litigation, HHS agrees that it is 
appropriate to postpone the effective date of the SUNSET final rule to 
preserve the status quo and to ensure that HHS has time to evaluate the 
rule before it takes effect to avoid the possibility of confusion among 
the regulated community.
    In addition, given the scope of work and timeframes set forth in 
the SUNSET final rule, the review required under the rule would divert 
the Department's resources from mission-critical endeavors for HHS 
agencies. For example, based on a count cited in the SUNSET final rule, 
under the timeline and definitions provided in the final rule, over 
7,000 sections of the Code of Federal Regulations promulgated by the 
Food and Drug Administration (FDA) are more than ten years old or would 
become more than ten years old during the first five years the rule 
would be in effect, representing over 95 percent of its current 
regulations. Unless one of the exemptions applied, these regulations 
would need to be assessed within five years and, if applicable, 
reviewed, or be subject to expiration. If the SUNSET final rule were to 
become effective as scheduled on March 22, 2021, then, in order to meet 
these new obligations within the specified timeframe to avoid automatic 
expiration of its regulations, FDA and the Department would need to 
immediately divert resources toward assessment and review during the 
ongoing COVID-19 public health emergency. In that event, FDA's reviews 
of medical product applications, fulfillment of user fee commitments, 
and actions to address urgent public health matters such as ongoing 
COVID-19 pandemic relief efforts, outbreaks of foodborne illness, 
inspections, recalls, and other public health priorities would be 
significantly impacted. This concentration of resources in conducting 
regulatory review pursuant to the SUNSET rule could prevent FDA from 
modernizing its regulatory oversight more efficiently and addressing 
new regulatory needs. These considerations further support HHS's 
determination that justice requires a postponement of the SUNSET final 
rule's effective date. See 5 U.S.C. 705.
    The SUNSET final rule presents similar burdens for HHS's seven 
other Public Health Service agencies and three human services agencies, 
such as the Centers for Medicare & Medicaid Services (CMS), with 
implications for

[[Page 15408]]

many initiatives. For example, comments at the Public Hearing from the 
American College of Obstetricians and Gynecologists, Center on Budget 
and Policy Priorities, National Immigration Law Center, and Service 
Employees International Union raised concerns that the SUNSET rule 
would undermine the regulations underpinning the Affordable Care Act, 
potentially with catastrophic consequences for the health care of 
millions of individuals and families. See Public Hearing Transcript. As 
another example, Medicare regulations are numerous and have an 
expansive reach, affecting many health care providers and suppliers in 
this country. Permitting the rule to go into effect would require CMS 
to assess thousands of regulations within a relatively short timeframe, 
and would likely entail a massive expenditure of resources and 
significantly increase the Department's workload. The rule would also 
likely result in significant uncertainty and compliance costs to 
Medicare providers and suppliers, many of which are small businesses. 
In addition, this rule could cause the loss of program protections to 
the beneficiaries of HHS programs and create uncertainty for 
individuals and entities subject to administrative sanctions, or those 
who seek reinstatement after exclusion from participation in Federal 
health care programs. The National Health Law Program also commented at 
the Public Hearing that the rule would create havoc in the Medicaid 
industry. See Public Hearing Transcript. All of these potential 
consequences would be detrimental to the public health, underscoring 
that justice requires a postponement of the SUNSET final rule's 
effective date pursuant to 5 U.S.C. 705.
    Because of these public health concerns, and the harms alleged by 
the Plaintiffs and echoed in the comments, the balance of equities and 
the public interest favor the issuance of a stay of the effective date 
of the SUNSET final rule to preserve the status quo and allow for 
judicial review of its legality before any implementation.
    Accordingly, HHS is issuing this stay of the effective date of this 
final rule pending judicial review. This postponement applies to all of 
the regulations established under the SUNSET final rule. As noted 
above, the Complaint alleges that the SUNSET final rule suffers from a 
variety of defects, including procedural defects related to its 
promulgation. The Department believes it is appropriate to review the 
entire rule in light of the claims raised in the litigation. Thus, this 
postponement reaches the full rule, consistent with the Complaint's 
prayer for relief.
    Separately, this document addresses and corrects several technical 
errors identified by the Office of the Federal Register in the SUNSET 
final rule.

Corrections

    In FR 2021-00597 (86 FR 5694), published on January 19, 2021, the 
following corrections are made:
    1. On page 5694, first column, the list of CFR citations in the 
heading under ``Administration for Children and Families'' that reads 
``45 CFR parts 200, 300, 403, 1010, and 1390'' is corrected to read 
``45 CFR parts 200, 300, 403, 1010, and 1300.''
    2. On page 5751, first column, the reference to ``45 CFR part 
1390'' in the List of Subjects is corrected to read ``45 CFR part 
1300.''

SUBCHAPTER A [Corrected]

0
3. On page 5763, first column, in instruction 10, the heading for 
subchapter A and the table of contents for part 1300 are corrected to 
read as follows:

SUBCHAPTER A--Administrative Matters

PART 1300--REVIEW OF REGULATIONS

Sec.
1300.1 Retrospective Review of Existing Regulations.
1300.2 through 1300.5 [Reserved]

Norris Cochran,
Acting Secretary.
[FR Doc. 2021-05907 Filed 3-18-21; 4:15 pm]
BILLING CODE 4150-26-P