Department of Health and Human Services Proposed Repeal of HHS Rules on Guidance, Enforcement, and Adjudication Procedures, 58042-58053 [2021-22503]

Agencies

• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 86, Number 200 (Wednesday, October 20, 2021)]
[Proposed Rules]
[Pages 58042-58053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-22503]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 1

RIN 0991-AC29
[HHS-OS-2020-0008; HHS-OS-2021-0001]


Department of Health and Human Services Proposed Repeal of HHS 
Rules on Guidance, Enforcement, and Adjudication Procedures

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of Health and Human Services (HHS or the 
Department) is proposing to repeal two final rules: ``Department of 
Health and Human Services Good Guidance Practices,'' published in the 
Federal Register of December 7, 2020; and ``Department of Health and 
Human Services Transparency and Fairness in Civil Administrative 
Enforcement Actions,'' published in the Federal Register of January 14, 
2021.

DATES: To be assured consideration, comments must be received at the 
address provided below, no later than 11:59 p.m. November 19, 2021.

ADDRESSES: You may submit comments through the Federal eRulemaking 
Portal: https://www.regulations.gov. Follow the ``Submit a comment'' 
instructions. Warning: Do not include any personally identifiable 
information (such as name, address, or other contact information) or 
confidential business information that you do not want publicly 
disclosed. All comments may be posted on the internet and can be 
retrieved by most internet

[[Page 58043]]

search engines. No deletions, modifications, or redactions will be made 
to comments received. Inspection of Public Comments: All comments 
received before the close of the comment period will be available for 
viewing by the public, including personally identifiable or 
confidential business information that is included in a comment. You 
may wish to consider limiting the amount of personal information that 
you provide in any voluntary public comment submission you make. HHS 
may withhold information provided in comments from public viewing that 
it determines may impact the privacy of an individual or is offensive. 
Warning: Do not include any personally identifiable information (such 
as name, address, or other contact information) or confidential 
business information that you do not want publicly disclosed. For 
additional information, please read the Privacy Act notice that is 
available via the link in the footer of https://www.regulations.gov. 
Follow the search instructions on that website to view the public 
comments.

FOR FURTHER INFORMATION CONTACT: Daniel J. Barry, Acting General 
Counsel, 200 Independence Avenue SW, Washington, DC 20201. Email: 
[email protected]. Telephone: 877-696-6775.

SUPPLEMENTARY INFORMATION:

I. Overview of the Proposed Rule

    HHS is proposing to repeal two rules that were issued in December 
2020 and January 2021 to implement Executive Orders (E.O.s) issued on 
October 9, 2019. One rule relates to guidance document procedures and 
the other relates to civil administrative enforcement and adjudication 
procedures. The Department codified both rules collectively in 45 CFR 
part 1.
    On January 20, 2021, the President, under a new administration, 
revoked both E.O.s that served as the basis for these rules and 
directed agencies to promptly take steps to rescind any rules and 
policies implementing or enforcing the revoked E.O.s, as appropriate 
and consistent with applicable law. Accordingly, the Department has 
reconsidered these rules and now believes that they create unnecessary 
hurdles that hinder the Department's ability to issue guidance, bring 
enforcement actions, and take other appropriate actions that advance 
the Department's mission. The Department continues to abide by its 
longstanding commitment to follow applicable principles of due process 
and administrative law, as a matter of policy; however, upon further 
reflection, we now conclude that these rules significantly burden the 
Department and are inconsistent with the policies and goals of the 
current Administration. Both rules created a single set of procedures 
for guidance documents and civil enforcement for the entire Department, 
which we believe is contrary to the efficient and effective 
administration of the wide array of programs by the Department, given 
the diversity of those programs. For these reasons, as discussed in 
greater detail in this document, and consistent with the President's 
January 20, 2021, directive, we are proposing to repeal both rules.

II. History of the Rulemaking

    On October 9, 2019, the White House issued two E.O.s: Executive 
Order 13891, ``Promoting the Rule of Law Through Improved Agency 
Guidance Documents,'' 84 FR 55235 (Oct. 15, 2019) (E.O. 13891) and 
Executive Order 13892, ``Promoting the Rule of Law Through Transparency 
and Fairness in Civil Administrative Enforcement and Adjudication,'' 84 
FR 55239 (Oct. 15, 2019) (E.O. 13892). These E.O.s served as the basis 
for two rules promulgated by the Department in December 2020 and 
January 2021: ``Department of Health and Human Services Good Guidance 
Practices,'' 85 FR 78770 (Dec. 7, 2020) (GGP rule or the HHS GGP final 
rule, effective January 6, 2021), and ``Department of Health and Human 
Services Transparency and Fairness in Civil Administrative Enforcement 
Actions,'' 86 FR 3010 (Jan. 14, 2021) (the Civil Enforcement rule, 
effective January 12, 2021). The Department codified both rules 
collectively in 45 CFR part 1. Shortly after the rules became 
effective, on January 20, 2021, the President, under a new 
administration, issued Executive Order 13992, which revoked both E.O.s 
that served as the basis for these rules. 86 FR 7049 (Jan. 25, 2021).

A. Revoked Executive Orders

    E.O. 13891, ``Promoting the Rule of Law Through Improved Agency 
Guidance Documents,'' required agencies to treat guidance documents as 
non-binding both in law and in practice, except as incorporated into a 
contract; take public input on guidance documents into account; and 
make all guidance documents available on a single website. 84 FR 55235. 
E.O. 13892, ``Promoting the Rule of Law Through Transparency and 
Fairness in Civil Administrative Enforcement and Adjudication,'' 
imposed a number of procedural hurdles on agencies engaged in civil 
administrative enforcement or adjudication. 84 FR 55239. As noted, both 
of these E.O.s have since been rescinded. 86 FR 7049.
    However, prior to the rescission of these E.O.s, and consistent 
with the directive in E.O. 13891, the Department published the GGP 
rule. Although E.O. 13892 did not require rulemaking, the Department 
also published a final rule to implement E.O. 13892, the Civil 
Enforcement rule.

B. GGP Rule

    On August 20, 2020, consistent with the requirements of E.O. 13891, 
HHS published a notice of proposed rulemaking entitled ``Department of 
Health and Human Services Good Guidance Practices,'' the stated purpose 
of which was to ``promote the appropriate issuance and use of guidance 
documents . . .'' 85 FR 51396. The rule's stated intent was 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. Id.
    The major provisions of the HHS GGP proposed rule were: (1) A 
requirement that each guidance document issued by the Department 
generally include certain information, including a statement that the 
guidance does not have the force and effect of law and is not binding 
unless specifically incorporated into a contract; (2) heightened 
procedures for ``significant guidance documents,'' including a period 
of notice and comment, a requirement for HHS Secretary (Secretary) 
approval on a non-delegable basis, and a requirement for submission to 
the Office of Information and Regulatory Affairs (OIRA) for review 
under Executive Order 12866; (3) creation of a repository for all 
guidance documents along with a provision stating that guidance 
documents not in the repository are not effective and will be 
considered rescinded; and (4) procedures for the public to petition the 
Department to withdraw or modify any particular guidance document.
    HHS proposed that its new requirements for guidance would apply to 
all components of the Department except for the Food and Drug 
Administration (FDA). 85 FR 51396. The preamble to the HHS GGP proposed 
rule explained that FDA already operates under a set of GGP 
regulations, see 21 CFR 10.115, as required by the Federal Food, Drug, 
and Cosmetic Act (FD&C Act), 21 U.S.C. 371(h); no other agency within 
HHS functions under a similar set of regulations or statutory

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provisions. 85 FR 51396. FDA's GGP regulations have been in effect for 
more than two decades. See 21 CFR 10.115. The preamble also explained 
that FDA would be proposing amendments to its GGP regulations to 
address E.O. 13891 separately. 85 FR 51396.
    The Department followed the notice of proposed rulemaking with a 
correction on August 26, 2020. 85 FR 52515. The correction changed 
certain dates by which documents would be required to be in the 
guidance repository or else be deemed rescinded.
    During the comment period for the notice of proposed rulemaking, 
the Department received nearly 90 comments on the proposed rule. 85 FR 
78771. The comments are available at https://www.regulations.gov/document/HHS-OS-2020-0008-0001/comment.
    The Department issued the HHS GGP final rule on December 7, 2020. 
85 FR 78770. In response to public comment and the Department's further 
consideration of the policies addressed in the rule, the HHS GGP final 
rule made several changes to the proposed rule. First, in addition to 
the requirement in the proposed rule that the Secretary approve, on a 
non-delegable basis, all significant guidance documents, the final rule 
added the requirement that the Secretary approve, on a non-delegable 
basis, all non-significant guidance documents that the Secretary 
determines would implicate a policy matter of priority to the 
Secretary; potentially create a serious inconsistency; or otherwise 
interfere with an action taken or planned by another HHS agency or the 
Office of the Secretary. Id. at 78786.
    Second, the HHS GGP final rule added more detail on what 
information the Department needs to provide when responding to a 
petition to amend or withdraw guidance, including a statement on 
whether the Department agrees or disagrees with the petition and its 
rationale. 85 FR at 78787.
    Third, although FDA had been excluded from the scope of the HHS GGP 
proposed rule, the final rule included FDA within its scope. 85 FR at 
78785. The preamble to the HHS GGP final rule explained that one 
commenter had urged HHS to amend FDA's good guidance practices 
regulations to be consistent with the requirements in the HHS GGP 
proposed rule. 85 FR 78771. HHS agreed with this comment, and then 
explained that, because the FDA regulations had not yet been amended to 
address E.O. 13891, FDA would be included in the HHS GGP final rule 
until the Secretary issued a final rule amending FDA's separate GGP 
regulations. Id.\1\
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    \1\ In fact, the Department did not issue a proposed or final 
rule to amend FDA's GGP regulations to address E.O. 13891 before 
January 20, 2021, when E.O. 13891 was revoked.
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    The Department codified the GGP rule in 45 CFR 1.1 through 1.5.

C. Civil Enforcement Rule

    On January 14, 2021, HHS issued a final rule entitled ``Department 
of Health and Human Services Transparency and Fairness in Civil 
Administrative Enforcement Actions.'' 86 FR 3010 (Jan. 14, 2021). The 
Civil Enforcement rule, which was issued as a procedural rule without 
notice-and-comment rulemaking, stated that it was intended to provide 
regulated parties with greater transparency and fairness in 
administrative actions and to be consistent with the requirements of 
E.O. 13892. 86 FR 3010. The Department stated that ``[t]he rule is 
designed to ensure accountability, fairness of how the Department uses 
guidance, proper use of guidance documents, and opportunities for third 
parties to be heard, and to safeguard the important principles 
underlying the United States administrative law system.'' 86 FR 3011.
    The rule contains a number of provisions, including the following: 
(1) A requirement that the agency avoid unfair surprise by only 
applying standards and practices in a civil enforcement action that 
have been publicly stated; (2) a requirement that if the agency relies 
on a decision to assert new or expanded claims of jurisdiction, it must 
publish the initial decision in the Federal Register or the 
Department's guidance repository before the conduct over which the 
jurisdiction is sought occurs; and (3) a requirement that the 
Department give parties--before the agency takes a civil enforcement 
action--written notice of its initial legal and factual determinations, 
an opportunity to respond in writing and in certain cases orally, and a 
written response to the affected entity (when timely requested).
    The Department codified the Civil Enforcement rule in 45 CFR part 
1, by revising Sec. Sec.  1.1 and 1.2, and adding Sec. Sec.  1.6 
through 1.9.

III. Legal Authority

    The legal authority for this proposed rule is 5 U.S.C. 301. That 
provision states in relevant part that ``[t]he head of an Executive 
department or military department may prescribe regulations for the 
government of his department, the conduct of its employees, the 
distribution and performance of its business, and the custody, use, and 
preservation of its records, papers, and property.'' Both the HHS GGP 
final rule and Civil Enforcement rule relied on the same authority.

IV. Discussion of Proposed Rule

    This proposed rule, if finalized as proposed, would repeal both the 
GGP rule and the Civil Enforcement rule, codified collectively in 45 
CFR part 1. 45 CFR part 1 would be reserved. This repeal is consistent 
with the policies of the Biden-Harris Administration as reflected in at 
least three E.O.s issued by President Biden. First, Executive Order 
13992, which is titled ``Revocation of Certain Executive Orders 
Concerning Federal Regulation,'' 86 FR 7049 (Jan. 25, 2021) (E.O. 
13992), revoked both EOs 13891 and 13892 and directed agencies to 
promptly take steps to rescind any orders, rules, regulations, 
guidelines, policies, or portions thereof, implementing or enforcing 
the revoked EOs, as appropriate and consistent with applicable law. As 
explained in Section II, History of the Rulemaking, the Department 
drafted the HHS GGP final rule and Civil Enforcement rule in direct 
response to the revoked EOs; hence, the department has reconsidered 
these rules and has determined it is appropriate to rescind these rules 
in accordance with section 3 of E.O. 13992.
    Further, E.O. 13992 states that it is the policy of the current 
Administration to use available tools to confront the urgent challenges 
facing the nation, including the coronavirus disease 2019 (COVID-19) 
pandemic, economic recovery, racial justice, and climate change. Id. 
E.O. 13992 explained that to tackle these challenges effectively, 
executive departments must be equipped with the flexibility to use 
robust regulatory action to address national priorities. Id. The order 
also stated that it was revoking ``harmful policies and directives that 
threaten to frustrate the Federal Government's ability to confront 
these problems'' and was empowering agencies to use appropriate 
regulatory tools to achieve these goals. Id. As explained in greater 
detail in this document, the Department concludes that both the HHS GGP 
final rule and Civil Enforcement rule inappropriately constrict the 
Department's ability to efficiently interpret and enforce regulations. 
Thus, both rules are inconsistent with the policy expressed in E.O. 
13992 Sec 1, and we are proposing that they be rescinded.
    Second, the E.O. titled ``Advancing Racial Equity and Support for 
Underserved Communities Through the Federal Government,'' 86 FR 7009 
(Jan. 25, 2021) (E.O. 13985), states that it is

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the policy of the Biden-Harris Administration for the Federal 
Government to pursue a comprehensive approach to advancing equity for 
all, including people of color and others who have been historically 
underserved, marginalized, and adversely affected by persistent poverty 
and inequality. The E.O. directed agencies to recognize and work to 
redress inequities in their policies and programs that serve as 
barriers to equal opportunity. Id. Further, both the HHS GGP final rule 
and the Civil Enforcement rules have a disproportionate effect on 
marginalized and vulnerable historically underserved communities, 
because they make it harder for agencies to take action to protect 
public health or remove bad actors from the market, which in turn harms 
those who need HHS services the most. For the GGP rule, commenters 
serving underserved communities explained that programs like Medicaid 
and CHIP rely on guidance to run the program effectively, and the 
effectiveness of the program directly affects the children, older 
adults, people with disabilities, and families these programs serve. 
Thus, a rule that hinders the publication of guidance may in turn harm 
the programs and the populations served, who rely on guidance documents 
to clarify program coverage requirements and have fewer resources to 
determine, for example, how and why guidance may be rescinded. Further, 
commenters pointed out that agency specific websites, such as 
Medicaid.gov, provide easy access to all the applicable guidance. While 
the rule did not preclude agencies from maintaining topical websites 
that contain agency specific guidance, it is much easier for 
organizations with limited resources serving marginalized communities 
to check the topical websites for new guidance than to check the 
repository to determine how and why and whether guidance may have been 
rescinded.
    Third, the E.O. titled ``Strengthening Medicaid and the Affordable 
Care Act,'' 86 FR 7793 (Feb. 2, 2021) (E.O. 14009), states that it is 
the policy of the Biden-Harris Administration for the Federal 
Government to protect and strengthen Medicaid and the ACA and to make 
high-quality healthcare accessible and affordable for every American. 
The E.O. directs HHS, among others, to examine its regulations, 
policies, and the like to ensure that they are consistent with the 
policy of providing high quality and accessible health care for all, 
and do not undermine protections for people with pre-existing 
conditions under the ACA, reduce coverage under or otherwise undermine 
Medicaid or the ACA, or undermine the Health Insurance Marketplace or 
the individual, small group, or large group markets for health 
insurance in the United States. Because HHS frequently issues guidance 
to clarify policies and beneficiary protections under Medicaid, the 
additional regulatory hurdles and confusion created by the HHS GGP 
final rule would likely undermine those goals by impeding and delaying 
the issuance of Medicaid guidance.
    In addition to being inconsistent with this Administration's E.O.s, 
these rules created a single set of procedures for guidance documents 
and civil enforcement for the entire Department, which is incompatible 
with the efficient and effective administration of a Department as 
large and diverse as HHS. The Department's mission is to enhance the 
health and well-being of all Americans, and it accomplishes that 
mission through the work of many individual agencies, including the 
Administration for Children and Families (ACF), the Administration for 
Community Living (ACL), the Centers for Disease Control and Prevention 
(CDC), the Centers for Medicare & Medicaid Services (CMS), FDA, the 
Indian Health Service (IHS), the National Institutes of Health (NIH), 
and the Office for Civil Rights (OCR). Each of HHS's agencies plays a 
critical role in protecting and advancing public health by, for 
example, confronting the COVID-19 pandemic; administering and 
overseeing the Medicaid and Medicare programs and Affordable Care Act 
marketplace; providing federal health services to more than two million 
American Indians and Alaska Natives; taking action to protect consumers 
from unapproved, misbranded, or adulterated human or animal medical 
products or tobacco products; investigating, detaining, and recalling 
contaminated foods; addressing medical product shortages; enforcing 
age-restrictions or other controls around access to certain regulated 
products; and quickly distributing grant funds that help vulnerable 
populations, low-income families, elderly Americans, Indian tribes, and 
persons with disabilities to receive key resources, especially during 
the COVID-19 pandemic. Each agency within HHS serves the overall 
mission but does so in unique ways, often addressing different 
stakeholders and using specialized regulatory tools.
    The imposition of these uniform requirements interferes with 
agencies' established practices and has disrupted agencies' 
relationships with stakeholders. FDA also faces a separate challenge 
with the GGP rule of simultaneously implementing two distinct GGP 
regulatory frameworks--its own, and that of the HHS GGP final rule--
which is particularly inopportune at a time when rapid scientific 
advancements, as well as ongoing efforts to address the COVID-19 
pandemic, warrant that FDA retain the ability to issue and revise 
guidance documents in a timely manner. As discussed in greater detail 
in Section A.1, like FDA, other HHS agencies rely on this flexibility 
to issue timely guidance and quickly share valuable information with 
stakeholders. Further, as discussed in section B, HHS agencies have 
developed their own processes for civil administrative enforcement that 
are unique to the specific requirements of each program. Accordingly, 
the Department no longer believes that a one-size-fits-all approach to 
Department guidance or civil administrative enforcement is appropriate 
and has concerns that the rules, imposing one set of requirements for 
its vastly different HHS agencies, may hinder the agencies' abilities 
to efficiently address public health issues, including but not limited 
to public health emergencies.
    In light of the reasons explained in this section, the Department 
has taken a renewed and critical look at the HHS GGP and Civil 
Enforcement rules and has concluded that both rules frustrate the 
Department's ability to efficiently direct and operate in the interest 
of public health and are inconsistent with the policies and goals of 
the current Administration. The rules make Department operations more 
cumbersome and burdensome, impeding the Department's ability to quickly 
communicate its regulatory interpretations, policies, and 
recommendations, and use robust tools such as circulars, bulletins, 
advisories and other guidance documents to protect and advance the 
national public health and to promote the Department's mission. 
Accordingly, for the reasons previously stated, as well as specific 
concerns with each rule discussed in this section, HHS is proposing to 
repeal both rules in their entirety and remove 45 CFR part 1.
    As a procedural matter, we have chosen to engage in notice-and-
comment rulemaking for both rules. The Civil Enforcement rule was 
issued without notice and comment under the Administrative Procedure 
Act (APA), 5 U.S.C. 553, because the Department determined that it was 
a rule of agency organization, procedure, or practice. 86 FR 3010. The 
requirements for notice and comment prior to finalization also do not 
apply to regulations that involve ``a matter relating to agency

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management or personnel.'' 5 U.S.C. 553(a)(2). Because the Department 
issued the Civil Enforcement rule without going through notice-and-
comment rulemaking, HHS could repeal the Civil Enforcement rule without 
prior notice and comment based on the well-established principle ``that 
agencies use the same procedures when they amend or repeal a rule as 
they used to issue the rule in the first instance.'' Perez v. Mortg. 
Bankers Ass'n, 575 U.S. 92, 101 (2015). Similarly, although the 
Department chose to issue the GGP rule through notice-and-comment 
rulemaking, we note that generally the HHS GGP final rule involves 
matters relating to agency procedure and practice that did not require 
notice-and-comment rulemaking before promulgation. We also note that 
other departments and agencies have recently rescinded similar rules, 
and most have proceeded without notice-and-comment rulemaking at both 
the initial rulemaking and repeal stage. Nevertheless, to ensure 
transparency and public participation, and because the provisions of 
the two rules are codified in the same part of the Code of Federal 
Regulations with some overlapping and related provisions, the 
Department has opted in its discretion--for substantive and procedural 
clarity--to proceed with notice-and-comment rulemaking to repeal both 
rules together and in their entirety.

A. GGP Rule (45 CFR 1.1 Through 1.5)

1. Department-Wide Concerns Regarding the HHS GGP Final Rule
    The Department is proposing to repeal the HHS GGP final rule for 
the following interrelated reasons: (1) It delays or prevents the 
issuance of guidance documents, which provide valuable information to 
stakeholders and the general public, including historically underserved 
populations; (2) it imposes uniform, inflexible requirements on 
agencies that do not adequately account for the agencies' different 
operations and are likely to cause confusion among regulated entities 
and members of the public; (3) it mandates the use of a guidance 
repository and provides for the rescission of guidance absent any 
active policy consideration by the agency, which may lead the public to 
believe that certain active policies are rescinded; and (4) it diverts 
limited agency resources that the Department now believes are better 
directed elsewhere.
    Delay or Prevent Issuance of Guidance Documents. The procedures 
required in Sec.  1.3 for the issuance of guidance documents have the 
potential to delay or impede the issuance of a significant portion of 
HHS guidance documents that play an important part in effective 
communication with stakeholders and enhance public health. For example, 
the rule establishes substantial, time-consuming, and resource-
intensive requirements for the issuance of ``significant guidance 
documents.'' See 45 CFR 1.3(b). Required procedures for significant 
guidance documents include submitting such documents to the Office of 
Information and Regulatory Affairs (OIRA) in the Office of Management 
and Budget (OMB) for review prior to publication, providing a public 
notice-and-comment process, generating an agency response to major 
concerns raised during the comment period, complying with applicable 
requirements for significant regulatory actions as set forth in 
Executive Orders, and obtaining approval by the Secretary on a non-
delegable basis. Id. Each of these steps takes considerable time, 
effort, and Department resources to accomplish. Moreover, under the 
rule, all of these steps are required in combination before a 
significant guidance can be finalized.
    As a matter of the policy, the Department is no longer convinced 
that these burdens are justified for non-binding agency guidance 
documents. The additional procedures provide little value, because the 
Department already has all the tools it needs to ensure adequate public 
notice and participation in the guidance process, and a one size fits 
all approach of the procedures fails to accommodate the range of 
guidance practices of HHS operational divisions. Moreover, the net 
effects of this requirement are serious burdens on the Department and 
an overall process that could unduly extend the time needed to 
promulgate significant guidance. This result is particularly concerning 
if the definition of significant guidance is construed to apply to a 
large number of guidance documents, in light of the potential 
cumulative effects.
    The GGP rule imposes additional steps on the process of issuing 
non-significant guidance as well. For non-significant guidance, Sec.  
1.3 requires Secretarial approval under certain circumstances, which 
could delay the issuance of these guidance documents by drawing on the 
Secretary's finite time and resources. Further, this requirement could 
delay even non-significant guidance that do not require Secretarial 
approval because the process requires the Secretary to make an 
affirmative decision on whether a document requires Secretarial 
approval.
    The Department has determined that the delay or non-issuance of 
guidance documents could have substantial negative consequences for the 
public, including for regulated entities. Guidance holds an important--
and legally distinct--place in the Department's regulatory toolbox: It 
provides an approach to communicating the Department's policies and 
interpretations that can be more immediate and clearer than case-by-
case adjudication, as well as faster and more flexible than legislative 
rulemaking. Through guidance, traditionally, the Department has been 
able to quickly and responsively communicate its agencies' non-binding 
current thinking regarding legal interpretations, recommendations, and 
policies. Guidance can be helpful, for example, to provide information 
relevant to a subset of regulated entities, address technical issues, 
give current examples, and keep pace with rapid advancements in science 
and technology. While this pathway has been important in a wide array 
of contexts, it is essential in areas of uncertainty, confusion, or 
rapid scientific or technological development, where clarity is needed 
to protect the public health and foster industry confidence and 
business investments.
    Timely guidance is particularly important to parties that are 
subject to Department regulation. Guidance can assist regulated 
industries by helping guard against unequal treatment, unnecessary 
costs, and unnecessary risk. For example, for medical product 
developers who are engaged in expensive, multi-year development 
programs with the ultimate objective of finding a proper path to 
satisfy FDA's approval standards, guidance documents can provide 
recommendations on how to satisfy regulatory requirements and can 
describe how FDA staff applies those requirements to particular types 
of situations. This allows developers to design and invest in their 
product development strategy with more clarity and more confidence. The 
timely issuance of FDA guidance documents helps to accelerate the 
development and availability of innovative new products (or competitors 
to products already on the market) by: Encouraging particular 
methodologies, such as clinical trial models, to identify evidence that 
helps expedite product review; giving advice on how emerging 
technologies and breakthrough drugs and devices can meet FDA 
requirements for approval or clearance; and explaining FDA processes 
and procedures, including processes for premarket review, so developers 
can navigate those processes more quickly.

[[Page 58047]]

    Having a robust, efficient guidance system has been especially 
critical during the COVID-19 emergency. FDA COVID-19-related guidance 
documents have addressed shortages of essential products including 
gowns, masks, gloves, and ventilators; the development of vaccines and 
drug products to prevent and treat COVID-19; recommendations for 
validating COVID-19 tests and evaluating the impact of viral mutations 
on COVID-19 tests; and even COVID-19-related effects on the food supply 
chain. The expeditious publication of the Office of Civil Rights 
guidance related to the Health Insurance Portability and Accountability 
Act (HIPAA) during the COVID-19 pandemic also served to communicate 
critical information to health care providers and the public about 
sharing and accessing protected health information. In the context of 
Federal financial assistance, guidance allowed the agency to issue 
grant funds quickly, which has been essential to providing states and 
tribes with information on permissible uses of funds to help vulnerable 
families, refugees, and foster children during the COVID-19 pandemic. 
For example, ACF's Children's Bureau used a guidance document to 
provide information to states on how they could use supplemental 
funding under the Child Abuse Prevention and Treatment Act and the 
Community-Based Child Abuse Prevention program provided by the American 
Rescue Plan Act. By issuing guidance quickly, Children's Bureau was 
able to, shortly after the passage of the law, provide states with 
information on how to apply for the funds and use them so that the 
funds could be used to promote the safety and well-being of children 
during the on-going pandemic.
    The Department expressed a contrary assessment in the final rule, 
concluding that the benefits of receiving stakeholder input generally 
outweigh any administrative costs or incremental delays. 85 FR 78778. 
The Department also pointed to the exceptions process for significant 
guidance documents under Sec.  1.3(b)(2)(ii), 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. Id. The Department considered this exceptions process 
to be sufficient to preserve flexibility during public health 
emergencies. Id.
    As a matter of policy, the Department is no longer convinced that 
the benefits of receiving stakeholder input outweigh any administrative 
costs or incremental delays in the case of public health emergencies. 
The Department now disagrees that the exceptions process for 
significant guidance documents provides sufficient flexibility for the 
Department to respond to public health emergencies. To rely on the 
exception under Sec.  1.3(b)(2)(ii), the Department would still need to 
make findings that public comment would be impracticable, unnecessary, 
or contrary to the public interest and incorporate the findings and a 
statement of the reasons into the guidance document. Even if the 
exceptions could be met during a public health emergency, these 
additional processes would still need to be followed and would still 
consume time and resources in a situation where time and resources are 
limited. In addition, the unprecedented nature of the COVID-19 pandemic 
has underscored the need for the Department to be able to act quickly 
during public health emergencies.
    Retaining the HHS GGP final rule, with its relative lack of 
flexibility and procedural burdens that go far beyond what is needed 
for a transparent and inclusive guidance process, unduly hampers the 
Department's mission, particularly at this critical time. While the 
Department is aware that the GGP rule permits significant guidance 
documents to be exempted from applicable requirements ``if the 
Secretary [of HHS] and the Administrator of OIRA agree that exigency, 
safety, health, or other compelling cause warrants the exemption,'' the 
documents may be exempted only if several burdensome conditions are 
met. Specifically, for exemption, the Secretary and Administrator must 
come to the described agreement, the Secretary ``must make this 
finding,'' and ``the significant guidance document must incorporate the 
finding and a brief statement of reasons in support.'' See 45 CFR 
1.3(b)(4). Thus, even where this pathway is taken, as a matter of 
policy HHS is now concerned that the procedural burdens of the rule may 
inappropriately delay guidance during an emergency.
    The Department has reconsidered the relative merits of an 
efficient, flexible guidance process and weighed them against the 
processes finalized in the HHS GGP final rule. Ultimately, the 
Department favors an approach that is consistent with the 
Administrative Procedure Act (APA), which exempts non-binding documents 
like interpretive rules and general statements of policy from notice-
and-comment rulemaking requirements.\2\
---------------------------------------------------------------------------

    \2\ See, e.g., American Hosp. Ass'n v. Bowen, 834 F.2d 1037, 
1045 (D.C. Cir. 1987) (``The reading of the [section] 553 exemptions 
that seems most consonant with Congress' purposes in adopting the 
APA is to construe them as an attempt to preserve agency flexibility 
in dealing with limited situations where substantive rights are not 
at stake.'').
---------------------------------------------------------------------------

    Confusing and Unhelpful Uniform Standards. As mentioned previously 
in this document, the GGP rule imposes identical requirements on 
agencies with different legal authorities and mechanisms for achieving 
their mission. This attempt to fit vastly different documents into one 
rubric is unnecessary, counterproductive, and likely to confuse the 
public about the role of different documents. HHS now believes that 
more flexibility is appropriate in light of the different roles and 
responsibilities of the agencies within the Department.
    For example, Sec.  1.3(a)(3)(i) of the GGP rule requires every 
guidance document to bear the following statement: ``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.'' Although the 
Department previously concluded that this statement is unlikely to be 
confusing, 85 FR 78778, upon reconsideration, the Department is now 
concerned that this universal statement is not appropriate for and 
cannot cover the range of HHS documents that fall within the definition 
of ``guidance document'' under Sec.  1.2(a). A better approach would be 
for each agency to provide information that is appropriate to the 
agency's stakeholders and the expected uses of the particular document, 
while acknowledging the document's non-binding nature under the APA. An 
FDA guidance document may discuss enforcement priorities, for example, 
and any standard guidance statement for FDA guidance should account for 
that. An ACF document providing guidance on the requirements of a 
regulation can indicate that its provisions may become incorporated 
into the terms and conditions of a grant agreement, which has 
contractual aspects that bind both the government and the grantee.
    Furthermore, the Department is concerned that the required 
statement that incorporation of provisions of a guidance document into 
a contract would render the guidance binding may be confusing to the 
public. While the terms of the contract may be binding, that is, the 
contractual parties must

[[Page 58048]]

follow the guidance due to the contract terms, the guidance itself 
remains non-binding. The GGP rule's required statement suggests, to the 
contrary, that the nature of the guidance is altered by the contract.
    The Department is similarly concerned about the ambiguity of the 
term ``contract,'' especially as it relates to assistance agreements, 
such as grants and cooperative agreements. While it is understood that 
assistance agreements have contractual aspects, in several other 
contexts the Department draws a clear legal and programmatic 
distinction between contracts and assistance agreements. For example, 
the Federal Grants and Cooperative Agreement Act, 31 U.S.C. 6301-6308, 
distinguishes between grants and contracts by explaining that agencies 
should use contracts for the direct benefit of the Federal Government, 
and agencies should use grants when the principal purpose of an 
agreement is the transfer of anything of value for a public purpose. 
Nevertheless, both contracts and grants require entering into an 
agreement that binds both parties to its terms, including terms found 
in guidance documents. The undefined nature of such a key term in a 
required disclaimer term could create uncertainty and confusion within 
the Department and among the public.
    Like the disclaimer on guidance documents, the definition of 
``guidance'' in 45 CFR 1.2 is vague and overly broad and could lead to 
confusion over the type of documents subject to the rule's 
requirements. ``Guidance'' is defined, in part, as a ``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.'' See 45 CFR 1.2(a). In 
addition, the preamble to the HHS GGP proposed rule provided that 
``guidance may come in a variety of forms, including, but not limited 
to, letters, memoranda, circulars, bulletins, advisories, and preambles 
and may include video, audio, and Web-based formats.'' 85 FR 51396. 
Contrary to the previous conclusion that this definition is not 
confusing, 85 FR 78772, upon reconsideration, this broad definition and 
understanding could be read to encompass an entire range of documents 
not intended to serve as guidance, such as resolution documents, 
agreements and case closure letters, and memoranda published on 
Department agency websites to inform and educate the general public and 
regulated entities about agency enforcement activities.
    HHS has rejected the alternative approach of addressing these 
problems by revising the rule. It would be difficult to establish 
definitions, standard descriptors, policies, and procedures that are 
clear and that are workable across the Department's many components. As 
a matter of policy, we now believe it is much better to allow 
flexibility in approach. With the repeal of this rule, the agencies 
would be able to develop policies, practices, and rules, consistent 
with applicable law and as appropriate to their context, and they would 
be able to update these over time as warranted. This more decentralized 
approach is also consistent with the revocation of E.O. 13891, which 
had taken a relatively centralized and standardized approach.
    Repository. 45 CFR 1.4 provides for a repository that includes all 
Department guidance documents. Section 1.4(a)(2) of the rule deems any 
guidance document not in the repository rescinded. Although the 
Department plans to maintain a guidance document repository, it now 
considers the provisions of the HHS GGP final rule governing the 
repository to be inappropriate and unnecessary, particularly with 
respect to the rescission requirement for documents not in the 
repository.
    Although the Department previously concluded that the automatic 
rescission of guidance documents not included in the repository would 
improve transparency and decrease confusion, 85 FR 78781, upon 
reconsideration, the Department now has serious reservations about that 
conclusion. The rescission requirement creates additional burdens among 
stakeholders by causing confusion about which guidance documents have 
been rescinded, superseded, or otherwise become obsolete. Even if a 
guidance document is posted on an HHS website, it is rescinded by the 
GGP rule if it is not in the repository, see Sec.  1.4(a)(3)(ii); 
rescission can occur simply because a guidance is not uploaded to or is 
removed from the repository due to human error or technical failures, 
even if it is publicly available elsewhere. The Department acknowledged 
in the preamble to the final rule that accidental rescission can occur 
in this manner. CMS has since encountered difficulties, particularly 
when establishing automatic processes for publishing guidance documents 
in the repository. These difficulties have required time and resources 
to address, and at times CMS has had to resort to a cumbersome manual 
process to publish the guidance documents. A concern is that, if any 
document is omitted from the repository, even inadvertently, as a 
result of using the manual approach, it is rescinded.
    The Department also questions whether this rescission approach is 
consistent with the APA. The APA requires that an agency consider 
relevant factors and make policy choices based on those factors.\3\ It 
is not clear that rescission of a policy due to human error, oversight, 
or a technical failure meets these standards. In addition, the 
Department is concerned that serious questions and problems would arise 
if a guidance document is ``rescinded'' under the GGP rule, even for a 
finite period of time, when the guidance in question continues to 
reflect agency interpretations and policies. In that event, regulated 
entities would face a high degree of uncertainty as to the Department's 
current thinking--whether the current thinking is still the same as 
described in the rescinded guidance or has changed significantly--
particularly in light of the possibility that the guidance may have 
been unintentionally rescinded because of human error or technical 
failure.
---------------------------------------------------------------------------

    \3\ See Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29, 43 
(1983) (courts ``consider whether the [agency's rescission] decision 
was based on a consideration of the relevant factors'') (citations 
and internal quotations omitted); F.C.C. v. Fox Television Stations, 
Inc., 556 U.S. 502, 515 (2009) (``[T]he agency must show that there 
are good reasons for the new policy.'').
---------------------------------------------------------------------------

    The GGP rule also does not address the situation in which guidance 
documents are in the repository, but a regulated entity cannot access 
or view them--for example, due to flaws in the repository search 
function. For such documents, individuals may incorrectly believe that 
documents are missing from the HHS repository, and therefore believe 
that guidance has been rescinded and/or no longer represents the 
Department's policy or interpretation. In that event, again, regulated 
entities would risk taking actions based on a misunderstanding of the 
Department's current interpretations and policies. Or, more likely, 
regulated entities may have the added burden of inquiring with the 
agency about whether the guidance is in the repository, either 
informally or by petition, which would consume time and resources for 
both the requestor and the Department.\4\ The Department is also 
concerned that this structure may

[[Page 58049]]

cause regulated entities to restructure their compliance processes and 
operations, which could be quite costly. With all these possible 
concerns in mind, the Department invites stakeholders to comment on 
their experience with the repository. Although we no longer think 
automatic rescission is appropriate, the Department intends to retain 
the repository and is interested in stakeholders' experience using it. 
Specifically, the Department is interested in knowing whether 
stakeholders have been able to easily find the guidance applicable to 
them in the repository and how the Department can improve its usability 
and utility.
---------------------------------------------------------------------------

    \4\ Several commenters noted that they have no trouble finding 
current guidance without the repository. One commenter pointed out 
Medicaid guidance can easily be accessed through the ``Federal 
Policy guidance'' tab on Medicaid.gov website. Another commenter 
suggested that guidance documents on topical web pages was more 
helpful than the repository, which was not indexed.
---------------------------------------------------------------------------

    As noted earlier in this section, the Department believes that 
there is value in an online guidance database, and currently plans to 
retain a guidance document repository. However, upon reconsideration, 
the Department does not see a need to establish this administrative 
tool by regulation. Particularly in light of the experience of the 
COVID-19 pandemic, the Department now believes that flexibility is 
preferable to rigid requirements. The Department's current 
understanding has also been reinforced upon observing the technical 
challenges associated with a centralized repository. The Department 
believes that the better approach would be to engage with the 
individual agencies to develop the most efficient and user-friendly 
repository system that has the flexibility to change with improving 
technology and experience, and not to be constrained by regulatory 
requirements. If the proposed repeal of the HHS GGP final rule is 
finalized, the Department currently intends for the repository at 
www.hhs.gov/guidance to remain active, but the additional requirements 
imposed by the GGP rule (e.g., that removal from the repository would 
affect rescission of a guidance) would be removed. We propose the 
automatic rescission requirement will have no effect on the status of 
guidance documents regardless of when they were issued. If the HHS GGP 
final rule is repealed as proposed, guidance documents will remain 
validly issued regardless of whether they were ever inadvertently not 
included in the repository. HHS will seek to ensure the repository is 
as complete and up to date as possible.
    Unnecessary Diversion of Resources. Other aspects of the HHS GGP 
final rule also raise concerns because they divert agency resources 
without providing adequate compensating benefit, or are simply 
unnecessary. Although the Department previously believed that the 
petition process would not unduly strain HHS resources and delay the 
issuance of new guidance documents, 85 FR 78783, we now have serious 
policy reservations about this allocation of resources. The Department 
has now determined that the petition process concerning the withdrawal 
or modification of guidance documents, established in Sec.  1.5--which 
requires written responses from the Department on a short timeframe 
regardless of the petition's subject matter or merits or of competing 
public health priorities--is unnecessary and burdensome. This process 
allows a petitioner to petition for hundreds of guidance documents to 
be rescinded at once or allows one or many petitioners to re-petition 
regarding a single guidance document multiple times. Further, many 
agencies have well-established petition processes that are already in 
use by stakeholders seeking changes to or rescission of existing 
guidance, and there are equally well-established processes for 
stakeholders wishing to challenge agency decisions (including those 
involving applicability of a guidance) that are unique to the agency 
and the communities with whom the agency works. These processes include 
citizen petitions related to FDA guidance and the appeals process at 42 
CFR part 498 for facilities that disagree with decisions involving 
application of guidance governing Medicare eligibility and 
participation. Further, many stakeholders are in regular communication 
with agencies and express their comments, suggestions, or concerns with 
guidance in their formal and informal discussions with agency 
employees. It is not necessary, in the Department's view, to require an 
expedited response to all guidance-related concerns, some of which may 
warrant extensive review and consideration.
    The GGP rule also contains generalized statements related to the 
role and effect of guidance that are not necessary and could cause 
confusion. For example, Sec.  1.3(a)(1) states, ``[u]nder 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.'' To the extent that provisions such as this one seek to 
capture a current understanding of principles established by the APA, 
the Department has reconsidered that effort and now sees little benefit 
in it. It is unnecessary because the APA governs agency conduct 
concerning guidance without the need for agency regulations.
    If HHS were to finalize this proposed rule to repeal the HHS GGP 
final rule, appropriate parameters and procedures for guidance 
documents issued by HHS agencies would remain in place. Repealing the 
HHS GGP final rule would not change the existing state of the law on 
the non-binding effect of guidance documents or whether they lack the 
force and effect of law. Nor would such repeal permit an agency to use 
guidance documents to establish or change policies where rulemaking is 
otherwise required, or to require outside parties to take or refrain 
from taking certain actions that are not addressed by statute or 
regulation. See generally Azar v. Allina Health Servs., 139 S. Ct. 1804 
(2019) (finding that Medicare-related guidance cannot create additional 
burdens beyond those included in statute or regulation). The Department 
would retain appropriate internal procedures for approval of the 
issuance of guidance documents and would continue to make guidance 
documents available to the public. Further, OIRA would continue to 
review guidance documents in appropriate circumstances, as it did 
before the issuance of E.O. 13891. Stakeholders could still petition 
the Department to take certain actions related to guidance documents 
under their general rights to communicate with and to seek redress from 
the Federal Government. In summary, the Department no longer believes 
that the provisions of the HHS GGP final rule are warranted.
2. Conflict With FDA Good Guidance Practices
    The HHS GGP final rule also presents implementation problems for 
FDA. If HHS were not already proposing to repeal the rule in its 
entirety, HHS would have proposed to amend 45 CFR part 1 to remove FDA 
from the scope of that regulation. Indeed, it is also possible that, if 
the exclusion of FDA from 45 CFR part 1 can proceed separately on a 
faster track, the Department may choose to finalize that part of the 
repeal in advance of finalizing other aspects of this rulemaking.
    As noted, FDA, unlike the other divisions of HHS, has long operated 
under a statutory provision concerning guidance and has its own GGP 
regulations, which address FDA's practices related to guidance 
documents, including practices and procedures for issuing, revising, 
and implementing guidance documents. FDA adopted its GGP regulations 
over 20 years ago at the conclusion of a public process that began in 
the 1990s. In May 1995, the Indiana Medical

[[Page 58050]]

Device Manufacturers Council submitted a citizen petition to FDA 
requesting, among other things, that FDA establish greater controls 
over the initiation, development, and issuance of guidance documents to 
ensure the appropriate level of meaningful public participation. In 
response to this petition, and after an opportunity for public comment, 
in February 1997, FDA published a guidance document on GGPs. 62 FR 8961 
(Feb. 27, 1997). On November 21, 1997, the President signed into law 
the Food and Drug Administration Modernization Act of 1997 (FDAMA) 
(Pub. L. 105-115). Section 405 of FDAMA added section 701(h) to the 
FD&C Act, which codified certain parts of the 1997 FDA GGP guidance 
document. In response to FDAMA, FDA issued a proposed rule on February 
14, 2000, 65 FR 7321, to amend its administrative regulations to codify 
its policies and procedures for developing, issuing, and using guidance 
documents, including those set forth in section 701(h) of the FD&C Act. 
FDA issued a final rule establishing the GGP regulation on September 
19, 2000. 65 FR 56468.
    FDA currently issues its guidance documents consistent with section 
701(h) of the FD&C Act (21 U.S.C. 371(h)) and 21 CFR 10.115, which 
include procedures for the following:
     Public participation in the development of guidance 
documents, including to propose topics for guidance, submit drafts of 
proposed guidance for consideration, comment on most guidance documents 
before implementation, and comment on revising or rescinding any 
guidance documents at any time after issuance;
     For most guidance documents, publication of a notice in 
the Federal Register announcing the guidance document's availability;
     Public availability of guidance documents, both on 
FDA.gov, and, upon request, in hard copy;
     Standard elements of guidance documents, including 
elements to make clear the non-binding effect of guidance documents, to 
identify the Center or Office issuing the guidance, and to identify the 
activities to which the guidance applies;
     Approval of guidance documents; and,
     An appeals process if FDA does not follow its GGP 
regulation or if an FDA employee treats a guidance document as binding.
    FDA also operates under longstanding regulations regarding citizen 
petitions. See 21 CFR 10.30, 10.31. For years, stakeholders have 
submitted petitions under FDA's regulations that suggest that the 
agency take certain actions on guidance documents, particularly to 
amend guidance.
    The Department is concerned that the HHS GGP final rule establishes 
standards and processes that overlap with but are distinct from those 
in section 701(h) of the FD&C Act, FDA's GGP regulation, and/or FDA's 
regulation governing citizen petitions. For example, section 701(h) of 
the FD&C Act and 45 CFR 1.3(b)(4) contain different standards for 
dispensing with prior public participation for certain guidance 
documents. Having two sets of regulations governing FDA guidance 
practices, as well as two sets of regulations governing citizen 
petitions related to FDA guidance documents, creates practical 
difficulties and confusion. For these reasons as well as the general 
concerns with the GGP rule discussed in this document, the Department 
no longer believes that this regulatory overlay on the FDA guidance 
processes adds value.
    In addition, the application of the HHS GGP final rule to FDA 
guidance presents problems that were not considered or addressed at the 
time the Department made the decision to extend the rule to apply to 
FDA. For guidance documents erroneously rescinded based on their 
absence from the repository, the Department believed that rescission 
could be remedied simply through issuing the guidance consistent with 
``the procedures in [the HHS] rule.'' 85 FR 78781. However, FDA has its 
own statutory mandate and regulations requiring promulgation of 
guidance through a notice and comment process in most cases. Therefore, 
if a guidance document is erroneously rescinded under Sec.  1.4(a)(2) 
of the HHS GGP final rule, FDA would need to consider how to 
repromulgate its guidance in a manner consistent not only with the HHS 
GGP final rule, but also with its own statute and regulations. 
Repealing the HHS GGP final rule--and in particular, removing FDA from 
the scope of 45 CFR part 1--is important to stabilize and clarify the 
regulatory regime for FDA guidance documents, including the process for 
submitting citizen petitions related to FDA guidance documents. As 
discussed in this section, the Department now believes that any 
procedures going beyond those set forth in FDA's current regulations--
such as those for significant guidance documents--are unwarranted for 
FDA guidance. In addition, it is inefficient and confusing for 
regulated entities as well as FDA staff to toggle back-and-forth 
between HHS and FDA GGP rules to try to figure out what the 
requirements are.\5\
---------------------------------------------------------------------------

    \5\ The FDA GGP rule is an example of an agency developing 
procedures uniquely suited to its mission and statutory authorities. 
Trying to impose processes that were tailored to FDA upon all other 
agencies within the Department, or trying to force FDA to conform to 
a process for the entire Department, would create additional burdens 
and confusion.
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B. Civil Enforcement Rule (45 CFR 1.1-1.2, 1.6-1.9)

    The Department is proposing to repeal the Civil Enforcement rule 
because the rule: (1) Creates unnecessary hurdles and roadblocks in 
agency actions, likely to the detriment of the public; (2) conflicts 
with and undermines current agency processes; and (3) diverts critical 
Department resources.
    Creates Unnecessary Hurdles. The processes and procedures set forth 
in the Civil Enforcement rule create unnecessary hurdles and roadblocks 
for agency actions, to the detriment of the public health and other 
national priorities. Section 1.9 requires the Department to follow 
certain steps before taking civil enforcement actions, including 
providing parties with an initial notice of the agency's legal and 
factual determinations, an opportunity to object or respond, and the 
Department's ``written response'' to the affected party's objections. 
The Department previously anticipated that existing HHS procedures 
already satisfied the requirements established in Sec.  1.9. 86 FR 
3012. Upon reconsideration, as a matter of policy, the Department now 
finds that the Civil Enforcement rule creates a rigid, burdensome, and 
resource-intensive path for Department staff, which is unnecessary when 
other tools in use, such as information negotiation, could be more 
efficient and effective.
    Section 1.7(a) prohibits the Department from applying ``standards 
or practices'' in a civil enforcement action that have not been 
``publicly stated.'' That new restriction on the Department's authority 
is inconsistent with settled case law,\6\ and it could interfere with 
the Department's ability to enforce new laws and address

[[Page 58051]]

emerging threats, particularly through the use of adjudicatory 
proceedings.
---------------------------------------------------------------------------

    \6\ See SEC v. Chenery Corp., 332 U.S. 194, 203 (1947) 
(``[P]roblems may arise in a case which the administrative agency 
could not reasonably foresee. . . . Hence, we refuse to say that the 
Commission, which had not previously been confronted with the 
problem of management trading during reorganization, was forbidden 
from utilizing this [adjudicatory] proceeding for announcing and 
applying a new standard of conduct''); Martin v. Occupational Safety 
& Health Rev. Comm'n, 499 U.S. 144, 154 (1991) (``Within traditional 
agencies . . . adjudication operates as an appropriate mechanism not 
only for factfinding, but also for the exercise of delegated 
lawmaking powers, including lawmaking by interpretation.'').
---------------------------------------------------------------------------

    Overall, through provisions such as these, the rule could impede 
and delay civil enforcement actions, as well as depress the overall 
number of actions, given finite Departmental resources. Slower and 
fewer enforcement actions could not only leave more bad actors in the 
market, but could embolden them, ultimately undermining the public 
interest.
    Although Sec.  1.9 includes an exception for actions involving ``a 
serious threat to health, safety, or similar emergency,'' 86 FR 3013, 
the discretionary exception does not address fraudulent actors who 
drain the Department's resources when allowed to remain in Departmental 
programs. For example, it is not in the public interest for an HHS 
agency such as CMS to take fewer enforcement actions against providers 
and suppliers who fraudulently bill patients and harm the Medicare 
trust funds. Delayed action against fraudulent billing would allow 
further diversion of taxpayer dollars and loss of program funding, 
forcing divisions to reprioritize program resources. Additionally, the 
exception does not alleviate the burden on the Department, because the 
process, including the Department's written response to the party's 
objections, must still be followed ``as soon as practicable.'' 86 FR 
3013. Finally, analyzing whether a particular action falls into the 
exceptions set forth in Sec.  1.9(c) would itself require an 
expenditure of time and resources that could delay actions needed to be 
taken on a time-sensitive basis.
    Conflict with Existing Processes. Although the Department 
previously concluded that the requirements set forth in the final rule 
would facilitate smoother operations, 86 FR 3013, upon reconsideration, 
the Department is now concerned that the requirements in Sec. Sec.  1.6 
through 1.9 may create conflict and cause confusion to Department staff 
and the public with respect to existing agency processes and 
regulations. The various agencies under the HHS umbrella each have 
procedural regulations, some of which have been specifically designed 
to govern a particular type of proceeding. See, e.g., 21 CFR part 17 
(procedures governing hearings concerning the imposition of civil money 
penalties by FDA); 42 CFR part 488 (CMS and State Agency survey, 
certification, and enforcement procedures for Medicare providers and 
suppliers); 42 CFR part 498 (Appeals procedures for determinations that 
affect participation in the Medicare Program); 45 CFR part 160, subpart 
E (Procedures governing hearings challenging the imposition of civil 
monetary penalties in HIPAA cases). The procedures required under the 
Civil Enforcement rule do not adequately account for these pre-
existing, agency-specific procedures, nor do they account for the 
differences between agencies within the Department. Instead, the Civil 
Enforcement rule dictates an overlay of new, and in some cases 
redundant, requirements. These requirements may conflict with or 
diverge from the existing procedures established to provide parties 
notice and an opportunity to be heard. This overlay creates confusion 
for both HHS agencies and regulated parties and could delay or prevent 
civil enforcement.\7\
---------------------------------------------------------------------------

    \7\ Further, we note that if the GGP rule is not repealed as 
part of this rulemaking, the limitations on use of guidance 
documents in 45 CFR 1.6(b), which were added as part of the Civil 
Enforcement rulemaking, may raise additional questions regarding the 
appropriate scope and use of guidance documents--especially in light 
of potentially conflicting directives in the HHS GGP final rule.
---------------------------------------------------------------------------

    The procedural regulations already established within HHS comply 
with principles of due notice, fairness, and transparency. Parties that 
are subject to civil administrative enforcement actions and 
adjudications under the existing procedures established prior to the 
Civil Enforcement rule are routinely provided with sufficient notice of 
the action, adequately informed of laws and regulations to which they 
are subject to, fully instructed on contesting or appealing agency 
determinations prior to actions of legal consequence, and protected 
from unfair surprise. The Civil Enforcement rule did not provide any 
evidence to the contrary. Thus, overall, the Department has not 
identified grounds to justify the expenditure of resources on 
compliance with the rule, particularly given that such expenditure 
would divert resources from other important Department activities, as 
explained in the next subsection.
    Diverts Resources. Further, the Civil Enforcement rule could 
require the expenditure of significant resources to respond to spurious 
challenges to valid enforcement actions and adjudications. The rule is 
likely to invite opportunistic litigation not only because parties will 
have new procedural grounds to object to agency actions, but also 
because many of the provisions in Sec.  1.9 are opaque and susceptible 
to multiple interpretations. The additional time and resources that 
would be needed to address and defend against such challenges would 
significantly impede the Department's ability to take enforcement 
actions and would divert resources from mission-critical activities.
    In summary, the Civil Enforcement rule deprives the Department and 
its agencies of necessary flexibility in determining when and how best 
to conduct civil administrative enforcement actions and adjudications 
based on particular facts and circumstances. The Civil Enforcement rule 
also unduly restricts the Department's ability to take timely action to 
enhance the health and well-being of all Americans.

C. Reliance Interests

    In issuing this proposed rule, the Department has considered 
reliance interests that may have accrued in connection with 45 CFR part 
1. As an initial matter, the Department doubts that any serious 
reliance interests have accrued. Both the HHS GGP and Civil Enforcement 
final rules became effective only a couple of weeks before the change 
in Administration and before the E.O.s on which they relied were 
revoked. They have been in place for only a few months, most of which 
time followed that revocation. It is unlikely that serious reliance has 
developed in that short amount of time. Cf. Clark-Cowlitz Joint 
Operating Agency v. FERC, 826 F.2d 1074, 1084 (D.C. Cir. 1987) (finding 
limited reliance interest where rule was in place for only six months, 
among other things). Under these circumstances, it is likely that 
regulated entities would have anticipated that the rules would be 
reconsidered and potentially rescinded, particularly after the 
revocation of E.O.s 13891 and 13892 on January 20, 2021. Indeed, other 
departments and agencies have already repealed rules issued pursuant to 
those E.O.s.\8\
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    \8\ As of May 28, 2021, over 10 other departments and agencies 
have repealed such rules. See Tennessee Valley Authority Final Rule, 
```Promoting the Rule of Law Through Improved Agency Guidance' 
Regulations; Rescission,'' 86 FR 28488 (May 27, 2021) (rescinding 
rule on guidance); Environmental Protection Agency Final Rule, ``EPA 
Guidance; Administrative Procedures for Issuance and Public 
Petitions; Rescission,'' 86 FR 26842 (May 18, 2021) (rescinding rule 
on guidance); National Endowment for the Humanities and National 
Foundation on the Arts and the Humanities Final Rule, ``Processes 
and Procedures for Issuing Guidance Documents,'' 86 FR 26184 (May 
13, 2021) (rescinding rule on guidance); U.S. Office of Government 
Ethics Final Rule, ``Removal of U.S. Office of Government Ethics 
Guidance Documents Regulations'' 86 FR 25801 (May 11, 2021) 
(rescinding rule on guidance); Railroad Retirement Board Final Rule, 
86 FR 22866 (Apr. 30, 2021) (rescinding rule on guidance); Social 
Security Administration Final Rule, ``Rescission of Rules on 
Improved Agency Guidance Documents'' 86 FR 20631 (Apr. 21, 2021) 
(rescinding regulations on guidance); Department of Interior Final 
Rule, ``Procedures for Issuing Guidance Documents,'' 86 FR 19786 
(Apr. 15, 2021) (rescinding regulations on issuing guidance); 
Council on Environmental Quality Final Rule, ``Guidance Document 
Procedures Rescission,'' 86 FR 19149 (Apr. 13, 2021) (rescinding 
regulations on issuing guidance); U.S. Agency for International 
Development (USAID) Final Rule, ``Procedures for the Review and 
Clearance of USAID's Guidance Documents; Rescission'' 86 FR 18444 
(Apr. 9, 2021) (rescinding regulations on issuing guidance); 
Department of Transportation Final Rule, ``Administrative 
Rulemaking, Guidance, and Enforcement Procedures,'' 86 FR 17292 
(Apr. 2, 2021) (removing regulations regarding issuing guidance and 
conducting enforcement actions, among other things); Pension Benefit 
Guaranty Corporation Final Rule, ``Rescission of Pension Benefit 
Guaranty Corporation Rule on Guidance,'' 86 FR 17066 (Apr. 1, 2021) 
(rescinding rule on issuing guidance); Department of Energy Notice 
of Proposed Rulemaking, ``Procedures for the Issuance of Guidance 
Documents,'' 86 FR 16114 (Mar. 26, 2021) (proposing to rescind final 
rule on issuing guidance); Department of Energy Final Rule, 
``Procedures for the Issuance of Guidance Documents,'' 86 FR 14807 
(Mar. 19, 2021) (further delaying effective date of final rule on 
issuing guidance in order to conduct rulemaking to withdraw the 
rule); Department of Labor Final Rule, ``Rescission of Department of 
Labor Rule on Guidance,'' 86 FR 7237 (Jan. 27, 2021) (rescinding 
rule on issuing guidance).

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[[Page 58052]]

    Moreover, particularly given the timing of the issuance of these 
rules, it is difficult to see how the procedures or principles set 
forth in these rules would translate to a stakeholder making concrete 
changes in public or business decisions or practices that would 
implicate serious reliance interests. As explained in this document, 
consistent with the largely procedural nature of the rules, the rules 
codify steps that the agency would take in certain circumstances, such 
as when issuing guidance or prior to civil administrative enforcement 
actions, but they do not on their own change the substantive 
requirements governing regulated entities or related property 
interests. Finally, the Department considers the policies reflected in 
this proposed rule to advance the public interest. To the extent that 
any serious reliance interests are at stake, the Department believes 
that the public interests in efficient issuance of guidance and 
adequate civil administrative enforcement actions outweigh any such 
individual reliance interests. However, we invite parties to use the 
comment period for this proposed rule to explain why they believe they 
would be adversely affected by this proposed policy change and explain 
how they would need to adjust their practices, as appropriate.

V. Required Regulatory Analyses

A. Executive Orders 12866 and 13563

    E.O. 12866, ``Regulatory Planning and Review,'' and E.O. 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.
    In both the HHS GGP proposed and final rules, OMB determined that 
the rulemaking was not an economically significant regulatory action 
under these E.O.s. 85 FR 51399; 85 FR 78784. OMB made a similar finding 
with respect to the Civil Enforcement rule. 86 FR 3013. The preambles 
to these rules maintained that the rules primarily described procedural 
changes that would require Department expenditures to implement. 
Although the preambles theorized that stakeholders might eventually 
benefit from greater transparencies and efficiencies from these 
procedural changes, the rules did not identify any benefits that were 
likely to be immediately realized. See 85 FR 78784; 86 FR 3013.
    In the current rulemaking, the Department is proposing to repeal 
two recent final rules, effective on January 6, 2021, and January 12, 
2021, which would remove all of 45 CFR part 1. If finalized, this 
rulemaking would restore the status quo that existed just prior to the 
January 2021 effective dates. The Department may then take further 
action as needed to undo any minimal actions taken since those 
effective dates to implement the rules' procedural directives. 
Consistent with the conclusions reached in the preambles of the HHS GGP 
final rule and Civil Enforcement rule, and for the additional reasons 
described in this section, OMB finds that this rulemaking is a 
significant regulatory action under E.O.s 12866 and 13453. The Office 
of Management and Budget (OMB) has reviewed this rule as consistent 
with E.O. 12866 and 13453.

B. Regulatory Flexibility Act

    The Department has examined the economic implications of this 
proposed rule as required by the Regulatory Flexibility Act (RFA), 5 
U.S.C. 601 et seq. The RFA requires an agency to describe the impact of 
a proposed rulemaking on small entities by providing an initial 
regulatory flexibility analysis, unless the agency determines that the 
proposed rule will not have a significant economic impact on a 
substantial number of small entities, provides a factual basis for this 
determination, and proposes to certify the statement. 5 U.S.C. 603(a) 
and 605(b). The Department considers a proposed or final rule to have a 
significant economic impact on a substantial number of small entities 
if it has at least a three percent impact on revenue of at least five 
percent of small entities. The Department anticipates that, if 
finalized, this rule would restore the status quo just prior to the 
respective January 6, 2021, and January 12, 2021, effective dates of 
the HHS GGP final rule and the Civil Enforcement rule, and undo 
changes, if any, to procedures followed by the Department during the 
interim period. This proposed rule would repeal two rules that the 
Department concluded, and the Secretary certified, would not result in 
a significant impact on a substantial number of small entities. 
Further, the Department believes that any effects associated with 
future regulatory actions, including any positive or negative impacts 
to small entities, should be attributable to those regulatory actions 
rather than to this proposed rule, if it is finalized as proposed. As a 
result, the Department has determined, and the Secretary certifies, 
that this proposed rule would not have a significant economic impact on 
the operations of a substantial number of small entities.

C. Executive Order 13132 (Federalism)

    E.O. 13132, ``Federalism,'' 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 
proposed rule would not impose such costs or have any Federalism 
implications.

D. Executive Order 13175 (Consultation and Coordination With Indian 
Tribal Governments)

    HHS has analyzed this proposed rule in accordance with the 
principles set forth in 13175. HHS has tentatively determined that the 
proposed rule does not contain policies that would have a substantial 
direct effect on one or more Indian Tribes, on the relationship between 
the Federal Government and Indian Tribes, or on the distribution of 
power and responsibilities between the Federal Government and Indian 
Tribes. In accordance with the Department's Tribal consultation policy, 
the Department solicits comments from tribal officials on any potential 
impact on Indian Tribes from this proposed action.

E. National Environmental Policy Act

    HHS had determined that this proposed rule would not have a 
significant impact on the environment.

F. Paperwork Reduction Act of 1995

    In accordance with the Paperwork Reduction Act of 1995 and its 
implementing regulations, 44 U.S.C. 3501-3521; 5 CFR part 1320, 
appendix

[[Page 58053]]

A.1, the Department has reviewed this proposed rule and has determined 
that it proposes no new collections of information.

List of Subjects in 45 CFR Part 1

    Government employees, Guidance, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, and under the authority 
of 5 U.S.C. 301, the Department of Health and Human Services proposes 
to amend 45 CFR, subtitle A, subchapter A, by removing part 1.

PART 1--[REMOVED AND RESERVED]

0
1. Remove and reserve part 1.

Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-22503 Filed 10-19-21; 8:45 am]
BILLING CODE 4150-26-P