Health Regulation’s Ticking Time Bomb

On the Trump Administration’s last day in the White House, it delivered a final parting gift to the incoming Biden Administration—a regulatory “ticking time bomb.”

If unaddressed, the so-called bomb in question—the Securing Updated and Necessary Statutory Evaluations Timely (SUNSET) rule—could cause more than 18,000 regulations from the U.S. Department of Health & Human Services (HHS) to disappear. The SUNSET rule requires HHS to review all of its existing regulations by the tenth anniversary of their enactment within the next five years. If HHS does not comply, the unreviewed regulations will automatically expire. HHS has an estimated 17,200 regulations that will disappear if the agency does not review them by 2026.

Reviewing thousands of regulations, however, is no easy task. If HHS wants to ensure that its existing regulations remain in place, it will need to conduct an estimated 680 regulatory reviews per year. By comparison, the department only reviewed 111 rules in 2018 and 15 in 2019.

According to critics of the rule, each review essentially requires the same amount of effort as a “full notice-and-comment rulemaking,” which can take up to a year or more per rule. To meet the target of 680 reviews per year, it is estimated that HHS would need to review rules “at a pace 20 times faster than the Department has ever conducted retrospective review in the past.”

The SUNSET rule will not only impact HHS, but also the 11 sub-agencies it houses, including the U.S. Food & Drug Administration (FDA), the National Institutes for Health, and the Centers for Disease Control and Prevention (CDC).

For example, more than 95 percent of FDA’s existing rules are currently more than ten years old or will become ten years old within the next five years. Without review, regulatory protections on food safety, vaccines and pharmaceuticals, and medical devices could expire. To prevent this outcome, FDA—which has devoted much of its resources to addressing the COVID-19 pandemic—would need to divert resources and staff away from the public health crisis to review its regulations instead.

If HHS staff were unable to review regulations in time, private businesses subject to these rules could suddenly find themselves operating without any regulatory oversight—oversight that is often intended to ensure safety standards required of medical professionals, the operation of hospitals, and protections for children and the elderly. Entities that would be affected by expiring regulations in the health care industry alone make up nearly one fifth of the U.S. economy.

Last month, a group of health and consumer advocacy organizations filed a lawsuit to vacate the SUNSET rule. They allege that the SUNSET rule should be eliminated because it violates multiple federal administrative statutes, including the Administrative Procedure Act and even the Regulatory Flexibility Act, which directs federal agencies to conduct periodic review of adopted regulations.

In addition to alleging violations of these federal statutes, the plaintiffs argue that if thousands of regulations expire because of the SUNSET rule, it could result in “regulatory chaos, uncertainty and elimination of key protections.” Such an outcome could significantly thwart operations within various regulated entities and at the expense of patients receiving health care, they suggest.

The plaintiffs in the lawsuit are not the only ones critical of the SUNSET rule. Other critics claim that because the rule was introduced during the pandemic, the Trump Administration took advantage of a time when HHS and its sub-agencies were occupied with treating patients and managing surging ICU capacity. Despite the rule’s potentially widespread effects, HHS allegedly left some stakeholders—such as Indian tribes—out of the consultative process because it only provided an abbreviated 30-day window for notice and comment. Of the comments submitted during the notice and comment period, only two percent, or eight total submissions, supported the SUNSET rule.

Proponents of the SUNSET rule, however, suggest that a holistic retrospective review could yield significant economic benefits and save lives. The COVID-19 pandemic, proponents claim, has signaled that a comprehensive review of health care related regulations is long overdue. The SUNSET rule thus serves as a needed medium of accountability to ensure federal agencies are not retaining regulations that impose unnecessary compliance costs for small businesses and taxpayers, these proponents contend.

The SUNSET rule’s momentum may be short lived under the Biden Administration. Under newly confirmed HHS Secretary Xavier Becerra, the department announced last month that it would delay the implementation of the SUNSET rule for a year while courts assess the pending lawsuit.

Although the future of the SUNSET rule remains uncertain, it has also captured Congress’s attention. Last week, U.S. Representatives Raja Krishnamoorthi (D-Ill.) and Anna Eshoo (D-Calif.) introduced a resolution under the Congressional Review Act, a law which authorizes Congress to review and potentially reject new regulations created by federal agencies. If the resolution passes in both houses of Congress and President Biden signs it into law, the SUNSET rule may be repealed before HHS has an opportunity to revisit it next year.