January 13, 2021

Have you ever tried to clean out a clothes closet? Depending on the number of shoes and sweaters and other unwanted wear lining the shelves, it can be a daunting task. Similarly, governments will occasionally attempt to tidy up their burgeoning law codes or over-stuffed sets of regulations—often with mixed results. Decades ago, it was said that the State of Louisiana once had the largest constitution in America. In 1974, the legislature met to write a new constitution, in part, for the purpose of paring down the length of the document. According to USLegal, however, today’s Louisiana Constitution is once again longer than any other, with over 184,000 words (compared to the U.S. Constitution’s approximate 2,000 words).

To be sure, there have always been attempts to scale back the number of laws or regulations by believers in the “less-is-more” model of government, but these efforts have often gained only temporary success. A new attempt at streamlining regulations has just been undertaken by the federal government. It remains to be seen if it will lead to a long-term legacy of greater efficiency in the regulatory process.

Review It or Lose It

On Friday, January 8, the Department of Health and Human Services (HHS) issued a final rule, to be known as the Securing Updated and Necessary Statutory Evaluations Timely (SUNSET) rule. Essentially, the rule builds on the efforts of previous administrations—going all the way back to the Carter presidency—to review and improve the federal regulation process. The broad-stroke take on this latest government effort is that there will be a mandated decadal review of certain health-related regulations; and—here’s the kicker—if the government fails to review a particular regulation, it goes off the books.

The government published a press release that provided more specifics on the new rule, including this excerpt that speaks to the rule’s raison d’etre:

The [rule] requires the Department to assess its regulations every ten years to determine whether they are subject to review under the Regulatory Flexibility Act (RFA), which requires regular review of significant regulations. If a given regulation is subject to the RFA, the Department must review the regulation every ten years to determine whether the regulation is still needed and whether it is having appropriate impacts. Regulations will expire if the Department does not assess and, if required, review them in a timely manner.

The whole point of the SUNSET rule is to update, appropriately revise or eliminate outdated or duplicative rules. This is part of the current administration’s continuing focus on reducing regulations it sees as too restrictive on the private sector. Indeed, some would hold that such a measure is sorely needed, as one analysis found that 85 percent of HHS regulations created before 1990 have not been edited.

There are a few details to note concerning SUNSET:

Regulations promulgated by an HHS agency, such as the Centers for Medicare and Medicaid Services (CMS) or the Food and Drug Administration (FDA), that are more than ten years old need to be reviewed within five calendar years of the effective date of this final rule.
Certain regulations are exempt, such as the following:
Certain FDA device, food standard, and over-the-counter drug regulations
Regulations that are jointly issued with other agencies • Regulations that legally cannot be rescinded
Regulations issued with respect to a military or foreign affairs function or addressed solely to internal management or personnel matters
CMS’ annual Notice of Benefit and Payment Parameters update rules According to the American Hospital Association (AHA), HHS has approximately 18,000 existing regulations, and—despite the above exceptions—it would appear that most of these would fall under the authority of SUNSET.
Examining the Implications

HealthcareDive is reporting that HHS has almost 300 “broken” citation references in the Code of Federal Regulations, “meaning the regulations reference another that no longer exists.” So, there’s no doubt that some algorithm needs to be inserted into the system that allows for a more consistent and scheduled examination of potentially outdated provisions. Enter the SUNSET rule, which, again, states that, if a regulation isn’t reviewed within a certain timeframe, it will automatically expire. That leads us to a couple of questions.

First, what is the likelihood that government bureaucrats will manage to undertake a timely review of the approximate 18,000 HHS regulations? Well, that all depends on the reliability of notification systems, manpower, and individuals’ ability and diligence. Second, what will be the effect of one or more regulation being automatically deleted on government agencies and the healthcare industry at large? Conceivably, if certain individuals in government or industry were relying on a particular regulation that suddenly died due to a failure of HHS officials to review it according to the SUNSET schedule, and there were no other regulations in place on which these individuals could rely, chaos could ensue.

According to HealthcareDive, “Many trade associations commented [SUNSET] could create additional uncertainty in the already hyper-regulated space, though they approved of reviewing and nixing outdated rules.” The AHA has also weighed in on the new rule, stating:

While we appreciate that this process has the potential to alleviate some regulatory burden for our hospital and health system members, we have substantial concerns that it does not provide an adequate mechanism for obtaining public input on the substance of regulations being reviewed.

That being said, the final rule does, in fact, require HHS to publicize in the Federal Register each month what assessments are being conducted. The public will also be able to comment on regulations under review through a process set up by HHS. To learn more about SUNSET, you can go to the following HHS website, which additionally contains a set of questions and answers concerning the new rule: HHS Finalizes Unprecedented Regulatory Reform through Retrospective Review | HHS.gov. To reach us with any questions about our business solutions for hospitals, please contact us at info@miramedgs.com.