New Directions in Regulatory Policy Give Health Policy Advocates a Glimmer of Hope

New Directions in Regulatory Policy Give Health Policy Advocates a Glimmer of Hope

On his first day in office, President Biden issued a series of Executive Orders and Memoranda that signaled a clear departure from the administrative and regulatory policies of the Trump Administration. This was welcome news to health policy advocates who hope that the Biden Administration can help reverse some of the damage done by four years of harmful and restrictive health policies.

First, President Biden’s Chief of Staff issued a regulatory freeze memorandum withdrawing all rules that had not yet been published in the Federal Register and suspending, for 60 days, any rules that had been published but not yet taken effect. Regulatory freeze memos have become standard practice with a change in administrations, dating back to the Reagan era. The memos allow newly appointed administration officials time to review any last minute regulations issued by the previous administration.

Second, President Biden signed an Executive Order revoking several of the Prior Administration’s Executive Orders on regulations and guidance. Additionally, Biden issued a memoradum on modernizing the regulatory process and instructing the Office of Management and Budget (OMB) to “provide concrete suggestions on how the regulatory review process can promote public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations.”

For four years, the Trump Administration pursued a deregulatory agenda, highlighted perhaps most famously by a 2017 “2 for 1” Executive Order that required federal agencies to arbitrarily rescind two existing rules for every new rule they planned to issue. Despite the Administration’s rhetoric about the overuse of guidance and regulations, officials at HHS used the administrative process in an attempt to implement wide-sweeping, harmful health policies, like Medicaid block grants and Medicaid work requirements (recently rescinded by the Biden Administration),that had failed in Congress.

Two rules issued in the waning days of the Trump Administration, the so-called “Good Guidance” (Guidance) rule and the SUNSET rule, reflected the Administration’s attempts to rein in the use of informal guidance and to force future administrations to review existing rules on an on a regular basis. The Guidance rule requires HHS to stamp informal guidance with a disclaimer that it is not legally binding and requires “significant guidance” to undergo formal notice and comment procedures.

Further, the rule requires the agency to create a searchable database for all agency guidance. Any existing guidance that is not included in the database would be automatically repealed. As we expressed in our comments on the proposed rule, it opens the door to an administration repealing guidance without notice or explanation, and creates a time-consuming and burdensome process to reinstate or implement new guidance.

The SUNSET rule requires HHS to review existing rules every ten years after they are finalized. Any rule that the agency does not have time to review would be automatically rescinded. The rule essentially imposes mandatory expiration dates on an estimated 18,000 duly promulgated regulations and imposes a tremendous administrative burden on HHS staff. It has the potential to create legal uncertainty and wreak havoc in HHS programs if important regulations slip through the cracks of the difficult and time-consuming review process.

The actions taken by President Biden on January 20 indicate both of these rules are unlikely to remain in effect long term. The HHS Guidance Rule was based on a Trump Executive Order instructing all federal agencies to implement similar policies. Biden’s January 20 Executive Order repealed both Trump’s Executive Order on Guidance and his 2 for 1 Executive Order. The SUNSET rule is currently subject to the regulatory freeze memo, though it will take effect unless the Biden Administration takes specific steps to delay its implementation. Both rules would hamstring the current Administration’s health reform efforts and are inconsistent with Biden’s memo on modernizing regulatory reform. It is quite likely that HHS will take action to repeal or reform both rules. More globally, the Day One message from the Biden Administration points to a regulatory strategy that prioritizes public need over technical specifications and health policies that are more flexible and responsive to the needs of low-income Americans and other marginalized populations.

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