Withdrawing Rule on Securing Updated and Necessary Statutory Evaluations Timely

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

Withdrawing Rule on Securing Updated and Necessary Statutory Evaluations Timely

AGENCY:

Department of Health and Human Services.

ACTION:

Final rule; withdrawal.

SUMMARY:

The Department of Health and Human Services (HHS or Department) is issuing a final rule withdrawing a rule entitled “Securing Updated and Necessary Statutory Evaluations Timely” (SUNSET final rule), which published in the

Federal Register

of January 19, 2021. The SUNSET final rule was originally scheduled to take effect on March 22, 2021. However, after a lawsuit was filed on March 9, 2021, seeking to overturn the SUNSET final rule, HHS extended the effective date of the SUNSET final rule until September 22, 2022. HHS is now withdrawing the SUNSET final rule.

DATES:

As of July 26, 2022, the final rule published on January 19, 2021 (86 FR 5694), which was delayed on March 23, 2021 (86 FR 15404), and March 4, 2022 (87 FR 12399), is withdrawn.

ADDRESSES:

For access to the docket to read background documents or comments received, go to

https://www.regulations.gov

and insert the docket number found in brackets in the heading of this final rule into the “Search” box and follow the prompts.

FOR FURTHER INFORMATION CONTACT:

Daniel J. Barry, Acting General Counsel, 200 Independence Avenue SW, Washington, DC 20201; or by email at

SunsetRepeal@hhs.gov

; or by telephone at 1-877-696-6775.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary

A. Purpose of the Final Withdrawal Rule

B. Summary of Major Provisions

C. Legal Authority

D. Costs and Benefits

II. Table of Abbreviations/Commonly Used Acronyms in This Document

III. Background

A. History of the SUNSET Rulemaking

B. The Department's Review

IV. Legal Authority

V. Analysis of and Responses to Public Comments on the Withdrawal NPRM

A. Comments on Implementation Burdens on the Department and Stakeholders

B. Comments on Potential Harms From the Possible and Actual Expiration of Regulations

C. Comments on the Regulatory Flexibility Act and Retrospective Review

D. Other Legal Comments

E. Comments on Vague and Confusing Provisions

VI. Final Regulatory Impact Analysis

A. Introduction, Summary, and Background

B. Market Failure or Social Purpose Requiring Federal Regulatory Action

C. Purpose of the Final Withdrawal Rule

D. Baseline Conditions

E. Benefits of the Final Withdrawal Rule

F. Costs of the Final Withdrawal Rule

G. Analysis of Regulatory Alternatives to the Final Withdrawal Rule

H. Final Small Entity Analysis

VII. Federalism

VIII. Consultation and Coordination With Indian Tribal Governments

IX. Analysis of Environmental Impact

X. Paperwork Reduction Act

XI. References

I. Executive Summary

A. Purpose of the Final Withdrawal Rule

HHS issued the SUNSET final rule on January 19, 2021. 86 FR 5694. The SUNSET final rule provides, among other things, that all regulations, subject to certain exceptions, issued by the Secretary of the Department of Health and Human Services (Secretary) or his delegates or sub-delegates 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.

1

The SUNSET final rule was scheduled to take effect on March 22, 2021. However, after a lawsuit seeking to overturn the SUNSET final rule was filed on March 9, 2021, HHS issued an Administrative Delay of Effective Date, effective as of March 19, 2021, which postponed the effective date of the SUNSET final rule, pending judicial review, until March 22, 2022 (Administrative Delay). 86 FR 15404 (Mar. 23, 2021). HHS subsequently extended the effective date of the SUNSET final rule until September 22, 2022. 87 FR 12399 (Mar. 4, 2022).

1

The terms “Section,” “Assess,” and “Review” were capitalized in the preamble to the SUNSET final rule where those terms have the definitions ascribed to them in the text of that final rule. For ease of readability, these terms are not capitalized in the following discussion of this withdrawal final rule unless directly quoting or paraphrasing the SUNSET final rule.

The Department undertook to reexamine the SUNSET final rule in light of the allegations in the lawsuit, the many substantive comments submitted on the SUNSET proposed rule, and the different policy views held by the Biden-Harris Administration as compared to the previous administration which issued the SUNSET final rule. That review considered the processes followed in issuing the SUNSET final rule, its policy goals and objectives, the projected effects and analysis of impacts in its implementation, and the legal evaluation of and support for its provisions, including whether the rule is consistent with HHS statutory obligations and its mission to promote and protect the public health. Based on that reevaluation, HHS published a notice of proposed rulemaking to withdraw or repeal the SUNSET final rule (Withdrawal NPRM). 86 FR 59906 (Oct. 29, 2021).

HHS has reviewed the comments on the Withdrawal NPRM and now issues this final rule to withdraw the SUNSET final rule in its entirety.

B. Summary of Major Provisions

We are withdrawing the SUNSET final rule in its entirety.

C. Legal Authority

The primary statutory authorities supporting this rulemaking are the general rulemaking authorities for the various substantive areas under the Department's umbrella, as well as a general authorization for agencies to issue regulations regarding the administrative processes to be followed by that agency. These provisions include: 21 U.S.C. 371(a); 42 U.S.C. 216; 42 U.S.C. 1302; 42 U.S.C. 1395hh; 42 U.S.C. 2003; and 5 U.S.C. 301.

D. Costs and Benefits

This regulatory action will reduce the time spent by the Department performing retrospective assessments and reviews of its regulations that would have been required by the SUNSET final rule, and time spent by regulated entities and other stakeholders, including the general public, small and large businesses, non-governmental organizations, Tribes and state and local governments, on comments related to these assessments and reviews. The impact of the withdrawal is analyzed in the final Regulatory Impact Analysis (RIA) for this final rule.

See

Section VI below. In that section, we monetize the likely reductions in time spent by the Department and the general public as cost savings. Our primary estimate of these cost savings in 2020 dollars, annualized over 10 years, using a 3% discount rate, totals $69.9 million. Using a 7% discount rate, we estimate $75.5 million in annualized cost savings. Table 1 in Section VI reports these primary estimates alongside a range of estimates that capture uncertainty in the amount of time it would have taken the Department to perform each regulatory assessment and review, and uncertainty in the amount of time the public would have spent on comments.

II. Table of Abbreviations/Commonly Used Acronyms in This Document

As used in this preamble, the following terms and abbreviations have the meanings noted below.

Term

Meaning

ACA

Affordable Care Act.

ACF

Administration for Children and Families.

AI/ANs

American Indian and Alaska Native people.

AI

Artificial intelligence.

APA

Administrative Procedure Act.

CDC

Centers for Disease Control and Prevention.

CFR

Code of Federal Regulations.

CHIP

Children's Health Insurance Program.

CMS

Centers for Medicare & Medicaid Services.

COVID-19

Coronavirus Disease 2019.

E.O.

Executive Order.

FD&C Act

Federal Food, Drug, and Cosmetic Act.

FDA

Food and Drug Administration.

FSMA

FDA Food Safety Modernization Act.

HHS or Department

U.S. Department of Health and Human Services.

IHS

Indian Health Service.

OCR

Office for Civil Rights.

OIRA

Office of Information and Regulatory Affairs.

PDV

Present Daily Value.

PHS Act

Public Health Service Act.

RFA

Regulatory Flexibility Act.

RIA

Regulatory Impact Analysis.

SAMHSA

Substance Abuse and Mental Health Services Administration.

SBA

Small Business Administration.

SEISNOSE

Significant Economic Impact Upon a Substantial Number of Small Entities.

SECG

Small Entity Compliance Guide.

SSA

Social Security Act.

SUNSET

Securing Updated and Necessary Statutory Evaluations Timely.

Unified Agenda

Unified Agenda of Regulatory and Deregulatory Actions.

III. Background

The SUNSET final rule, if implemented, would have significantly altered the operations of HHS with considerable negative repercussions for a diverse array of stakeholders. We now conclude that these significant repercussions were not adequately considered in issuing the SUNSET final rule in part because the process to promulgate the rule was extremely unusual, if not unprecedented. We note a few of the key considerations here.

The SUNSET final rule is expansive in scope and impact, faced considerable opposition from stakeholders (and very little support), and lacked a public health or welfare rationale for expediting rulemaking. In contrast to the Department's historical approach to rulemaking in these circumstances, HHS completed the rulemaking—from the publication of the proposal to publication of the final rule—in less than three months. In issuing the Withdrawal NPRM, we explained that, given the lack of a public health or welfare reason to expedite the rulemaking and other procedural shortcomings, we were reconsidering the commenters' significant objections to the SUNSET proposed rule. As summarized and discussed in the Withdrawal NPRM, we found that those comments raised compelling concerns that the SUNSET final rule would harm the public health and welfare, but were given insufficient weight in issuing the SUNSET final rule. Many of those same concerns have been further confirmed in the comments on the Withdrawal NPRM.

We also conducted a reanalysis of the regulatory impact of the SUNSET final rule, and found that the rule rested on flawed assumptions and analysis.

2

We now conclude that the SUNSET final rule likely underestimated to a significant degree the resources needed for the required undertaking. In particular, because the implementation of the SUNSET final rule would have required a significant expenditure of

resources, the Department would have been forced to make resource allocation decisions that would have impeded the Department's routine operations and hampered its ability to carry out other key priorities and goals.

2

The initial draft of the RIA for the SUNSET final rule was prepared by an outside economist.

See

86 FR 5737 n. 210. As far as the Department is currently aware, no Department economist participated in considering, drafting, or revising the economic evaluation of the SUNSET proposed or final rule. These deviations from usual practice in developing the original SUNSET rule may help explain why our current RIA differs so greatly from the previous RIA.

We also note that the Department, in developing the original SUNSET rule, did not follow other routine internal review procedures, such as distributing the draft proposed and final rules to the relevant HHS agencies to solicit their review, comments, and concurrences. These irregularities may have also contributed to the flawed execution and analysis in the original SUNSET rule.

We have also reconsidered the impact of the expiration provision in the SUNSET final rule and, upon further examination of the comments and the relevant legal standards, we have determined that the provision is unsound and in our view unlawful. The expiration provision was a key element of the SUNSET final rule (as its name suggests); however, the final rule erred in misjudging the likelihood that HHS regulations would expire if the SUNSET final rule were to go into effect and be implemented. As a result, the final rule failed to examine the instability, uncertainty, and confusion that could be generated by automatically expiring regulations. Further, we now believe that amending thousands of regulations to schedule their expiration based on the Department's purported failure to conduct a small-entity analysis, without any corresponding notice regarding or evaluation of the public health importance of the individual regulations or the public's reliance on them, violates the Administrative Procedure Act (APA) and is inconsistent with the purpose and intent of the Regulatory Flexibility Act (RFA). The policy ramifications and legal defects of the expiration provision call the entire rulemaking into question.

In addition to our reconsideration of the expiration provision, we have reconsidered more broadly the public comments, the stated legal bases for the rule, and its RIA, including a consideration of the impacts that are not quantified or monetized. We have determined that the SUNSET final rule prioritized regulatory review over other Department operations to a degree that would negatively impact many stakeholders and the general public in a variety of ways. We no longer agree with our previous decision-making in promulgating the SUNSET final rule, because that decision-making was predicated on: (1) An inaccurate assessment of the effects of this rule, as indicated in the comments on both the SUNSET proposed rule and Withdrawal NPRM, and as discussed in the current RIA; (2) errors of law; and (3) a different set of policy priorities. We therefore have decided to withdraw the SUNSET final rule in its entirety.

A. History of the SUNSET Rulemaking

1. Proposed Rule, Comment Period, and Final Rule

On November 4, 2020, HHS published a notice of proposed rulemaking entitled “Securing Updated and Necessary Statutory Evaluations Timely” (SUNSET proposed rule). 85 FR 70096. Under the proposed rule, 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 SUNSET 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 automatically expire.

The SUNSET 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 SUNSET 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 a Department-managed website, with an opportunity for public comment. The SUNSET proposed rule provided that comments to the proposed rule had to be submitted by December 4, 2020, except for comments on the portion of the rule amending 42 Code of Federal Regulations (CFR) parts 400-429 and parts 475-499 (Medicare program regulations), which were to be submitted by January 4, 2021.

On November 16, 2020, HHS announced a public hearing, scheduled for November 23, 2020, to receive information and views on the proposed rule (Public Hearing). 85 FR 73007. All of the commenters, which included industry/trade organizations, medical organizations, and public interest organizations, criticized the proposed rule in its substance, the rulemaking process, or both.

See

Transcript, Public Hearing on the Securing Updated and Necessary Statutory Evaluations Timely Notice of Proposed Rulemaking (Nov. 23, 2020) (available at

https://www.regulations.gov/document/HHS-OS-2020-0012-0501

) (Public Hearing Transcript).

In addition to the oral comments, a wide range of stakeholders submitted over 500 comments on the proposed rule. Almost all of the comments opposed the proposal. Comments opposing the rule were submitted by, for example, health care and medical organizations; Federally Qualified Health Centers and advocates for beneficiaries of Federal health care programs; State attorneys general and other state government representatives; Tribal governments and Tribal organizations; large industry associations and trade associations; consumer and public interest groups; and interested individuals. Only a handful of commenters supported the SUNSET proposed rule, and two of those comments were submitted by an individual who, under an agreement with HHS, also provided a draft RIA for the SUNSET final rule.

See

86 FR 5737 n.210. Other commenters supporting the rule included independent business advocacy organizations and a nonprofit legal organization.

On December 18, 2020, the Office of Information and Regulatory Affairs (OIRA) in the White House Office of Management and Budget (OMB) received the SUNSET final rule for review and clearance and posted on the OIRA dashboard for E.O. 12866 regulatory review (Ref. 1). This preceded the January 4, 2021, conclusion of the comment period for the parts of the proposed rule relating to 42 CFR parts 400-429 and parts 475-499.

HHS issued the SUNSET final rule on January 19, 2021. 86 FR 5694. The final rule provided that all regulations issued by the Secretary or their delegates or sub-delegates in titles 21, 42, and 45 of the CFR, subject to certain exceptions, 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 contained the same basic expiration framework as the proposed rule, but extended the timeframe for assessment and any applicable review of most existing regulations from two calendar years to five calendar years. The final rule also provided for a one-time “continuation” of a regulation subject to expiration if the Secretary makes a written determination that the

public interest requires continuation. The continuation period, stated in the determination, is not to exceed one year. In addition, the final rule contained exemptions for a small set of HHS regulations applicable to the Food and Drug Administration (FDA), the Centers for Disease Control and Prevention (CDC), and the Centers for Medicare & Medicaid Services (CMS). The final rule maintained the timeframe for amendment or rescission of regulations, and included a new

Federal Register

publication requirement in addition to the publication requirements proposed in the SUNSET proposed rule.

2. Litigation and Delay of Effective Date

On March 9, 2021, the County of Santa Clara and several other plaintiffs sued the Department seeking to overturn the SUNSET final rule under the APA. Complaint,

County of Santa Clara

v.

HHS

, Case No. 5:21-cv-01655-BLF (N.D. Cal. Mar. 9, 2021) (

Santa Clara

) (Ref. 2).

On March 18, 2021, the Acting Secretary of HHS signed, pursuant to 5 U.S.C. 705 of the APA, the Administrative Delay, which extended the effective date of the SUNSET final rule until March 22, 2022. 86 FR 15404. On March 3, 2022, the Secretary further extended the effective date of the SUNSET final rule until September 22, 2022. 87 FR 12399 (Mar. 4, 2022). At the parties' joint request, the

Santa Clara

litigation has thus far been stayed.

3. The Withdrawal NPRM

HHS published the Withdrawal NPRM on October 29, 2021, in which it proposed to withdraw or repeal the SUNSET final rule in its entirety. 86 FR 59906. In the Withdrawal NPRM, the Department explained that—in issuing the SUNSET final rule—it should have engaged in a more robust consideration of the comments, and should have given greater weight to the potential harms to stakeholders and the public health. Therefore, before issuing the Withdrawal NPRM, the Department reexamined the SUNSET final rule in light of the allegations in the

Santa Clara

complaint, the many substantive comments submitted to the SUNSET proposed rule docket and raised at the Public Hearing, and the changed policy views in the current Administration. That review considered the processes followed in issuing the SUNSET final rule, its policy goals and objectives, the projected effects and analysis of impacts in its implementation, and the legal evaluation of and support for its provisions, including whether the rule is consistent with HHS statutory obligations and its mission to promote and protect the public health.

The comment period on the Withdrawal NPRM closed on December 28, 2021, and HHS received approximately 80 comments. A substantial majority of comments from a wide range of stakeholders supported the repeal or withdrawal of the SUNSET final rule. These commenters included health care and medical organizations; Federally Qualified Health Centers and advocates for beneficiaries of Federal health care programs; State attorneys general and other state and local government representatives; Tribal governments and Tribal organizations; large industry associations and trade associations; insurance plans and organizations; and consumer and public interest groups. Most of the comments that supported retention of the SUNSET final rule and opposed its withdrawal came from policy advocacy groups, including one business association and one submission from the individual who, as previously noted, provided a draft RIA for the SUNSET final rule.

See

86 FR 5737 n.210. One comment that supported retention of the original rule was submitted by a group of state legislators led by a former HHS official who presented the overview of the SUNSET proposed rule at the Public Hearing, and another comment was submitted by a different HHS official from the previous administration. There were also several identical anonymous comments that supported the original rule and opposed its repeal or withdrawal.

B. The Department's Review

As described above, before issuing the Withdrawal NPRM, the Department reexamined the SUNSET final rule in light of the allegations in the

Santa Clara

complaint, the many comments submitted to the SUNSET proposed rule docket and raised at the Public Hearing, and changed policy views in the current Administration. This review considered the processes followed in issuing the rule, its policy goals and objectives, the projected effects and analysis of impacts in its implementation, and the legal evaluation of and support for its provisions, including whether the rule is consistent with HHS statutory obligations and its mission to promote and protect the public health. It should be noted at the outset that HHS recognizes the importance of retrospective review, already conducts retrospective reviews, and intends to continue to consider how to improve these existing processes.

See

Section V.C.2. The purpose of this review, however, was to reconsider whether the new requirements imposed in the SUNSET final rule would achieve the goals of retrospective review in a manner that best serves the Department's public health and welfare mission and that is consistent with applicable law.

We have now carefully considered the comments submitted on the Withdrawal NPRM. As described further below, our consideration of the comments has confirmed our tentative conclusions described in the Withdrawal NPRM and our decision to withdraw the SUNSET final rule. In this section, we summarize the key considerations, addressed in greater detail throughout the preamble, that have led us to conclude, as proposed in the Withdrawal NPRM, that the SUNSET final rule should be withdrawn in its entirety. Many of these considerations, including the burdens of implementing the rule, the harms of expiration, and the various legal infirmities, each provide independent and sufficient reasons for this withdrawal.

First, to be consistent with the Department's usual practices when engaging in rulemaking, the Department should have engaged in a more thorough consideration of the comments, and should have given greater weight to the potential harms to stakeholders and the public health. We have found that there were several procedural shortcuts taken in issuing the SUNSET final rule which may have impeded full consideration of the commenters' significant objections to the proposal as well as the care and meticulousness devoted to the final product. The SUNSET final rule was issued on a timeline of less than three months, which is unusually expedited for a rule of this significance, particularly given the potential impacts not just on small businesses but also the general public, larger businesses, Tribes, States, non-governmental organizations, and other regulated entities and stakeholders across a wide range of industrial sectors. The SUNSET rule was also remarkably expansive in scope, requiring review and possibly regulatory or deregulatory activity across a variety of distinct substantive statutes within the jurisdiction of several operating divisions (

e.g.,

CMS, FDA, CDC, Substance Abuse and Mental Health Services Administration (SAMHSA), the Office for Civil Rights (OCR), and the Administration for Children and Families (ACF)). However, it appears that the comments were not adequately considered (as evidenced by the summary mention in the preamble to the SUNSET final rule, as discussed further elsewhere in this preamble), and, contrary to policy, the Department

did not consult with tribal governments.

3

3

See

E.O. 13175, “Consultation and Coordination With Indian Tribal Governments,” 65 FR 67249 (Nov. 6, 2000).

Second, the Department should have more thoroughly examined the factual basis of the SUNSET final rule before issuing it. Our thinking is informed by a reevaluation of the factual premises and conclusions in the SUNSET final rule that are central to the analysis of the rule's implications and effects. In particular, based on a reanalysis of the regulatory impact of the rule, we have now concluded that the rule rested on a flawed understanding of the resources required for implementing the SUNSET final rule, which implicates the likelihood that HHS regulations would have expired, and which would have required the Department to make resource allocation decisions which could have impeded the Department's ability to carry out other key priorities.

In particular, the resources required to comply with the assessment and review requirements would be substantial. For each regulation covered by the SUNSET final rule, HHS agencies would need to: announce on a Department-managed website and in the

Federal Register

the commencement of an assessment or review; open and publicize public dockets for each assessment or review that the Department conducts; collect data to conduct the relevant evaluation (which may require time for additional public notice and comment, and OMB review and approval, under the Paperwork Reduction Act, 44 U.S.C. 3501

et seq.,

in addition to the time needed for data collection and analysis); engage subject matter experts and others to complete an assessment (and possibly a review); consult with state and local jurisdictions and Tribes, as appropriate; consider any comments to the public docket related to the evaluation; participate in interagency review, as appropriate; and publish the results of this process in the

Federal Register

, “including the full underlying analyses and data used to support the results.” 86 FR 5712. If the Department could not complete this extensive process within the final rule's timeframes, the regulations would then automatically expire. The original RIA for the SUNSET final rule had erroneously assumed, for example, that an assessment—which requires each of the steps previously discussed—would take between 3 and 10 hours. We have now revised that estimate to between 40 and 100 hours.

Beyond assessments and reviews, the SUNSET final rule would demand other significant resources, including the resources required to implement the overall framework, such as determining which regulations are exempt, and to amend or repeal regulations within a two-year time period (unless an extension is granted). These proceedings to amend or rescind the regulations would require an additional investment of HHS agencies' resources and public input. In addition, after those processes, the Department would likely then need to revise guidance documents and/or forms associated with both expiring regulations and regulations still in effect. Overall, we have determined that the SUNSET final rule miscalculated the extent of the resources needed for this undertaking and likely underestimated the costs of complying with the rule at least by a factor of four.

This reanalysis shows the SUNSET final rule, if implemented, would harm the public health and welfare and diminish the Department's ability to protect and advance the public health and welfare. The diversion of resources to implement the SUNSET final rule processes, the potential for automatic expiration of rules, and the actual expiration of regulations could undermine the operation of existing programs and otherwise harm the public health in numerous ways, discussed in greater detail below. For example, the resulting regulatory uncertainty could have several negative repercussions for stakeholders, by interfering with planning, contracting, and product development. The actual expiration of regulations could lead to confusion among stakeholders and undermine predictability and confidence in many sectors regulated by the Department.

Third, upon review, HHS has determined that the SUNSET final rule is contrary to several policy goals of the current Administration. The SUNSET final rule cited for support an Executive order (E.O.) entitled “Reducing Regulation and Controlling Regulatory Costs” (E.O. 13771), which placed limits on agencies' ability to issue new regulations. 86 FR 5696 (citing 82 FR 9339 (Jan. 30, 2017)). President Biden, on his first day in office, issued an E.O. entitled “Revocation of Certain Executive Orders Concerning Federal Regulation,” which revoked E.O. 13771.

4

86 FR 7049 (Jan. 25, 2021) (E.O. 13992). As stated in E.O. 13992, the current Administration's policy is to equip executive departments and agencies with flexibility to use available tools such as robust regulatory action to confront the urgent challenges facing the Nation, including the coronavirus disease 2019 (COVID-19) pandemic, economic recovery, racial justice, and climate change. Accordingly, E.O. 13992 revoked “harmful policies and directives that threaten to frustrate the Federal Government's ability to confront these problems and empowers agencies to use appropriate regulatory tools to achieve these goals.”

Id.

4

The SUNSET final rule also cited “Regulatory Relief To Support Economic Recovery,” (85 FR 31353, May 22, 2020) (E.O. 13924 of May 19, 2020), which was revoked in E.O. 14018. 86 FR 11855 (Feb. 24, 2021).

The Biden-Harris Administration has further committed to using available tools of Federal administrative agencies to, among other things: 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; make respect for Tribal sovereignty, self-governance, and regular, meaningful, and robust consultation with Tribal Nations cornerstones of Federal policy pertaining to American Indian and Alaska Native people (AI/ANs); and protect and strengthen Medicaid and the Affordable Care Act (ACA) and make high-quality healthcare accessible and affordable for every American.

5

5

See

“Advancing Racial Equity and Support for Underserved Communities Through the Federal Government,” 86 FR 7009 (Jan. 25, 2021) (E.O. 13985 of Jan. 20, 2021); “Tribal Consultation and Strengthening Nation-to-Nation Relationships,” 86 FR 7491 (Jan. 29, 2021) (Memorandum of Jan. 26, 2021); “Strengthening Medicaid and the Affordable Care Act,” 86 FR 7793 (Feb. 2, 2021) (E.O. 14009 of Jan. 28, 2021); “Continuing to Strengthen Americans' Access to Affordable, Quality Health Coverage,” 87 FR 20689 (April 8, 2022) (E.O. 14070 of April 5, 2022).

If implemented, the SUNSET final rule would negatively impact diverse groups of stakeholders, including historically underserved, marginalized, and adversely affected communities, and undermine the Department's public health mission. For example, as discussed in more detail in Section V.A of this preamble, numerous commenters expressed concern about the anticipated impacts on various populations including children, the elderly, the disabled, those living in poverty, and communities marginalized by racism and prejudice, who could lose eligibility for programs and services if the regulations underpinning the eligibility requirements were to expire. Public commenters, including Tribes and tribal representatives, assert that the SUNSET final rule would threaten the regulatory underpinnings of the Indian health system, completely disrupt the ability of that system's mission to provide care to tribal communities, undermine the delivery of HHS public health and

social service programs for tribal members, and generate a level of uncertainty that is the antithesis of the goals of the HHS Tribal Consultation Policy.

6

HHS now acknowledges that the SUNSET final rule does not provide for advance notice of regulations that might automatically expire, which we believe conflicts with the Department's policy to engage in meaningful consultation with Tribal Nations. We further note, however, that attempting to address the lack of adequate notice of expiring regulations would not resolve more fundamental problems with the SUNSET framework for tribal and other stakeholders.

6

U.S. Department of Health and Human Services, HHS Tribal Consultation Policy (Dec. 12, 2010) (available at

https://www.hhs.gov/about/agencies/iea/tribal-affairs/consultation/index.html

).

Fourth, the Department should have more carefully considered the legal basis for the SUNSET final rule, including the expiration provision, which is a cornerstone of the rule. Commenters on the SUNSET proposed rule had asserted that the Department did not adequately consider the legal questions raised by the automatic expiration provisions, which would potentially eliminate regulations without due notice and consideration of the implications of that specific expiration. After further review, we have concluded that the legal reasoning offered in support of the expiration provision did not address foundational Supreme Court case law requiring agencies to consider, among other things, the factual bases for a regulation before eliminating that regulation.

7

7

The Department is not questioning the legality of the well-considered establishment of sunsetting provisions in other, more-targeted circumstances, such as the inclusion of a sunset provision in a single rule. In such a case, the agency would have provided notice and the opportunity for comment on, and given due consideration of, the potential sunset of that particular regulation. In contrast, the SUNSET final rule was unusually sweeping and superficial, in that it established automatic expiration for a large swath of diverse regulations without due consideration of the substance of each regulation and the impact of the added sunset provision on affected entities under that regulation. See Section V.D.1 (discussing,

e.g., Dep't of Homeland Sec.

v.

Regents of the Univ. of Cal.,

140 S. Ct. 1891, 1913 (2020)).

The SUNSET final rule dismissed these concerns regarding the public health and legal repercussions of the SUNSET final rule in part by assuming that regulations would not expire.

See, e.g.,

86 FR 5710 (“HHS does not intend to allow a regulation to simply expire”);

id.

at 5712 (“the Department is committed to dedicating adequate resources to timely Assess and Review its regulations”);

id.

at 5714 (“the Department intends to timely complete the necessary Assessments and Reviews and has built in safeguards to mitigate the risk of inadvertent expiration”). The Department failed to consider, however, that public health and legal problems with the SUNSET final rule exist even if no expiration occurs. For example, the resources diverted from other key programs would still undermine the Department's public health mission and even the

possibility

of expiration would create serious instability. The SUNSET final rule did not provide an adequate justification for, or even acknowledge, either of these likely consequences.

Moreover, we no longer agree with the Department's previous assumption that no regulations would expire. Preventing the automatic expiration of regulations would require prioritizing retrospective review above many other Department programs and missions. With its finite set of resources, the Department would be faced with a quandary of how best to triage the needs of its existing programs (as well as new public health priorities) and the new regulatory review process under the SUNSET final rule. On the one hand, given the large scale of resources necessary to conduct the required reviews, compliance with these new review requirements would lead to the diversion of resources from existing and new priority programs to the detriment of the other programs. This diversion of resources would constrain HHS's capabilities to carry out mission-critical objectives such as protecting the health of Americans, strengthening their economic and social well-being, and fostering sound, sustained advances in medical innovation and health sciences. On the other hand, the automatic expiration of regulations could also undermine mission-critical objectives. Based on our reconsideration and expert judgment, we no longer consider prioritizing resources to avoid expiration to be in the best interests of the public health and welfare. Therefore, we believe that this assumption—that no regulations would expire—was not well founded. The Department's previous reliance on this unsupported assumption, together with the miscalculation regarding the resources necessary to comply with the rule, are in themselves detrimental to the viability of the SUNSET final rule.

Upon review, we now conclude that the burdens imposed by the SUNSET final rule could undermine the Department's ability to fulfill its public health and human services missions, promote national priorities, and confront the challenges facing the nation—contrary to its statutory mandates and the policies expressed in EOs 13992, 13985, 14009, and 14070. As further described below,

see

Section V.C, the Department already has a longstanding retrospective review plan in place, and each year publishes in the

Federal Register

a list of the rules that it is reviewing, has reviewed, or intends to review under section 610 of the RFA. And although the Department is committed to exploring additional ways to improve its processes for conducting retrospective reviews under the RFA and identify and retire obsolete rules, the approach in the SUNSET final rule imposes requirements that are far more onerous than what is needed to meet those objectives and that would undermine essential Department priorities. In essence, implementation of the SUNSET final rule would likely have led to a sharply diminished ability of the Department to provide Federal leadership in public health and human services. On full consideration, the Department believes that implementation of the SUNSET final rule fundamentally conflicts with our policies and ability to achieve our statutory missions.

IV. Legal Authority

The primary statutory authorities supporting this final rule are the general rulemaking authorities for the various substantive areas under the Department's umbrella, as well as a general provision authorizing agencies to issue regulations regarding the administrative processes to be followed by that agency. These include:

• Section 701(a) of the Federal Food, Drug, and Cosmetic Act (FD&C Act), 21 U.S.C. 371(a), which authorizes the Secretary to “promulgate regulations for the efficient enforcement of [the FD&C Act], except as otherwise provided in this section;”

• Section 215 of the Public Health Service Act (PHS Act), 42 U.S.C. 216, which provides that “The Surgeon General, with the approval of the Secretary, unless specifically otherwise provided, shall promulgate all other regulations necessary to the administration of the Service[];”

• Section 1102 of the Social Security Act (SSA), 42 U.S.C. 1302, which provides that the Secretary “shall make and publish such rules and regulations, not inconsistent with this Act, as may be necessary to the efficient administration of the functions with which [they are] charged under this Act;”

• Section 1871 of the SSA, 42 U.S.C. 1395hh, which provides that “the Secretary shall prescribe such regulations as may be necessary to carry out the administration of the insurance programs under this title;”

• 42 U.S.C. 2003, which provides that “the Secretary of Health and Human Services is also authorized to make such other regulations as [they] deem desirable to carry out the provisions of this subchapter [transferring to the Indian Health Service (IHS) the authority to provide health care services to AI/ANs];” and

• 5 U.S.C. 301, which provides 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. This section does not authorize withholding information from the public or limiting the availability of records to the public.”

Congress's grant of broad, discretionary rulemaking authority necessarily includes the authority not to promulgate—and therefore also to withdraw or repeal—a proposed or final rule.

See Natural Res. Def. Council, Inc.

v.

SEC,

606 F.2d 1031, 1045 (D.C. Cir. 1979);

see also

5 U.S.C. 551(5) (defining “rule making” to include formulating, amending, and repealing a rule). In addition, “[t]he power to reconsider is inherent in the power to decide,”

Albertson

v.

FCC,

182 F.2d 397, 399 (1950), and, thus, “[a]dministrative agencies have an inherent authority to reconsider their own decisions.”

Trujillo

v.

Gen. Elec. Co.,

621 F.2d 1084, 1086 (10th Cir. 1980).

V. Analysis of and Responses to Public Comments on the Withdrawal NPRM

During the 60-day public comment period, we received approximately 80 public comments. The majority of commenters expressed support for the Withdrawal NPRM, and in general these comments closely aligned with comments received in opposition to the SUNSET proposed rule. A substantial number of these commenters had submitted comments on the SUNSET proposed rule and either restated, submitted, or referenced their earlier comments in explaining their support for the Withdrawal NPRM. In the Withdrawal NPRM, we discussed the substantial number of comments on the SUNSET proposed rule, and we incorporate the comments on the SUNSET proposed rule and the discussion of the underlying issues and comments in the Withdrawal NPRM by reference as part of the basis for this final rule. Below we summarize and respond to the comments on the Withdrawal NPRM.

A. Comments on Implementation Burdens on the Department and Stakeholders

In issuing the Withdrawal NPRM, the Department explained that it was concerned that implementation of the SUNSET final rule would create burdens on the Department and on stakeholders that would divert resources from pressing public health matters and thus harm the public. 89 FR 59911. Below we respond to the comments on the Withdrawal NPRM on this subject.

1. Burden on the Department

Comment:

The Department received numerous comments agreeing with HHS's explanation in the Withdrawal NPRM that the SUNSET final rule rested on a significantly flawed understanding of the time and resources that would have been needed to carry out the scope and pace of assessments and reviews required under the rule. In general, these commenters asserted that there are simply not enough HHS staff or resources to undertake such a sweeping process and simultaneously evaluate thousands of regulations in a short period of time. Several of the commenters further explained that the SUNSET final rule would create more burdens than it would ease and would be unlikely to benefit industry and consumers. In contrast, one commenter asserted that the SUNSET rule can and should be implemented and that concern regarding the enormous scope of the task and pace of reviews that would be required under the SUNSET final rule is not a valid reason to withdraw or rescind the rule. The commenter explained that, without the SUNSET framework, the quantity of regulatory reviews that the Department should undertake will grow ever more daunting as time passes and rulemaking persists.

Response:

We agree with the commenters who stated that the framework set forth in the SUNSET final rule would create a tremendous economic and workload burden on the Department and would require pursuing the objective of regulatory review at great expense to the public and to the small business community it purports to benefit. Our current RIA, revised from the SUNSET final rule, provides ample support for these assertions.

See

Section VI. The assessments and reviews required by the SUNSET final rule would be a colossal undertaking with significant resource implications. Among other things, approximately 12,400 of the Department's estimated 18,000 sections in the CFR are over ten years old and would be subject to review during the initial five-year period. Assessing more than two-thirds of all HHS regulations simultaneously in a compressed 5-year timeframe, and assessing them again on a recurring basis ten years after conclusion of the prior assessment, is infeasible. Many of these comments underscored that the SUNSET final rule failed to appreciate the scope of its effects on the Department, including that the rule could compromise some of the Department's most important public health and public safety initiatives. As stated in the Withdrawal NPRM, HHS continues to conclude that the SUNSET final rule “did not explain how HHS could devote numerous employees to full-time retrospective review without compromising the Department's and its sub-agencies' many other crucial tasks, such as protecting the country from future pandemics or other public health emergencies.” 86 FR 59911.

We disagree with one commenter's suggestion that we should disregard these concerns because we should prioritize retrospective review as provided under the SUNSET final rule. First, we disagree that the framework that would have been established by the SUNSET final rule is an appropriate model for engaging in retrospective review. As discussed in further detail in Sections V.C. and D. of this preamble, the framework that would have been implemented under the SUNSET final rule is inconsistent with the requirements and objectives of the RFA; does not fulfill the directives of EOs related to retrospective review, such as E.O. 13563 on “Improving Regulation and Regulatory Review;” and likely violates the APA. Second, the disruption to the Department's normal operations that would have been caused by the implementation of the SUNSET final rule is too sizable to disregard and is an entirely valid reason to reject these self-imposed procedures. As discussed in Section V.C below, the Department intends to continue to engage in retrospective review and to explore ways to improve those processes in a manner that is consistent with applicable law and does not undermine its core missions.

Comment:

A number of commenters supporting the Withdrawal NPRM highlighted the concern that the SUNSET final rule would shift the Department's focus away from its public health mission. Several of these commenters particularly focused on concerns that the SUNSET final rule would divert resources and attention from the urgent COVID-19 pandemic response and impact the Department's ability to develop policy and

promulgate regulations implementing new Federal laws and programs to address pandemic relief. In describing the need for the Department to remain flexible and have the capacity to respond quickly to crises and changing circumstances, one commenter gave the example of CMS needing to take action during the pandemic to swiftly approve hundreds of waivers and state plan amendments so people with disabilities could remain safely in their home. The commenter concluded that, if the SUNSET final rule had been in effect and CMS staff were hamstrung by assessments and reviews, they may not have been able to pivot quickly and review and approve states' crucial changes. Some commenters also expressed concern that the SUNSET final rule would divert resources and attention from other public health emergencies like the opioid epidemic.

Commenters also expressed concern that the volume of assessments and reviews would detract from the Department's overarching work to address the needs of vulnerable populations including children, the elderly, the disabled, those living in poverty, the LGBTQ community, patients living with HIV/AIDS, tribal members, and communities of color. Commenters stated that the SUNSET final rule would frustrate the objectives articulated in E.O. 13985, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government,” 86 FR 7009, by burdening the programs that serve vulnerable populations and communities of color.

In addition, commenters asserted that implementation of the SUNSET final rule would detract from public health and innovation in the health sector by diverting FDA staff time from regulatory science, engagement with sponsors to support product development, communication of standards to stakeholders on new therapeutic areas such as gene editing, and the conduct of timely reviews of new drug applications. Other commenters expressed concern that the SUNSET final rule would undermine FDA's ability to ensure the safety of food and medicines because the burden of assessments and reviews could divert resources from the implementation and enforcement of existing regulations impacting public safety, patient safety, and public health.

Response:

We agree that redirecting significant resources from core HHS functions and priorities to undertake assessments and reviews and preserve regulations from automatic expiration under the SUNSET final rule would be contrary to the Department's role as the U.S. Government's principal agency for protecting the health of all Americans and providing essential human services, especially for those who are least able to help themselves. The Department's ongoing experience with the current pandemic reinforces the need for the Department to remain flexible and focused on the management and utilization of HHS resources. The SUNSET final rule, however, would require HHS to redirect subject matter experts, including program analysts and administrators, economists, and counsel, to perform assessments and reviews. The SUNSET framework would require prioritizing retrospective review above many other Department programs and missions, including both ongoing program operations and the development of new policies and regulations (often necessitated by new statutory requirements) to address public health needs such as the needs of vulnerable populations and advances in health care products and services. Because of these effects, the SUNSET final rule poses a significant risk of future harm.

Moreover, as described in the Withdrawal NPRM, the SUNSET final rule provides no good cause exception to avert the expiration of a regulation, such as in the event of a pandemic, a public health emergency, or another declared national emergency. 86 FR 59912. Although the SUNSET final rule added a provision to permit the Secretary to extend the period for assessments and reviews, the extension could only be applied one time, for up to one year, per each section of regulation, and the extension could only be exercised through a determination published in the

Federal Register

. 86 FR 5725. Given the brief extension available for the assessment and review and the potential duration of an emergency (as evidenced by the current 2 years plus duration of the COVID-19 pandemic), the Department has determined that the SUNSET final rule was incorrect to conclude that this option would be sufficient to avoid the diversion of resources and the automatic expiration of regulations in the event of a pandemic, emergency, or other development that prevents the Department from timely assessing or reviewing certain sections.

Id.

at 5726. Even if a broader good cause exception were included, the option of employing an exceptional process for emergencies would not begin to address the substantial burdens imposed by, and fundamental policy and legal problems with, the SUNSET final rule, with its application to virtually all of HHS regulations.

2. Burden on Stakeholders

Comment:

Commenters representing industry and public interest groups supported withdrawing or repealing the SUNSET final rule because of the expected burden on the general public and entities with an interest in the underlying regulations. These stakeholders explained that the rule failed to adequately consider the burden imposed on regulated industry and others to both track HHS regulations for potential expiration and submit comments related to the assessments and reviews. For example, one commenter expressed concern that if the SUNSET final rule is not withdrawn, their advocacy organization would need to redirect resources to monitor the status of the approximately 2,000 FDA regulations and then, if needed, invest at least 40 to 100 hours per rule to provide comments. Another coalition estimated that over 1,000 CMS regulations would require their immediate attention if the SUNSET final rule was not withdrawn or repealed. Among industry stakeholders, one commenter stated that, rather than having a deregulatory impact, the SUNSET final rule would require near constant vigilance as relatively stable regulatory schemes like Medicaid programs would become subject to constant change.

Response:

The Department believes that any retrospective review process should not impose an undue burden on the public and agrees that the SUNSET final rule would be extremely burdensome on stakeholders to monitor and provide input on both assessments and reviews. As noted in the Withdrawal NPRM, approximately 12,400 of the Department's estimated 18,000 sections in the CFR are over ten years old, and each of these are regulations that could automatically expire five years after the SUNSET final rule's effective date if the rule were implemented. Under the timeline and definitions provided in the final rule, over 7,000 sections of the CFR that were promulgated by the 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 this agency's current regulations.86 FR 59912. These numbers indicate that the burden of public participation is significant. In addition, HHS no longer agrees with its previous approach of putting the onus on the public to monitor the Department's progress under the rule to prevent expiration.

The SUNSET final rule stated that a “safeguard” to mitigate the risk of inadvertent expiration was for the public to perform this monitoring function and submit comments requesting that the Department commence an assessment or review. 86 FR 5714. We no longer believe it is appropriate to set up a system that depends on stakeholders, including non-profits and state, tribal, and local governments, to ensure that a Department performs an administrative function properly, due to the significant resources it would require those stakeholders to invest in such an effort.

Comment:

Several commenters expressing support for the Withdrawal NPRM stated that it would be difficult, if not impossible, for the public to accurately determine whether and when a regulation would be subject to review under the SUNSET final rule, and if so, the deadline for informing the Department and commenting. Many of these commenters noted, in response to similar comments on the SUNSET proposed rule, the Department had attempted to mitigate those concerns in the SUNSET final rule by providing that the Department would (1) publish a monthly list of new assessment or review that have commenced and (2) establish a general docket where the public could alert the Department when a regulation may be at risk of expiration because of an approaching deadline for assessment or review. 86 FR 5702. However, the commenters explained that these mitigation efforts are insufficient to address the difficulty of continuously monitoring the pace of assessments and reviews and the burden on stakeholders to alert the Department regarding potentially expiring rules. Another commenter disagreed and stated that, if a section of a regulation were to inadvertently expire under the SUNSET final rule, HHS could follow the APA's flexible rulemaking procedure to readopt it.

Response:

The Department agrees that the overall framework of the SUNSET final rule would make it difficult and confusing for the Department to implement and for stakeholders to follow. For example, the SUNSET final rule would require each section of the CFR to be assessed and, if applicable, reviewed in the context of the final rule under which it was promulgated. However, final rules often cross-reference or amend previously promulgated sections of the CFR. Given this complication, it would be difficult for the HHS to accurately and comprehensively develop and maintain a list for stakeholders regarding regulations that could expire under the SUNSET final rule framework. Moreover, the Department agrees that it is unreasonable to expect stakeholders to navigate such a process. We conclude it is inappropriate for the SUNSET final rule to rely in part on the public submitting comments requesting that the Department assess or review a regulation in order to operationalize the final rule.

The Department also has determined that addressing the inadvertent expiration of a regulation under the SUNSET final rule by reissuing the implicated regulation would be inefficient, costly, wasteful, and confusing—with insufficient, and in many cases, no countervailing benefit. Such an effort would require a full notice and comment process, as well as a full economic assessment, for a proposed and final rule during which stakeholders and programs would experience the legal and regulatory uncertainty of an expired regulation.

3. Comments on Economic Evaluation of Burdens

Comment:

A few commenters disagreed with the Department's assessment in the Withdrawal NPRM of the burden of the SUNSET final rule and asserted that the Withdrawal NPRM's RIA overstated the cost estimated for implementing the SUNSET final rule. More specifically, some commenters questioned the estimates for burdens on stakeholders to comment on assessments and reviews based on these commenters' prediction that most members of the public have little incentive to take an interest in the assessment and review of individual HHS policies. One comment suggested the costs were overstated because the regulations that were the subject of stakeholder comments would be eliminating costs on these (and other) commenters. The comment also asserted that any uncertainty created by the SUNSET final rule is a “short-term cost[]” that “will be resolved as the schedules for expiration are discovered” and may be offset by the reduction in uncertainty associated with diverting HHS resources away from other actions.

Another comment asserted that HHS ignored the concept of “rent-seeking” when it considered the costs of HHS regulatory actions and the “likely unrepresentative nature of the comments received by HHS” on the SUNSET proposed rule. The commenter further stated that “rent-seeking costs” may also affect the Department's cost estimates. The commenter concluded that “[i]f the entities that submit comments to the department while it is undergoing retrospective reviews would have been rent-seeking in absence of having to write comments, then the private costs to these individuals and groups from writing comments could well constitute social benefits to society writ large.”

In addition, one comment questioned the estimates for burdens on the Department. The commenter stated that the Withdrawal NPRM's RIA used cost estimates for burdens on the Department that were inconsistent with guidance in OMB Circular A-4 and HHS Guidelines for Regulatory Impact Analysis.

8

In the commenter's view, the RIA incorrectly projected “accounting costs” from hiring new personnel to perform these tasks. The commenter asserted that, instead, the RIA should have assessed the real opportunity costs to the Department and taxpayers from the forgone activities such staff would have performed in the absence of the process required by the SUNSET final rule. The commenter also questioned the Department's assumption in the RIA for the Withdrawal NPRM that HHS would follow Small Business Administration (SBA) guidance in conducting reviews, and asserted that the costs of conducting reviews would lessen over time.

8

See

OMB Circular A-4 (available at

https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf

); HHS Guidelines for Regulatory Impact Analysis (2016) (available at

https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//171981/HHS_RIAGuidance.pdf

).

Response:

We disagree with these commenters concerning the cost estimates in the Withdrawal NPRM RIA and continue to believe that the RIA in the SUNSET final rule likely underestimated the costs of implementing that rule to a significant degree. With regard to the estimated burden on stakeholders, as discussed in greater detail in Section VI, the SUNSET final rule likely underestimated the time and resource commitment of a credible assessment and review process. The Department acknowledges that there is uncertainty in the amount of time the public would spend commenting on assessments and reviews under the SUNSET final rule. We have appropriately incorporated this uncertainty into the estimates of the burden to stakeholders by incorporating a range of estimates of the time spent per comment into our current evaluation of the burden of the SUNSET final rule. To the extent that the commenters indicate that the public would submit fewer, rather than zero, comments prior to the assessments, we have incorporated this into the Withdrawal NPRM's preliminary RIA by incorporating a lower estimate of 25

comments per assessment into our current evaluation of the burden of the SUNSET final rule. This estimate is about five percent of the comments anticipated in the SUNSET final rule's RIA for regulations that the Department announces would be rescinded following a review.

In contrast, the SUNSET final rule's RIA incorrectly based its burden estimates on an assumption that the public would forego commenting until the retrospective analysis was complete and the Department announced its intent to rescind or amend a rulemaking. We now find this assumption puzzling: It would not make sense to require a comment process for assessments if the Department thought no one would be interested in commenting. In any event, we disagree with the assumption that stakeholders will forego commenting until late in the process because it is illogical, lacks any evidentiary basis, and is contrary to the weight of the comments. Indeed, stakeholders have already demonstrated a high level of interest in the subject of this rulemaking.

9

We understand that these stakeholders would be motivated to comment because they would want to ensure that HHS has up-to-date information to correctly evaluate both the impacts of a rulemaking and potential changes to the regulations. We also note that Congress, in drafting the RFA, appeared to believe the public would be interested in commenting on reviews because it required agencies to provide an opportunity for public participation in the review process.

9

As noted above, a wide range of stakeholders submitted over 500 comments on the SUNSET proposed rule, almost all in opposition, and several stakeholders filed the

Santa Clara

lawsuit seeking to overturn the SUNSET final rule. As discussed in the Withdrawal NPRM and in Sections IV.A.2 and IV.B.1. of this preamble, many stakeholders opposed the SUNSET final rule because the threat of regulations automatically expiring would increase cost and confusion, impede competition, and harm the public health in numerous ways. Moreover, if the SUNSET final rule were to be implemented, many of these stakeholders have indicated that they would expect to expend considerable resources tracking HHS regulations for potential expiration and submitting comments.

See

Section V.A.2.

We also do not agree that uncertainty is a short term cost. The SUNSET final rule creates a continuing threat of expiration because, regardless of the “schedules for expiration,” the public cannot know what public health exigencies may arise in the future and what decisions the Department will make to serve its mission. The same uncertainty does not exist with more typical rulemakings because they have built-in safeguards, such as notice and opportunity for comment.

With regard to the comment about “rent-seeking,” this comment appears to confuse several economic concepts, including “rent-seeking,” “rent-seeking costs,” and economic rent, which makes the comment difficult to parse and understand. Additionally, we do not unambiguously attribute to the SUNSET final rule the impacts of regulations that would be rescinded or amended following a review under the SUNSET final rule. It is also not clear why the commenter anticipates that the SUNSET final rule, which would invite public comment on about 18,000 regulations over ten years, would result in public comments that are more representative of the views of the general public than the notice-and-comment rulemaking process the Department follows under the APA in this rulemaking. As such, it is not clear how the SUNSET final rule would provide a superior approach to addressing economic rents attributable to existing regulations.

With respect to the comment on the Withdrawal NPRM preliminary RIA's estimated burden on the Department, we agree with the commenter that there would be real opportunity costs to the Department and taxpayers attributable to forgone activities that would have been performed in the absence of the process required by the SUNSET final rule. While we cannot predict all of the likely forgone activities, they could include, for example, actions to address urgent public health matters such as COVID-19 pandemic relief efforts or similar efforts to respond to future emergent threats, FDA review of applications and the fulfillment of user fee commitments, work to ameliorate the opioid crisis, stem outbreaks of foodborne illness, and conduct inspections, recalls and other public health priorities. To the extent that Department would need to defend challenges related to expired regulations, such effort would further require the Department to divert resources from other public health priorities. To measure these opportunity costs, we adopt the standard approach recommended in the

HHS Guidelines for Regulatory Impact Analysis

of a “default assumption” “that the value of activities conducted during paid work time can be best approximated by the cost of labor to the employer. The standard economic model assumes that employers are willing to incur labor costs equal to the value of workers' marginal product. Conceptually, this amount represents the value of what the employee would have otherwise produced in the absence of the regulation. Thus, the opportunity cost of paid work time can be approximated based on the employer costs, including pay, benefits, taxes, and associated overhead.”

10

10

HHS Guidelines for Regulatory Impact Analysis at 27 (2016) (available at

https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//171981/HHS_RIAGuidance.pdf

). This default assumption is discussed in greater detail in Valuing Time in U.S. Department of Health and Human Services Regulatory Impact Analyses: Conceptual Framework and Best Practices” (Sept. 17, 2017) (available at

https://aspe.hhs.gov/reports/valuing-time-us-department-health-human-services-regulatory-impact-analyses-conceptual-framework

).

However, the commenter is incorrect that the assessments and reviews would be achieved solely through the reallocation of existing staff resources. As described in Section VI, implementation of the SUNSET final rule would require contributions from current and new Department subject matter experts, lawyers, and other reviewers informing the retrospective analysis and providing feedback on draft analyses, time spent by economists and other analysts developing the retrospective analysis to respond to this feedback, time spent reading and incorporating evidence from other sources, including public comments, and other activities. The SUNSET final rule RIA did not explicitly include these important activities in its estimates of the time per review. The consequence of excluding these activities in its analysis is that the SUNSET final rule likely underestimated the total costs to the Department of the SUNSET final rule to a significant degree. Our current evaluation of these costs indicates that the Department would incur additional costs to hire, train, and transfer personnel with technical expertise.

One comment argued that the Department's cost estimates in the Withdrawal NPRM are likely to be inaccurate because the comment disagreed with our assumption that the Department would follow the recommendations in the SBA guidance.

11

The commenter cited an analysis of regulatory impact analyses performed between 2008 and 2013 as support. This analysis, which predates the SBA Guidance published in August 2017, does not reference “Regulatory Flexibility Act,” “regulatory flexibility analysis,” “Section 610 reviews,” “small business,” “small entity,” or otherwise contain any evidence that the Department does not currently follow the recommendations in the SBA guidance, or any evidence that the Department would not follow these

recommendations for assessments or reviews performed under the SUNSET final rule.

11

“A Guide for Government Agencies: How to Comply with The Regulatory Flexibility Act,” (Aug. 2017) (available at

https://cdn.advocacy.sba.gov/wp-content/uploads/2019/06/21110349/How-to-Comply-with-the-RFA.pdf

).

The commenter also discussed the potential that the costs of conducting reviews will lessen over time. We are not able to fully evaluate the merits of comment since it does not provide any guide for when the Department would begin to experience these lower costs, and because it does not include a quantification of the reduction in time per assessment or review resulting in lower costs over time.

See

Section VI.

B. Comments on Potential Harms From the Possible and Actual Expiration of Regulations

In issuing the Withdrawal NPRM, the Department explained that it was concerned that, if the SUNSET final rule were implemented, both the possibility of automatic expiration of HHS regulations, and the actual expiration of HHS regulations, could harm the public. 89 FR 59914. Below we respond to the comments on the Withdrawal NPRM on this subject.

1. Impact on Stakeholders in General

Comment:

A number of commenters, including health care providers, public interest groups, and private sector entities, urged HHS to withdraw the SUNSET final rule because it would create unpredictability for industry and consumers. These commenters noted that the lack of predictability concerning the potential automatic expiration of regulations could result in the haphazard vacating of numerous existing rules without appropriate communication to regulated entities, and potentially upend long-standing foundational rules with provisions that are inter-related with other rules. The commenters expressed concern that such unpredictability regarding large swathes of the rules governing public health and welfare could lead to adverse impacts for stakeholders.

Several of these comments expressed concern that the SUNSET final rule would introduce uncertainty regarding the validity and enforceability of regulations and wreak havoc on HHS programs. Commenters noted that there would be uncertainty and confusion regarding the current and future regulatory status of rules slated for review and assessment, and that expiring regulations could leave vast, gaping holes in the regulatory framework implementing HHS programs and policies and introduce confusion and sudden shifts in regulatory requirements. Commenters further noted that if the intent of the SUNSET final rule was to ease burdens upon small businesses, it would more likely have the opposite effect. All businesses, but most especially small ones, benefit from transparent regulation that can be planned for, budgeted for, and implemented.

Among these commenters, several representatives of industry coalitions whose membership includes small entities also warned that, if not withdrawn or repealed, the SUNSET final rule could engender chaos and harm to both industry and consumers. Several commenters discussed the time, resources, and capital investments made by the food industry because of reliance on durable public standards that have been codified in regulation. The commenters expressed significant concerns about the expansive and accelerated approach taken in the SUNSET final rule and the disproportionate burden and uncertainty small entities would face should the final rule lead to the expiration of regulations that have been in place for years and are essential to a level playing field within the industry.

Commenters also described the impacts of regulatory uncertainty on public health. One commenter described the potential damaging effects the SUNSET final rule would have on the drug development process, where drug sponsors rely on a predictable regulatory environment to plan their development programs. The commenter stated that an environment in which FDA or other HHS regulations may be capriciously eliminated could hamper progress on much needed therapies in the drug development pipeline. One commenter specifically referenced the consequences of a lack of public confidence in food labeling, including the rules that inform consumers about the ingredients and nutrient content of their food, and safety rules concerning Salmonella, Shiga toxin-producing E. coli, and other potentially deadly foodborne pathogens. Other commenters provided examples of harms of uncertainty to the HHS programs such as Temporary Assistance for Needy Families (TANF) and the Child Care and Development Fund (CCDF), where a strong regulatory framework provides the clarity needed to run these programs on a day-to-day basis, gives providers guidance on their obligations, and explains to beneficiaries what their benefits mean.

Response:

We agree with these comments about the importance of a relatively steady and predictable regulatory environment and appreciate the examples of the ways the SUNSET final rule would introduce unpredictability regarding HHS regulations and the associated harms. Given the complicated resource allocation decisions necessary to implement the review framework prescribed in the SUNSET final rule, HHS is unable to forecast the number of or identify specific regulations that may expire without a completed assessment and, if applicable, review. It therefore may be difficult for stakeholders to know which regulations would remain in place because that would depend on whether the Department could actually complete each regulation's assessment and/or review by the assessment or review deadline. We concur that the potential automatic expiration of large swathes of rules, or even one complex rule, without notice of the reasoned justification for retiring that rule or set of rules, could create uncertainty and unpredictability regarding regulatory programs going forward.

Although the SUNSET final rule stated that it “does not believe uncertainty among the regulated community will add significantly to the costs of this rulemaking” because “there is always a possibility that regulations could be amended or rescinded, even absent this rule,” 86 FR 5709, HHS now concludes that this reasoning was flawed. The rule's automatic expiration of regulations is very different from amendment or rescission through notice and comment rulemaking, because there is no built-in safeguard of prior notice for automatic expiration, and no process for obtaining stakeholder input on the implications of losing the regulation. Therefore, expiration could be haphazard and unpredictable and without appropriate notice to and input from stakeholders. This outcome would be far more disruptive than the existing possibility of targeted changes to regulations based on a reasoned justification such as a change in the governing law, technology, policy, or other circumstances. Moreover, the Department generally uses mechanisms such as the Unified Agenda of Regulatory and Deregulatory Actions (Unified Agenda) and the HHS Regulatory Agenda, which are published in the

Federal Register

, to provide advance notice and predictability to affected stakeholders about specific regulations that may be amended or rescinded.

12

12

See, e.g.,

Regulatory Information Service Center, “Introduction to the Unified Agenda of Regulatory and Deregulatory Actions—Fall 2021”, 87 FR 5002, 5009 (Jan. 31, 2022).

We have now determined that the mechanisms described in the SUNSET final rule, which include a dashboard on the HHS website that shows the

progress of Assessments and Reviews and when HHS expects them to be completed, are insufficient to provide adequate clarity concerning regulations that may be subject to automatic expiration. As discussed in greater detail in Section V.E, the rule includes a number of vague and confusing provisions that would make it difficult to determine when any given section of the CFR is subject to expiration. For example, a section may need to be reviewed multiple times as part of multiple rulemakings to avoid expiration, or it may require no review at all because it has been determined to fall within an exception. The public could not necessarily predict, from looking at the dashboard, the fate of that particular section. Moreover, rulemakings could be added or deleted from the dashboard at HHS's discretion, so the fact that a particular rulemaking is absent would not necessarily mean that the public could draw conclusions regarding the rule's expiration status until the expiration date is near. For these reasons, a dashboard indicating the progress of assessments and reviews would not adequately alleviate public uncertainty about the loss of regulations. These uncertainties could have several adverse repercussions as discussed in the Withdrawal NPRM, comments to the SUNSET proposed rule and Withdrawal NPRM, and below, for example, in the following comment and response.

Comment:

A variety of commenters including states, tribes, municipalities, hospital systems, insurers, healthcare providers, and patient advocacy organizations expressed support for the Withdrawal NPRM, citing the potential consequences of the SUNSET final rule creating uncertainty about the stability and predictability of HHS regulations and causing harm if HHS regulations were to actually expire. A number of commenters described the risk of such uncertainty for the Modified Adjusted Gross Income (MAGI) regulations, which are relied upon by states and state agencies to determine who is eligible for certain Medicare and Medicaid programs, Medicare Advantage, the Children's Health Insurance Program (CHIP), and insurance affordability programs through the Health Insurance Marketplace, as well as the consequences of such uncertainty for individuals in trying to ascertain their likely eligibility for these programs. Commenters underscored that Medicaid and CHIP are large, complex, Federal-state health insurance programs that affect not only all of the states and territories, but also millions of beneficiaries, tens of thousands of providers, and hundreds of managed care plans. They stated that these stakeholders have a legitimate expectation of stability in the Federal regulatory guidelines for these programs and that predictable and reliable Federal regulations are essential to facilitate their effective implementation, so that providers understand what their obligations are, and beneficiaries can understand what they are entitled to receive. Commenters emphasized the significance of these and other HHS administered healthcare programs for seniors, children, the disabled, low-income and rural communities, and other vulnerable segments of the population including people of color, members of the LGBTQ+ community, and others who suffer health disparities, and the dire consequences they would suffer if regulations were to expire under the SUNSET final rule and safety net programs were disrupted. Commenters noted that the SUNSET final rule is at odds with the policy goals of E.O. 14009, “Strengthening Medicaid and the Affordable Care Act”, 86 FR 7793, by weakening the strong regulatory framework necessary for states to implement these complex programs that provide health care access to millions of otherwise uninsured Americans.

Other commenters described the potential impact of expiration on stakeholders in the food industry and on consumer confidence in the safety of food and medical products. They provided examples of harms that would result in the event FDA regulations concerning false and misleading medical product labeling and advertising, nutrition labeling, food safety, or food standards of identity were to expire. Comments on the SUNSET proposed rule provided numerous additional examples related to HHS programs, as discussed in the Withdrawal NPRM. 86 FR 59915-59917.

Response:

We thank the commenters for illustrating the many ways participants across the health care system and other Department programs would be harmed if they could not depend on the integrity and reliability of HHS regulations. We agree that, beyond the harm of regulatory uncertainty, the damage from actual expiration of regulations could be severe. As explained in the Withdrawal NPRM and in Section III.B., we have determined that regulations are likely to expire under the SUNSET final rule. Expiration could cause serious harm to millions of stakeholders who rely on HHS programs, including underserved populations; upend established understandings across the public health spectrum as to how to comply with statutory requirements; and disrupt established industry standards that advance public health, create a level playing field for businesses, and boost consumer confidence. Because of these potential harms, we now conclude that the automatic expiration provision is contrary to the Department's mission to protect the health of all Americans and provide essential human services, especially for those who are least able to help themselves.

States, non-state government entities, hospitals and other health providers, insurers and managed care plans, and other key stakeholders in our country's health care system structure their programmatic and business operations to satisfy the current Federal regulations. These rules help beneficiaries and potential applicants to understand the coverage they are or may be entitled to receive, patients to understand their rights in accessing and receiving care, and providers to understand their patients' coverage. As discussed in the Withdrawal NPRM, the expiration of these regulations could mean that these and other regulated entities would be unsure how to comply with long-standing statutory requirements and may no longer be compelled to comply with long-standing safety standards.

See

86 FR 59915-59917. Likewise, we now recognize, as discussed in Section V.D of this preamble, that the SUNSET final rule could result in rescinding rules in their entirety without a rule-specific justification or an opportunity for the public to comment on that justification, including identifying potential harms associated with the expiration.

2. Impacts on State, Local, and Tribal Governments

Comment:

Several tribal organizations explained that the SUNSET final rule would undermine crucial regulatory protections for AI/ANs in accessing healthcare, including HHS regulations that are based in statute and developed through years of government-to-government consultation between Tribal Leaders and HHS Leadership. Tribal commenters expressed support for HHS's Withdrawal NPRM because the SUNSET final rule threatens the regulations intended to protect AI/ANs. These commenters also opposed the SUNSET final rule because they said the Department failed to abide by the HHS Tribal Consultation Policy and conduct tribal consultation to minimize the implications of this rule on tribal governments. One tribal commenter

expressed appreciation for the change of direction on the SUNSET final rule and hoped that the Department continues in this spirit of accounting for the impact of such decisions on Tribal Nations.

Response:

HHS respects and appreciates the leadership and partnership of Tribal Nations in protecting the health of AI/ANs. The Department is committed to strengthening the Nation-to-Nation relationship between the United States and federally recognized Indian Tribes.

As discussed in the Withdrawal NPRM, HHS acknowledges that consultation with Tribal governments on the SUNSET proposed rule was not adequate. The Department also recognizes that it previously stated that the SUNSET final rule “would have no direct impact on Indian Tribes, beyond their costs of participation in the monitoring, Assessment, and Review processes,” based on an assumption that regulations would not expire. 86 FR 5711. However, we have now determined, and explained in detail throughout this preamble, that the Department's prior assumption that regulations would not expire was not well-founded. Therefore, HHS has revised its view of the impacts of the SUNSET final rule on Tribal Nations.

The IHS serves over 2.6 million AI/ANs and the Department recognizes that there are stark health disparities that persist in Tribal communities. The COVID-19 pandemic's devastating impact on Tribal communities has demonstrated the real human toll of these disparities. HHS concludes that the SUNSET final rule would only make it harder to expand access to high-quality health care across Indian Country, because it is likely to divert resources from HHS programs serving Tribes and introduce uncertainty and a threat of expiration for regulations that support HHS programs serving tribal communities. Likewise, the SUNSET final rule does not provide for advance notice of regulations that might automatically expire which would make it difficult for the Department or Tribes to initiate consultation. Moreover, even if these significant deficiencies could be improved, it would still not resolve more fundamental problems the SUNSET framework presents for tribal stakeholders, such as the burdens imposed on and uncertainties created for many stakeholders.

As discussed in the Withdrawal NPRM, HHS now acknowledges the SUNSET final rule conflicts with the Department's policy to engage in meaningful consultation.

See

86 FR 55911. HHS believes finalizing the Withdrawal NPRM is consistent with the objectives of the January 26, 2021, Presidential memorandum on “Tribal Consultation and Strengthening Nation-to-Nation Relationships,” which reaffirmed the tribal consultation policy outlined in E.O. 13175, and announced that the Biden-Harris administration priority to make respect for Tribal sovereignty, self-governance, and regular, meaningful, and robust consultation with Tribal Nations cornerstones of Federal Indian policy. 86 FR 7491.

Comment:

A number of states, municipalities, and State attorneys general expressed concern that the SUNSET final rule would pose a direct threat to state health care systems and the health and safety of their residents. The commenters indicated that states are directly threatened by the SUNSET final rule because they depend on HHS to administer trillions of dollars in Federal funding, governed by an intricate web of regulations and requirements. A comment from State attorneys general explained that, by permitting complex regulatory systems to automatically expire, the SUNSET final rule could have dire consequences for those who stand to lose health benefits or services but have no recourse to prevent that loss. One commenter stated that the SUNSET final rule stands to undermine the operations of state partners, such as state Medicaid agencies, and would impede their ability to provide services for Medicaid beneficiaries.

Response:

We agree that many diverse stakeholders throughout the country, including states, state Medicaid and other program agencies, and tribal governments, as well as health care providers, program beneficiaries, and others who rely on the legal framework established by the Department's regulations and their implementation of the relevant statutes, could experience undue disruption as a result of the SUNSET final rule. As discussed in the Withdrawal NPRM, the automatic, potentially haphazard and unpredictable expiration of regulations could result in significant disruption, based on the sudden and unexamined removal of the prior regulatory framework without accompanying explanation or replacement. We appreciate the comments highlighting challenges that this scenario could present for many stakeholders, including state and tribal governments.

3. Other Comments on Expiration

Comment:

A few commenters expressed doubt that accidental and unintended expiration of regulations would occur and pointed to the experience of North Carolina and Missouri. Each of those states has an established process for the review of state regulations that features a sunset mechanism. One commenter stated that North Carolina's process resulted in no reports of accidental expirations. The commenter suggested that, because the quantity of HHS regulations is similar to the number of all regulations promulgated in North Carolina, the process should not be difficult for HHS to implement and avoid any expiration of a regulation. A second comment stated that Missouri connects a sunset provision to a five-year periodic review requirement in a manner similar to the SUNSET rule. The commenter shared a quote from the Missouri attorney general stating that they were not aware of any regulations that had expired as a result of Missouri's sunset provision and that state agencies review every regulation under their control.

Response:

We address in greater detail in Section V.C the many significant differences between the SUNSET final rule and these and other state sunset laws—here we address only the specific points regarding the potential expiration of regulations. We disagree with these commenters in their assertions that we should extrapolate from these state examples to conclude that regulations would not expire under the SUNSET final rule because there are too many substantial differences to make a direct comparison helpful or appropriate. North Carolina's reviews are less burdensome overall because North Carolina's experience does not entail the multi-factor review and assessment required by the SUNSET final rule. We similarly find that Missouri's experience does not match the scale and scope of the SUNSET final rule's assessment and review scheme. For example, the most recent reports of the Missouri State Auditor responsible for assessing state agency compliance with periodic rule review found that the Missouri Department of Health and Human Services reviewed 759 rules and received no comments on its review and that the Department of Mental Health reviewed 156 rules and received 14 comments.

13

These rules represent a small fraction of the number of HHS regulations covering all of the HHS agencies and divisions, and the comment offers no analysis as to whether individual Missouri rules are

comparable to HHS regulations in terms of length and complexity. Furthermore, HHS regulations are national in scope, have an impact on a much greater number of programs and persons, and cover more diverse circumstances than state regulations. In issuing its regulations, HHS also follows Federal procedures and policies as set forth in statutes, EOs, and Department memoranda, which are not applicable to states. Accordingly, the review of HHS regulations is likely to entail greater complexities and the level of public interest in the HHS rules is likely to be much higher, which would result in significantly more comments. Thus, the pace and resources required to review North Carolina's and Missouri's inventory of regulations are not indicative of what HHS would experience under the SUNSET final rule, including the likelihood of expiring regulations.

13

See

Nicole Galloway, Missouri State Auditor Report No. 2019-126 (Dec. 19, 2019) (available at

https://app.auditor.mo.gov/Repository/Press/2019126349658.pdf

); Nicole Galloway, Missouri State Auditor Report No. 2017-152 (Dec. 19, 2017) (available at

https://app.auditor.mo.gov/Repository/Press/2017152319255.pdf

).

Moreover, as explained in Section III.B., implementation of the SUNSET final rule would require the Department to choose how to prioritize its resources as between (1) addressing existing and new priorities, including promulgating new congressionally directed regulations, and (2) preserving regulations from expiration. The fact that certain states with “sunset” programs can, and have chosen to, allocate resources in a way that preserves their regulations from expiration does not in any way imply that HHS would or could make the same choices in confronting this question. As explained above, we have considered the overall burdens and the ways in which full implementation of the SUNSET program would undermine other Department objectives, and we have concluded that prioritizing resources on SUNSET compliance, in order to avoid regulatory expiration, is not in the best interests of the public health and welfare. Therefore, we think regulations will expire. Whether states have made different choices does not determine the Department's analysis regarding its obligations and priorities.

C. Comments on the RFA and Retrospective Review

In the Withdrawal NPRM, we tentatively concluded that the final rule may be harmful to small entities, inconsistent with Congress's intent in enacting the RFA, and unnecessary to achieve the RFA's objectives or to incentivize the Department to engage in retrospective review. 86 FR 59917. In this section, we respond to the comments submitted both on policy issues related to retrospective review and on compliance with the RFA.

1. SUNSET Final Rule's Degree of Consistency With the RFA

Comment:

Numerous commenters supported withdrawal of the SUNSET final rule as inconsistent with the RFA. Many of these commenters agreed with HHS's assertion in the Withdrawal NPRM that the SUNSET final rule imposes requirements beyond the requirements of the RFA. Several of these commenters noted that the RFA focuses on review of only those rules that have or will have a “Significant Economic Impact Upon a Substantial Number of Small Entities” (SEISNOSE), and the SUNSET rule exceeds that scope because it requires assessment of all agency rules regardless of whether they have a SEISNOSE. One commenter noted that the majority of the regulations to which the SUNSET final rule applies do not actually fall within the scope of the RFA, citing the SUNSET final rule's assumptions, which estimate that only 15% of the Department's regulations have a SEISNOSE. Commenters also questioned HHS's authority to impose the SUNSET rule's requirements for the scale and speed of assessments and reviews in the absence of express authorization in the RFA. One commenter noted that courts have uniformly recognized the limited scope of the RFA and that the SUNSET final rule's expansion of the RFA's requirements finds no support in the text or purpose of the statute. Several commenters also noted that the RFA does not authorize agencies to retroactively impose a blanket expiration date to rescind regulations.

Response:

The Department agrees with these commenters that the SUNSET final rule's requirements exceed the RFA's requirements. Specifically, the Department agrees with the commenters who noted that the rule's requirement that the Department “assess” all HHS regulations within certain timeframes, to determine whether the regulations have or will have a SEISNOSE, exceeds the express requirements of section 610 of the RFA, which contemplates periodic review of only “rules . . . which have or will have a [SEISNOSE].” Nothing in the express language of that section requires agencies to identify such rules by conducting “assessments” of every rule issued by the agency and to comply with the SUNSET final rule's notice and comment requirements for such assessments. Indeed, section 610 does not specify any means of identifying rules that have or will have a SEISNOSE. Section 610(a)'s silence with respect to identifying rules that have or will have a SEISNOSE, when contrasted with other provisions of that section explicitly imposing specific requirements on agencies' retrospective reviews,

see, e.g.,

5 U.S.C. 610(b) (requiring agencies to consider specific enumerated factors when conducting reviews), indicates that Congress intended to leave such determinations to agencies' discretion.

See Fisher

v.

Pension Benefit Guar. Corp.,

994 F.3d 664, 671 (D.C. Cir. 2021) (“In an administrative setting, . . . `the contrast between Congress' mandate in one context with its silence in another suggests . . . a decision

not to mandate

any solution in the second context,

i.e.,

to leave the question to agency discretion.' ”).

Judicial decisions have reinforced agencies' discretion under the RFA. As the D.C. Circuit has explained, “the Act in and of itself imposes no substantive constraint on agency decisionmaking,”

Nat'l Tel. Co-op Ass'n

v.

FCC,

563 F.3d 536, 540 (D.C. Cir. 2009), but instead is limited to “setting out precise, specific steps an agency must take,”

Aeronautical Repair Station Ass'n, Inc.

v.

FAA,

494 F.3d 161, 178 (D.C. Cir. 2007). Courts have therefore instructed that the RFA “requires nothing more than that the agency . . . demonstrate[e] a reasonable, good faith effort to carry out” those steps.

U.S. Cellular Corp.

v.

FCC,

254 F.3d 78, 88 (D.C. Cir. 2001);

Aeronautical Repair Station,

494 F.3d at 178 (“[Section 604 of] the Act requires agencies to publish analyses that address certain legally delineated topics. Because the analysis at issue here undoubtedly addressed all of the legally mandated subject areas, it complies with the Act.”);

see also Montgomery Cty., Maryland

v.

Fed. Commc'ns Comm'n,

863 F.3d 485, 495 (6th Cir. 2017) (upholding agency's final regulatory flexibility analysis as “procedurally adequate”);

Zero Zone, Inc.

v.

United States Dep't of Energy,

832 F.3d 654, 683 (7th Cir. 2016) (citing

U.S. Cellular Corp.,

254 F.3d at 88);

Alenco Commc'ns, Inc.

v.

FCC,

201 F.3d 608, 625 (5th Cir. 2000) (citing

Assoc. Fisheries of Me., Inc.

v.

Daley,

127 F.3d 104, 114 (1st Cir. 1997)).

In addition to not being mandated by the RFA, the assessment process in the SUNSET final rule is an overly burdensome and unnecessary means of identifying rules that have or will have a SEISNOSE. In fact, as discussed in more detail below, we now question whether the assessment process is a reasonable exercise of the Department's discretion in light of the purpose and language of the RFA. As noted by one commenter, based on the Department's assumptions in the RIA of the SUNSET

final rule, which are adopted in the RIA of this final rule, only 530, or approximately 15%, of the Department's rulemakings impose a SEISNOSE, whereas the SUNSET rule estimates the Department would need to assess a total of 3,574 rulemakings in order to identify those rules. The Department continues to believe that, had Congress intended for section 610 to mandate such a burdensome process for identifying a minority of rulemakings that have or will have a SEISNOSE, it would have said so explicitly.

See Whitman

v.

Am. Trucking Ass'ns,

531 U.S. 457, 468 (2001) (Congress “does not[ ] . . . hide elephants in mouse holes”). Moreover, as explained in Section V.C.2 of this rule and the Withdrawal NPRM, conducting assessments of all HHS rules is not the only available means of identifying rules with a SEISNOSE, as commenters have identified numerous more targeted, efficient, and effective alternatives for identifying regulations that have or will have a SEISNOSE. We further note that, although the RFA applies across numerous government agencies, HHS is not aware of any department or agency issuing a similar sunset regulation or any litigation asserting that any department or agency, including HHS, has violated the RFA by failing to implement a rule like the SUNSET final rule.

Moreover, as explained in the Withdrawal NPRM, principles of statutory construction do not support broadly interpreting section 610 to require agencies to simultaneously consider all regulations and do so on a recurring basis to determine whether they have or will have a SEISNOSE. Section 610(a) mandates that agencies publish a plan providing for a one-time simultaneous reexamination of regulations that have or will have a SEISNOSE. Had Congress intended for this plan to provide for simultaneous review that applies more broadly to all regulations and on a recurring basis, it would have said so.

See, e.g., Salinas

v.

U.S. R.R. Retirement Bd.,

141 S. Ct. 691, 698 (2021) (quoting

Russello

v.

United States,

464 U.S. 16, 23 (1983) (“Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.”)).

The Department also agrees with commenters that the SUNSET final rule's automatic expiration provision—providing for the automatic expiration of any rule issued by the Department if it is not timely assessed or, as applicable, reviewed—exceeds the express requirements of the RFA. As explained in the Withdrawal NPRM, section 610 neither provides for automatic expiration of rules nor presumptively applies automatic expiration dates to regulations. Rather, it merely contemplates rescission or revision of rules, through the standard notice and comment rulemaking processes, only if they have or will have a SEISNOSE and if the Department has determined, based on its review of the factors set forth in section 610, that such rules should be rescinded or revised to minimize any SEISNOSE. We also note that section 608(b) of the RFA explicitly provides: “If the agency has not prepared a final regulatory analysis pursuant to section 604 of this title within one hundred and eighty days from the date of publication of the final, such rule shall lapse and have no effect.” The absence of any similar language in the RFA requiring rules to automatically lapse if an agency fails to comply with section 610 suggests that Congress did not intend for noncompliance with section 610 to have such an effect.

See, e.g., Salinas,

141 S. Ct. at 698.

The Department also notes that other requirements in the SUNSET final rule extend beyond the express requirements in the RFA. For example, the SUNSET final rule's requirements for public notice and comment procedures with respect to assessments—such as publishing in the

Federal Register

a notice within a month of commencing an assessment as well as a notice of the results of all assessments—extend beyond section 610's notice and comment requirements. Although section 610 requires notice and comment procedures for retrospective review of rules which have or will have SEISNOSE,

14

it does not require notice and comment procedures for the Department's determinations of which regulations have or will have a SEISNOSE. Additionally, the SUNSET final rule's expedited five-year timeline for the completion of certain reviews and two-year timeline for amending or rescinding regulations following such reviews go beyond the express requirements of section 610(a), which contemplate only that reviews of rules under that section be conducted “within ten years” of specific dates.

15

14

See

5 U.S.C. 610(c) (requiring agencies to publish in the

Federal Register

a list of rules to be reviewed during the succeeding twelve months as well as invite public comment on rules to be reviewed).

15

We note that, as discussed in Section V.D, expanding these timeframes would not resolve the myriad of problems with the SUNSET final rule discussed throughout this preamble, such as the burdens, confusion, and uncertainty imposed on stakeholders.

Additionally, the Department agrees with commenters that the automatic expiration provision and other requirements imposed by the SUNSET rule otherwise lack support in the language and purpose of the RFA. For the reasons already explained, the RFA does not explicitly impose or authorize these requirements. Moreover, as explained in the Withdrawal NPRM, these requirements appear to be inconsistent with the intent and purpose of the RFA as expressed in the statute's language and legislative history. Specifically, the automatic expiration provision—by providing for the automatic expiration of rules without consideration of the impact of the rules on small entities or the statutory objectives the rule implements—appears to be inconsistent with the RFA's intent to balance the objectives of the RFA with the objectives of statutes critical to public health. Congress expressed this intent in the language of section 610(a) itself, which contemplates the rescission of rules only if “consistent with the stated objectives of applicable statutes” and if the agency has determined that that the rule should be rescinded “to minimize any significant economic impact of the rules upon a substantial number of . . . small entities.” The RFA's legislative history further expresses this intent, stating that Congress did not intend for the RFA's requirements to “undermine . . . important [regulatory] achievements,” specifically those in the area of public health. 126 Cong. Rec. 21,448, 21,451 (August 6, 1980) (statement of Sen. Culver, sponsor of S. 299, which was ultimately enacted as amended as the RFA);

see also

S. Rep. 96-878 (1980) (“The Committee is emphatically opposed to any weakening of the legislatively mandated goals of federal regulation in the name of cost reduction. The bill clearly stipulates that there is to be no loss of regulatory goals. The language states that agencies shall seek and consider alternative proposals to the proposed rule `consistent with the stated objectives of applicable statutes.”). Rather, Congress intended that “agencies . . . continue to enforce [substantive] laws in a fully effective fashion,”

id.,

and that “environmental, health or safety catastrophes must never be made more likely because of flexible regulations,”

id.

at 21,455 (Description of Major Issues and Section-by-Section Analysis of Substitute for S. 299).

In addition to the automatic expiration provision, other SUNSET final rule requirements exceeding the express requirements of section 610

appear inconsistent with the RFA's intent. As explained previously in this preamble and in the Withdrawal NPRM, compliance with the SUNSET final rule's requirement to assess thousands of regulations within certain timeframes would require the agency to divert resources from the Department's significant public health objectives and potentially impair its ability to achieve those objectives. The RFA's legislative history indicates that such a burden imposed by assessments would be contrary to Congress's intent that “regulatory flexibility legislation [not] undermine . . . important [regulatory] achievements.” 126 Cong. Rec. 21,451 (statement of Sen. Culver);

see also id.

at 21,455 (Description of Major Issues and Section-by-Section Analysis of Substitute for S. 299) (addressing concerns that the RFA “might require agencies to significantly compromise the objectives of underlying statutes authorizing rulemaking”). Such burdens on the Department's ability to achieve important statutory objectives related to public health also appear inconsistent with the RFA's intent to enhance administrative efficiency in the achievement of such objectives.

See

126 Cong. Rec. 21,456 (Description of Major Issues and Section-by-Section Analysis of Substitute for S. 299) (emphasizing that “regulatory flexibility should be considered a means of improving administrative effectiveness in enforcing the regulatory statutes which the Congress has enacted rather than an additional bureaucratic burden”);

see also

S. Rep. 96-878 (stating that S. 299's findings include “that reasonable alternative rules and regulations could be developed . . . without a significant loss of regulatory efficiency”).

Furthermore, the SUNSET final rule's requirements exceeding the express requirements of section 610 also appear to be inconsistent with the RFA's purpose of alleviating the regulatory burden on small entities.

See, e.g.,

126 Cong. Rec. 21,449 (Description of Major Issues and Section-by-Section Analysis of Substitute for S. 299) (explaining that the RFA seeks to address the “unnecessary and disproportionately burdensome demands . . . [of uniform regulatory requirements] upon small [entities] . . . with limited resources”). As discussed in Section V.A and V.B of this preamble, the regulatory uncertainty created by the sudden expiration and threat of sudden expiration of regulations would disproportionately burden small entities who rely on regulations to level the playing field and lack the resources to successfully navigate a confusing regulatory landscape.

See

126 Cong. Rec. 21,453 (Description of Major Issues and Section-by-Section Analysis of Substitute for S. 299) (finding that small entities often have limited access to regulatory expertise and capital as compared to larger businesses). Additionally, the scope of and compressed timelines for the assessments required by the SUNSET final rule would undermine small entities' ability to provide input and data and otherwise participate in the assessment and review process, as well as undermine the Department's ability to meaningfully consider such information. Such a result would be inconsistent with the RFA's intent to “give small businesses a greater opportunity to participate in shaping rules which would affect them.” 126 Cong. Rec. 21,451 (statement of Sen. Culver). This result would also undermine the quality of the Department's reviews and, therefore, the Department's ability to accomplish the purpose of retrospective reviews as stated in section 610(a), which is “to minimize any significant economic impact of the rules upon a substantial number of such small entities.”

For these reasons, the Department agrees with the commenters that the SUNSET final rule's requirements exceed the express requirements of the RFA and appear to be inconsistent with the intent and purpose of the RFA as expressed in the statute's language and legislative history, as well as case law interpreting the statute. We recognize that we previously took the position, in the SUNSET final rule, that the “rule does not impose any additional burden on the Department beyond what was already called for in the RFA,” 86 FR 5705, but after further considering the RFA and its legislative history, we now consider that prior position erroneous.

Comment:

Several commenters asserted that the SUNSET final rule, including its automatic expiration provision, is consistent with section 610 of the RFA. One commenter stated that the SUNSET rule accomplishes nothing new, different from, or contrary to the RFA because the RFA expressly contemplates rule rescission as one of the outcomes of retrospective review, and the SUNSET rule's automatic expiration provision preserves rule rescission as one of the options available to HHS upon completion (or not) of retrospective review under the RFA. Another commenter claimed that a 10-year automatic expiration provision seems entirely appropriate and consistent with the RFA's Congressional intent based on the view that the RFA already requires HHS to conduct 10-year reviews under section 610. Another commenter stated that the SUNSET rule is consistent with section 610 because it simply establishes an enforcement mechanism for that section. One commenter questioned the Department's conclusion that the SUNSET final rule's assessment requirement goes beyond the requirements of section 610 and states that the Department must assess rules to determine whether a rule has or will have a SEISNOSE under section 610. The commenter also noted that assessments of rules not previously identified as having a SEISNOSE would impose a “minimal burden” because “[i]t is likely that most of th[ose] . . . regulations would remain” without a SEISNOSE and therefore “only a simple assessment of these rules would be necessary.”

Response:

The Department disagrees with the commenters that the SUNSET final rule, including the automatic expiration provision, is no different from and consistent with the RFA, for the reasons already explained in the prior comment response.

Specifically, with respect to the automatic expiration provision, the RFA contains no explicit or implicit authority for an automatic expiration provision, and such a provision is inconsistent with the RFA's intent and purpose. Thus, the Department disagrees with the commenter that the automatic expiration provision is not different from or inconsistent with the requirements in the RFA. Although section 610 of the RFA does contemplate rule rescission as a potential outcome of retrospective review, it contemplates rescission of rules only through the standard notice-and-comment process. Furthermore, that outcome would apply only to rules that have or will have a SEISNOSE and for which the agency has conducted a review considering the factors set forth in section 610 and has determined, in its discretion and based on the results of the review, whether the rule at issue “should be amended or rescinded, consistent with the stated objectives of applicable statutes, to minimize any significant economic impact of the rules upon a substantial number of such small entities.” 5 U.S.C. 610(a). In contrast, the automatic expiration provision explicitly mandates automatic rescission of any rule, regardless of whether it has or will have a SEISNOSE, not based on the agency's consideration of the relevant statutory factors or the potential for rescission to minimize SEISNOSE, but simply based on the agency's failure to conduct an assessment or review of the rule within certain timeframes. Therefore, the

commenter is incorrect that the automatic expiration provision can be equated to or is consistent with the rescission of rules under the RFA. Furthermore, as explained above, section 608(b) of the RFA explicitly requires rules to automatically “lapse and have no effect” if the agency fails to timely prepare a final regulatory analysis pursuant to section 604, and the absence of any similar language in the RFA requiring rules to automatically lapse if an agency fails to comply with section 610 suggests that Congress did not intend for noncompliance with section 610 to have such an effect.

See, e.g., Salinas,

141 S. Ct. at 698.

The Department also disagrees with commenters that the SUNSET final rule's automatic expiration provision is consistent with section 610 because that section already requires agencies to conduct 10-year reviews or because the rule simply provides an enforcement mechanism for section 610's review requirements. As already explained in the prior comment response, the SUNSET final rule's requirement that agencies assess thousands of rules without a SEISNOSE, in some cases within an expedited five-year timeframe, exceeds the express requirements of section 610. Therefore, by mandating automatic expiration of rules without a SEISNOSE when the Department fails to timely assess them, the rule's automatic expiration provision does not seek to enforce only the requirements of section 610 but also requirements not expressly imposed by that section. Moreover, the Department notes that section 611(a) of the RFA already provides a remedy for agency noncompliance with section 610: Judicial review of such noncompliance and any relief deemed appropriate by the reviewing court.

Additionally, the Department disagrees with the comment that the SUNSET final rule's assessment requirement is necessary under or consistent with section 610. Indeed, HHS is not aware of any other Federal department or agency implementing a rule similar to the SUNSET final rule. As explained in the previous comment response, although section 610 implicitly contemplates that agencies have some means of identifying rules with a SEISNOSE for retrospective review, it does not require agencies to conduct “assessments” of every rule and comply with the notice and comment requirements for such assessments. Rather, it is silent with respect to how agencies identify rules with SEISNOSE for review. This indicates that Congress intended to leave these determinations to agencies' discretion,

see Fisher,

994 F.3d at 671, and the Department, in its discretion, has now determined that the assessment process in the SUNSET final rule is overly burdensome and unnecessary for making such determinations.

Moreover, the commenter's suggestion that assessments would impose a “minimal burden” is not persuasive. The only support the commenter cited for this assertion is its speculation that assessments of rules previously identified as not having a SEISNOSE would be “simple” because “[i]t is likely that most of th[ose] . . . regulations would remain” without a SEISNOSE. However, even if the commenter is correct that such rules are likely to remain without a SEISNOSE, the SUNSET final rule would still require the Department to assess them to determine whether that is the case, and in doing so, the Department would need to examine any relevant experience with the rule since its promulgation. Furthermore, the commenter failed to acknowledge that even assessments that are potentially more straightforward than others would still be subject to the extensive requirements the SUNSET final rule imposes on every assessment, including requirements for announcing the assessment on the website and in the

Federal Register

, opening a public docket, considering comments to the docket, and publishing the full results in the

Federal Register

. Given these requirements, the Department does not agree with the commenter that any assessment under the SUNSET final rule would be “simple” or that the assessment process as a whole would impose a “minimal burden.”

2. HHS Compliance With the RFA

Comment:

Several commenters contended that withdrawal of the SUNSET final rule violates the RFA because, without the rule, the Department would not comply with section 610. These commenters asserted that HHS historically has not complied with section 610, and withdrawal of the rule would allow the Department to continue its noncompliance. Some of these commenters maintained that the SUNSET final rule is HHS's current “plan” for periodic review under section 610(a), and therefore repealing it will leave HHS without the required plan. One commenter asserted that HHS cannot repeal the SUNSET final rule because section 610 allows agencies only to “amend” their plans for retrospective review. Another commenter asserted that HHS has failed each year to “publish in the

Federal Register

a list of the rules . . . which are to be reviewed pursuant to . . . section [610] during the succeeding twelve months” under section 610(c). The commenters also claimed that the RFA requires (“shall provide for”) that HHS conduct the retrospective reviews identified in section 610 on the timelines provided for in that section, and that HHS has not adequately conducted such reviews.

Response:

We disagree with these commenters' assessments of the history of the Department's compliance with the RFA and predictions about the Department's future plans with respect to the RFA. As noted by commenters, section 610 requires agencies to: Publish in the

Federal Register

a plan for the periodic review of the rules issued by the agency which have or will have a SEISNOSE; and each year publish in the

Federal Register

a list of the rules which have a SEISNOSE and are to be reviewed pursuant to section 610 during the succeeding twelve months. HHS has complied with these requirements.

First, following the enactment of the RFA, on July 14, 1981, the Department published in the

Federal Register

its plan for periodic review as required by section 610(a).

16

That plan provides for, among other things, the Department's review of regulations that have or will have a SEISNOSE and identifies processes and principles that guide such reviews, including principles for prioritizing those reviews.

17

Accordingly, the Department has had a plan in place since shortly after the enactment of the RFA. Second, in accordance with that plan and section 610(c), the Department each year publishes in the

Federal Register

a list of the rules with a SEISNOSE that it is reviewing, has reviewed, or intends to review under section 610, along with a discussion of the Department's

commitment to compliance with the requirements and intent of section 610.

18

As required by section 610(c), this document includes for each such rule a brief description of the rule, its legal basis, and the opportunity for public comment.

19

Therefore, the commenters are incorrect that withdrawal of the SUNSET final rule would leave the Department without a plan for the periodic review of rules as required by section 610(a), or that HHS does not comply with section 610(c). The commenters have not cited any authority that either of these sections requires more.

20

16

See

Notice of Plan for Periodic Review of Rules, 46 FR 36332 (July 14, 1981). We note that FDA simultaneously published in the

Federal Register

its own plan for periodic review of its rules as a supplement to the Department's plan.

See

Notice, 46 FR 36333 (July 14, 1981) (“This notice supplements the Department plan with additional information about FDA procedures for reviewing existing rules.”).

17

See, e.g.,

46 FR 36332 (“[T]he Department and those staff divisions which administer rules will inventory and review all regulations for the purpose of selecting those regulations that should receive early, in depth review and revision, where necessary, to reduce regulatory burdens” and identifying principles to guide prioritization of review of existing regulations);

id.

(“[A]gencies and offices of the Department will seek to identify for earliest review those regulations for which revision will most advance [certain] principles,” including “[m]inimiz[ing] Federal, State, local, and private costs” and “[p]revent[ing] fraud, abuse, waste, and inefficiency”);

id.

(“The Department's semiannual agenda will advise the public of regulations selected for review”);

id.

at 36333 (“[I]t is important that to the extent possible the more costly and burdensome rules by reviewed first”).

18

See, e.g.,

Semiannual Regulatory Agenda, 86 FR 16892 (Mar. 31, 2021) (publishing under the RFA and E.O. 12866 the Department's “semiannual . . . inventory of rulemaking actions under development throughout,” including “as required by the [RFA] . . . , those prospective HHS rulemakings likely to have a [SEISNOSE],” “offering for public review summarized information about forthcoming regulatory actions the Department,” and describing and identifying examples of the Department's “agency-wide effort to support the [Regulatory] Agenda's purpose of encouraging more effective public participation in the regulatory process”).

19

See, e.g., id.

The Department also submits this information regarding rules it has identified for periodic review under section 610 in its submissions to the Unified Agenda. One commenter maintained that these Unified Agenda submissions cannot satisfy section 610 because they are not published in the

Federal Register

and they are not contained in a single document. However, as explained above, the Department publishes information satisfying section 610 in the

Federal Register

as a single document.

See, e.g.,

Regulatory Information Service Center, Introduction to the Unified Agenda of Regulatory and Deregulatory Actions—Fall 2021, 87 FR 5002, 5009 (Jan. 31. 2022).

20

Congress considered and rejected a provision included in an earlier version of the bill that would have supported the commenter's position.

See

46 FR 21449 (section 5(a) of S. 299, which was amended before being enacted as the RFA, included the following: “Each agency shall periodically review its rules and regulations in accordance with the schedule and criteria set forth in its published plan.”).

The Department also disagrees with the commenter that it cannot repeal the SUNSET final rule because section 610 permits agencies to only “amend[]” their plans for retrospective review. However, the language the commenter cites—“[s]uch plan may be amended by the agency at any time,” 5 U.S.C. 610(a)—is a broad grant of authority to agencies with respect to amending their plans for retrospective review, not a limitation.

See, e.g., Adirondack Med. Ctr.

v.

Sebelius,

740 F.3d 692, 698 (D.C. Cir. 2014) (“Congress generally knows how to use the word `only' when drafting laws.”). This interpretation of section 610(a) is also consistent with Congress's intent as expressed in the remaining language of that provision, which sets forth the general requirement that agencies publish plans for retrospective review but does not further specify how agencies develop and implement those plans. Such language stands in stark contrast to section 610(b), which explicitly imposes specific requirements on agencies' retrospective reviews.

See Fisher,

994 F.3d at 671 (“In an administrative setting, . . . `the contrast between Congress' mandate in one context with its silence in another suggests not a prohibition but simply a decision

not to mandate

any solution in the second context,

i.e.,

to leave the question to agency discretion.' ”).

We also disagree with the assertion in the comments that the SUNSET final rule is HHS's current “plan.” As described above, HHS has had a retrospective review plan in place since 1981, which was unacknowledged in the SUNSET final rule. Under that plan, among other things, the Department reviews regulations that have or will have a SEISNOSE and identifies processes and principles that guide such reviews, including principles for prioritizing those reviews. Because the SUNSET final rule never became effective, the Department has never implemented the SUNSET final rule as its retrospective review plan. Instead, HHS's longstanding plan remains operative.

Furthermore, as discussed in the Withdrawal NPRM and as noted by the commenters to that proposal, the Department has a meaningful track record of retrospective regulatory review. HHS conducts retrospective reviews of its regulations with impacts on small entities and publishes notice of the reviews in the

Federal Register

. Additionally, as acknowledged in the SUNSET final rule, the Department in 2016 and 2019 issued final rules resulting from section 610 reviews updating the requirements of participation in the Medicare and Medicaid programs for hospitals and critical access hospitals

21

and long-term care facilities.

22

These rulemakings, among other things, allowed these entities greater flexibility in meeting the requirements and eliminated unnecessary, obsolete, or overly burdensome requirements.

23

21

See

Medicare and Medicaid Programs; Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction; Fire Safety Requirements for Certain Dialysis Facilities; Hospital and Critical Access Hospital (CAH) Changes to Promote Innovation, Flexibility, and Improvement in Patient Care, 84 FR 51732 (Sept. 30, 2019) (RIN 0938-AT23);

see also

Semiannual Regulatory Agenda, 84 FR 29633 (June 24, 2019) (merged with 0938-AT23).

22

See

Medicare and Medicaid Programs; Reform of Requirements for Long-Term Care Facilities, 81 FR 68688 (Oct. 4, 2016);

see also

Regulatory Agenda, 81 FR 94754 (Dec. 23, 2016) (0938-AR61).

23

See, e.g.,

Medicare and Medicaid Programs; Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction; Fire Safety Requirements for Certain Dialysis Facilities; Hospital and Critical Access Hospital (CAH) Changes to Promote Innovation, Flexibility, and Improvement in Patient Care, 84 FR 51732 (Sept. 30, 2019).

As described in the Withdrawal NPRM and as noted by commenters to that proposal, the Department also has undertaken several other recent and significant retrospective regulatory review efforts. Several commenters noted the 2015 CMS initiative to modernize Medicaid Managed Care regulations for Medicaid and CHIP beneficiaries, and we also noted in the Withdrawal NPRM that the CMS Office of Burden Reduction and Health Informatics works to eliminate over-burdensome and unnecessary regulations. Commenters additionally noted that the Department's 2011 Plan for Retrospective Review of Existing Rules,

24

an initiative developed in accordance with E.O. 13563 and E.O. 13610, and plans the Department subsequently published from Fiscal Year 2012 through 2016, have served as a framework for its retrospective review of existing regulations. Under these plans, the Department identified rules that could be potentially eliminated as obsolete, unnecessary, burdensome, or counterproductive or that could be modified to be more effective, efficient, flexible, and streamlined. Additionally, as noted in the Withdrawal NPRM, the Department, in response to E.O. 13771, “Enforcing the Regulatory Reform Agenda,” established a Regulatory Reform Task Force that oversaw an effort to evaluate existing regulations and make recommendations to the Secretary regarding their repeal, replacement, or modification, consistent with applicable law. While this E.O. has since been revoked, the published summary reports of these reviews for Fiscal Years 2018-2020 are available on the HHS website.

25

24

Improving Regulation and Regulatory Review, 76 FR 3821 (Jan. 21, 2011).

25

FY 2021 Annual Performance Plan and Report—Regulatory Reform, HHS,

https://www.hhs.gov/about/budget/fy2021/performance/regulatory-reform/index.html.

Also noted in the Withdrawal NPRM, numerous additional regulatory efforts by HHS routinely involve the review of regulations. The Department provides technical assistance to Congress on proposed legislation, which quite often requires an assessment of the proposal's impact on current regulations. FDA also reviews regulations in responding to certain citizen petitions submitted

under 21 CFR 10.30, requesting changes in FDA regulations. Additionally, it is common for new HHS regulations to amend, revise, or modify sections of regulations in order to update, replace, or rescind requirements, or to add new definitions or clarifications, which inherently entails review of these sections.

26

As another example, regulations are reviewed to determine if guidance documents are needed to provide recommendations for complying with the regulation, which is particularly important when the regulation is necessarily general or broad to accommodate scientific and other innovation changes, and guidance is helpful to consider applicability of the regulatory provisions.

26

For example, the regulations FDA issued to implement FSMA included both the addition of new sections of regulation and revisions and modifications to existing sections.

See

FSMA Rules & Guidance for Industry (available at

https://www.fda.gov/food/food-safety-modernization-act-fsma/fsma-rules-guidance-industry#Rules

).

All of these initiatives demonstrate HHS's commitment to reviewing its regulations. Thus, the suggestion in the comments that HHS will not adequately conduct periodic review under section 610 of the RFA moving forward absent the rule is groundless and speculative. HHS is committed to effective and appropriate retrospective review of its regulations and looks forward to exploring ways to improve its processes through means other than binding regulations.

Accordingly, the Department believes that the SUNSET rule is not necessary to ensure its compliance with section 610 and that its ability to undertake regulatory review efforts in the future would be undermined by complying with the unnecessary and burdensome requirements of the SUNSET final rule.

Comment:

Several comments asserted that HHS has essentially admitted in the SUNSET final rule that, absent the rule, it does not otherwise comply with the RFA. One comment asserted that HHS admitted in the SUNSET final rule that “all prior plans” for retrospective review did not meet the requirement to publish a plan under section 610 “because each prior plan hopelessly failed to provide for any review of each regulation within ten years, if ever.” The comment also cited the following statements in the SUNSET final rule: HHS has had “limited success in performing retrospective regulatory review,” 86 FR 5738; “the Department's efforts to comply with 5 U.S.C. 610 have at times been lacking,”

id.

at 5696; and “The Department's experience over the last forty years is that, absent a strong incentive such as the potential expiration of a regulation, the Department will not review an adequate number of its regulations,”

id.

at 5739. Another comment asserted that HHS admitted that many of its rules have remained untouched for years. Two of these comments questioned the Withdrawal NPRM's assertion that many rules have remained untouched because they work as intended, asserting that the Withdrawal NPRM does not provide evidence to support this assertion. One comment asserted that if a rule finalized in the 1980s or 1990s is working as intended, that means it is likely out of date because rule's drafters could not have envisioned the technological and informational improvements that have taken place since the rule's promulgation.

Response:

The Department disagrees with the comments that the SUNSET final rule concluded or demonstrated that HHS does not comply with the RFA absent that rule, but, to the extent that the SUNSET final rule is understood to convey that conclusion, we now think that conclusion is wrong. First, the SUNSET final rule does not state that “all prior plans” for the Department's retrospective review do not satisfy section 610(a), nor could it. For example, as explained in a prior comment response, the Department in 1981 published in the

Federal Register

a plan for retrospective review that directly responds to the requirements under the RFA and provides for the Department's periodic review of regulations that have or will have a SEISNOSE.

27

Thus, HHS fulfilled section 610(a)'s “plan” requirement long before the promulgation of the SUNSET final rule. Notably, the SUNSET final rule does not even refer to this plan, let alone assert that it does not satisfy section 610(a)'s requirements.

27

See

Notice of Plan for Periodic Review of Rules, 46 FR 36332 (July 14, 1981).

Second, neither the statements from the SUNSET final rule cited by the comments, nor the evidence cited for those statements, establish noncompliance or support the comments' conclusion that HHS does not otherwise comply with the RFA. For example, the SUNSET final rule's statement that the Department has had “limited success in performing retrospective regulatory review” does not assert that the Department does not comply with section 610 specifically. As the SUNSET final rule shows, the Department under the previous administration expressed the policy position that extensive retrospective review, across the Department's entire regulatory portfolio, was appropriate and should be prioritized above other Department priorities; its statements of “limited success,” “lacking” efforts, and “adequate” review must be understood in the context of these prior expectations and priorities rather than compliance with the RFA. Furthermore, the evidence the Department cited as support also does not specifically pertain to the Department's section 610 reviews or necessarily reveal anything about them. Specifically, this evidence includes: (1) An artificial intelligence (AI) data analysis of HHS regulations identifying that “85% of Department regulations created before 1990 have not been edited; the Department has nearly 300 broken citation references in the CFR; and there are more than 50 instances of HHS regulatory requirements to submit paper documents in triplicate or quadruplicate”; and (2) a 2018 study estimating that 68% of Federal regulations have never been updated. 86 FR 5710. The SUNSET final rule does not assert that the HHS regulations identified in this analysis are regulations with a SEISNOSE subject to section 610, and there appears to be no reason to assume that is the case.

See

86 FR 5710 (acknowledging that AI “cannot at this time easily determine if a regulation satisfies the criteria listed in 5 U.S.C. 610”). Indeed, based on the SUNSET final rule's estimate that only 15% of the Department's regulations have or will have a SEISNOSE, it is possible that none of the regulations identified in either study are rules that have or will have a SEISNOSE. Thus, there appears to be no reason to conclude that the rules identified as unedited or flawed are rules with SEISNOSE that should be reviewed under section 610.

28

28

Commenters to the SUNSET proposed rule also expressed concern that the methodology of the AI review was never made public, and the SUNSET final rule confirmed that the “Department did not notify the public about this research project.” 86 FR 5710.

Another HHS statement cited by the comment—that “the Department's efforts to comply with 5 U.S.C. 610 have at times been lacking,” 86 FR 5696—also does not assert or establish that the Department does not comply with section 610. The statement merely suggests a belief that, “at times,” the Department could have improved its processes for retrospective review under section 610. It does not explicitly assert that the Department, then or now, fails to comply with the RFA. Additionally, like the data discussed above, the data the statement cites as support does not

pertain specifically to reviews conducted under section 610. Specifically, the statement cites the number of retrospective analyses the Department has conducted in response to E.O. 13563. 86 FR 5696. However, E.O. 13563, unlike section 610, does not contemplate periodic review of only rules with a SEISNOSE for the purpose of minimizing SEISNOSE but instead applies to “existing significant regulations” for the purpose of assessing a far broader set of factors not focused on small entities, including “whether any such regulations should be modified, streamlined, expanded, or repealed . . . to make [an] agency's regulatory program more effective or less burdensome in achieving the regulatory objectives.”

See

Improving Regulation and Regulatory Review, 76 FR 3821, 3822 (Jan. 18, 2011). Therefore, the Department's reviews conducted in response to that E.O. do not necessarily indicate anything about the number of reviews the Department has conducted or should consider conducting under section 610. The SUNSET final rule itself appears to recognize the limited value of these data by concluding only that “[t]hese findings

are consistent with

government assessments that the Department's efforts to comply with 5 U.S.C. 610 have at times been lacking.” 86 FR 5696 (emphasis added).

The final HHS statement cited by the commenter—“The Department's experience over the last forty years is that, absent a strong incentive such as the potential expiration of a regulation, the Department will not review an adequate number of its regulations”—is equally flawed. Again, this statement does not explicitly address the adequacy of the Department's reviews of regulations under section 610 but only generally refers to “review . . . of [ ] regulations.” Moreover, as explained above, the statement's implication that the Department has not conducted an “adequate” number of reviews must be understood in the context of the Department's policy position under the previous administration that extensive retrospective review across its entire regulatory portfolio was appropriate and should be prioritized above other agency priorities.

Third, the SUNSET final rule's discussion of the Department's section 610 compliance and record of retrospective review contains errors and misstatements. In relying on studies purporting to demonstrate that HHS's regulations have not been edited or are otherwise flawed, the SUNSET final rule appears to incorrectly assume that the age of a regulation and the fact that it has not been edited for some period of time suggests that the regulation should be and has not been reviewed under section 610 or pursuant to any of the Department's numerous regulatory review efforts.

See

86 FR 5710 (concluding the AI data “suggested that large numbers of Department regulations would benefit from retrospective review”);

id.

at 5738 (“These findings suggest regulations are not being updated to reflect evolving economic conditions and technology, even though this is a goal of the RFA.”). As the Withdrawal NPRM explained, numerous agency efforts involving the review of regulations do not result in a change in the regulation. Moreover, section 610(a) explicitly contemplates unchanged regulations, stating that “[t]he purpose of the review shall be to determine

whether such rules should be continued without change,

or should be amended or rescinded” (emphasis added). Also, as noted in the Withdrawal NPRM, the broken links and other typographical errors identified through the AI review were successfully addressed as part of the HHS “Regulatory Clean-Up Initiative,” a final rule published on November 16, 2020, 85 FR 72899, that made miscellaneous corrections, including correcting references to other regulations, misspellings and other typographical errors in regulations issued by FDA, CMS, the Office of the Inspector General, and the ACF. In addition, FDA issued a final rule to amend regulations on medical device premarket submissions to remove requirements for paper and multiple copies and replace them with requirements for a single submission in electronic format.

29

29

“Medical Device Submissions: Amending Premarket Regulations That Require Multiple Copies and Specify that Paper Copies To Be Required in Electronic Format,” 84 FR 68334 (Dec. 16, 2019).

The assumption that unedited rules have not been reviewed is incorrect for the additional reason that many rules setting industry standards have remained untouched for years, not from neglect, but because they work as intended. The OMB memo offering guidance to heads of executive departments and agencies on implementation of E.O. 13563 explicitly states that, in conducting retrospective analysis of existing rules: “Agency plans should not, of course, call into question the value of longstanding agency rules simply because they are longstanding. Many important rules have been in place for some time.”

30

The Withdrawal NPRM points to numerous longstanding regulations that bring efficiencies to industry by clarifying applicable statutory obligations, such as food regulations involving nutrition, food labeling, standards of identity, food ingredients, and color additives. Furthermore, the Withdrawal NPRM cited comments to the SUNSET proposed rule confirming that these longstanding regulations create important efficiencies for regulated industry. By contrast, the commenter offered no support for its assumption that the age of a rule and the fact that it has not been edited must mean that it is out of date with respect to its technological and informational requirements. Moreover, even if certain of such requirements could be updated to reflect technological advances, the commenter does not explain why that would necessarily mean that the rule has or will have a SEISNOSE and should be reviewed under section 610. To have a SEISNOSE, a rule must have a

significant

economic impact on a

substantial

number of small entities, and the Department considers a rule to have a SEISNOSE if it has at least a three percent impact on revenue on at least five percent of small entities.

See, e.g.,

86 FR 5749. Again, based on the SUNSET final rule's estimates, only 15% of the Department's regulations have a SEISNOSE, 86 FR 5737, which suggests that many, or potentially all, of the regulations the commenter claims have outdated technological requirements are not regulations with SEISNOSE subject to section 610 review.

30

OMB Memorandum M-11-10, “Executive Order 13563, `Improving Regulation and Regulatory Review' ” (Feb. 2, 2011) (available at

https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/memoranda/2011/m11-10.pdf

).

The SUNSET final rule made similar errors with respect to other data it cited in its discussion of the Department's RFA compliance and record of retrospective review. Specifically, the SUNSET final rule cited a review of HHS's entries in the semiannual Unified Agenda over the last ten years, which identified three entries for final rulemakings resulting from section 610 reviews.

See

86 FR 5737. Based on these data, the SUNSET final rule suggested that, during that ten-year time period, the Department conducted section 610 reviews of only 26 of its 370 rulemakings previously determined to have a SEISNOSE.

See id.

at 5737-38 (referring to “lax compliance with periodic review requirements under the . . . [ ]RFA[ ]”). However, in drawing this conclusion, the SUNSET final rule appears to improperly assume that the three final rulemakings resulting in section 610 reviews (which it estimated

amended CFR sections equivalent to approximately 26 rulemakings) represented the only section 610 reviews conducted by the Department during this ten-year time period.

See id.

at 5737 n.213. In so concluding, the SUNSET final rule again relied on the flawed assumption that a section 610 review must result in the amendment of a rule or a new rule, and thus excluded all other section 610 reviews indicated in the Unified Agenda during that time period. As a result of that exclusion, the Department incorrectly assessed the scope of rulemakings the Department reviewed under section 610 during the last ten years.

The SUNSET final rule's discussion of the Department's RFA compliance also contains misstatements and other errors. The SUNSET final rule cited three “examples of regulations that [commenters] and/or Congress have requested the Department to review, but that the commenters claimed were not reviewed.” 86 FR 5696. Although the SUNSET final rule did not take a firm position on the status of these examples, the implication that these matters are inactive is factually incorrect. For example, the Fall 2021 Unified Agenda includes planned action to harmonize the differences between the Basic HHS Policy for the Protection of Human Research Subjects (45 CFR part 46, subpart A) and the FDA regulations for the protection of human subjects (21 CFR parts 50 and 56).

31

The Fall 2021 Unified Agenda also includes several planned regulatory actions by FDA's Center for Veterinary Medicine (CVM) to revise

32

and in certain instances withdraw several regulations based, in part, on the comments received in dockets issued in 2017 seeking comments and information from interested parties to help FDA identify existing regulations and related paperwork requirements that could be modified, repealed, or replaced, consistent with the law, to achieve meaningful burden reduction while allowing us to achieve our public health mission and fulfill statutory obligations. In addition, CMS revised the Medicare Beneficiary Program Manual (MBPM), in accordance with the national settlement agreement in the

Jimmo

v.

Sebelius

litigation.

33

Moreover, the SUNSET final rule did not assert that these regulations have or will have a SEISNOSE, or even that the commenters or Congress asserted that they do, and thus, the rule failed to demonstrate how, if at all, these examples implicate the Department's retrospective review efforts under section 610.

31

See

Protection of Human Subjects and Institutional Review Boards, RIN 0910-A107 (Fall 2021) (available at

https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI07

).

32

See, e.g.,

Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Food for Animals, RIN 0910-AI24 (Fall 2021) (available at

https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI24

); Phased Review of New Animal Drug Applications, Electronic Submission, and Master Files, RIN 0910-A135 (Fall 2021) (available at

https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI35

); Revision of Requirements for the Establishment and Maintenance of Records Related to Medicated Animal Feed and Veterinary Feed Directive Drugs Office of Information and Regulatory Affairs, RIN: 0190-AI67 (Fall 2021) (available at

https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202110&RIN=0910-AI67

).

33

See Medicare Beneficiary Policy Manual,

Chapters 7 (Home Health), 8 (Skilled Nursing Facilities) and 15 (Outpatient Therapy) (available at

https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs-Items/CMS012673

). We note that the SUNSET final rule referred to a comment stating that

regulations

covering access to skilled therapy services had not been updated to reflect the national settlement in

Jimmo

v.

Sebelius. See

86 FR 5696. However, the settlement agreement requires HHS to amend the

Medicare Benefit Policy Manual

to clarify the coverage standards, not to amend Medicare regulations.

See

“IX. Injunctive Provisions” in Settlement Agreement, at 8-14 (available at

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Jimmo-Settlement-Agreement.pdf

).

The remaining data cited in the SUNSET final rule's discussion of the Department's RFA compliance lacks relevance to that discussion. For example, the SUNSET final rule asserted that good governance stewardship actions were deprioritized and relegated to “rainy day” activities the Department operating divisions would get to when they could, citing a review conducted in 2019 that entailed an AI data analysis of HHS regulations. 86 FR 5697. As already discussed in this response, the AI review results do not indicate whether any of the rules it identified as not updated or otherwise flawed have or will have a SEISNOSE, and thus the rule fails to demonstrate how, if at all, this review implicates the Department's activities under section 610. Furthermore, as noted above, the broken links and other typographical errors identified through the AI review process were successfully addressed as part of the HHS “Regulatory Clean-Up Initiative.” As another example, the SUNSET final rule also cited “government assessments that the Department's efforts to comply with 5 U.S.C. 610 have at times been lacking,” 86 FR 5696; however, these sources at most indicate at times in the past the Department could have reviewed more rules under section 610, and therefore, these sources do not demonstrate that the Department does not currently comply.

34

34

See, e.g.,

Curtis W. Copeland, Cong. Rsch. Serv., RL32801, Reexamining Rules: Section 610 of the Regulatory Flexibility Act 8 (2008) (“[I]t would be reasonable to expect that, since [certain departments] indicated that they intended to issue a large number of rules each year with a significant effect on small entities, those same agencies would need to reexamine a large number of rules each year under Section 610.”); U.S. Accountability Off., GAO/GGD-94-105, Regulatory Flexibility Act: Status of Agencies' Compliance (1994) (citing an SBA report from 1983 suggesting potential for improving the Department's review plan).

The SUNSET final rule's discussion of “[m]achine-learning tools . . . [that] demonstrate the complexity of Department rules” similarly lacks relevance to the Department's compliance with section 610. The rule cites data showing that the Department's regulations in 2019, “based on the amount of information contained in text,” were “more complex than a typical Shakespeare play,” and notes that “reducing complexity is another goal of the RFA.” 86 FR 5738. However, as with much of the data already discussed, these data do not purport to relate specifically to rules that have or will have a SEISNOSE, and thus, again do not necessarily implicate the Department's efforts under section 610. Moreover, even if these data were specific to regulations with a SEISNOSE, the Department does not agree with the SUNSET final rule that these data demonstrate that its regulations are overly complicated. As the SUNSET final rule itself acknowledges, complexity in the Department's regulations “is not . . . surprising given that the regulations often involve science, engineering, or highly technical material.” 86 FR 5738.

Moreover, the Department disagrees that “the amount of information in text” is a reliable proxy for complexity that is unnecessary or undesirable given that, in the Department's experience, providing more information in a regulation can often enhance clarity. For example, in FDA's experience, often in response to a proposed rule, commenters will request that the agency provide examples in the codified text which can lengthen the text but clarify the requirements. For example, a good manufacturing practices rule may require that “qualified personnel handle x.” So, to better explain what constitutes “qualified personnel,” the codified text may include examples such as education, years of work experience, etc. The examples are general and not prescriptive so that the regulated entity can exercise flexibility in determining what is applicable to their industry and their unique

manufacturing processes. Thus, while the codified text may be longer, it is not inherently more complex or burdensome.

3. Policy Considerations Related to Retrospective Review

Comment:

Some commenters opposed finalizing the Withdrawal NPRM because, in their view, there is a need for HHS to conduct more retrospective review. Several commenters asserted that HHS regulations are outdated. One comment stated that greater retrospective review is needed because “the costs of regulations frequently exceed what was projected at the time of promulgation,” citing information from the preamble to the SUNSET final rule. Another comment stated that there is an “overall lack of an evidentiary basis for many of [HHS's] regulations” and cited a working paper

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criticizing the Department's retrospective review and HHS regulations' identification of a problem that would be solved by the regulation. Several comments stated that widespread retrospective review is appropriate because, if the public must comply with HHS regulations, HHS should have to review them. Approximately ten identical anonymous comments stated that the Withdrawal NPRM should not be finalized because withdrawal or repeal of the SUNSET final rule would ensure Americans continue to be subject to costly, burdensome regulations and, before adding additional burdens on the American people, HHS should determine if its existing regulations are helping or harming them.

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Ellig, Jerry, “Evaluating the Quality and Use of Regulatory Impact Analysis: The Mercatus Center's Regulatory Report Card 2008-2013” Mercatus Center at George Mason University (July 2016) (available at

https://www.mercatus.org/publications/regulation/evaluating-quality-and-use-regulatory-impact-analysis

).

Response:

HHS does not agree that the SUNSET final rule should be retained for any of the reasons cited by commenters. First, even assuming that HHS would benefit from m

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