other non-annual rules in the past. Other commenters believe that HHS
is already doing a fulsome review as required by the RFA. Several
commenters stated that in 2011, the Department posted its final plan
for retrospective review of existing regulations, and from 2012-2016 it
provided semi-annual updates on its website listing the rules
undergoing or scheduled for review. Some commenters suggested that
previous executive orders that called for periodic review of existing
regulations are a sufficient means of ensuring the Department is
conducting these periodic reviews. Commenters suggested that the
Department continue to conduct retrospective reviews using its already
established process and provide regular updates to the public on its
progress. Other commenters stated that the Department does not address
why it failed to perform the required regulatory reviews in the past,
nor how the process proposed in the proposed rule will make a
difference.
    A few commenters noted that even though previous executive orders
have prioritized regulatory reviews, most observers to date note that
these kinds of reviews have failed to be institutionalized by agencies,
including HHS. These commenters cited evidence suggesting that despite
efforts to review regulations over the years and to reduce regulatory
burdens, the total number of regulatory restrictions that have been
issued by HHS continues to grow year after year, except for two brief
periods around 1980 and during the mid-1990s (perhaps as part of
deregulatory efforts).
    Response: The Department respectfully disagrees that this final
rule is unnecessary and duplicative. While commenters are correct that
HHS annually updates the annual Medicare payment rules, those rules and
certain other rules that are updated annually are exempt from this
final rule. This final rule also exempts the rules at 42 CFR part 73,
since those are periodically reviewed. Regarding the 2011-2016
retrospective review plan and reviews, that effort was helpful but
sporadic, not sustained. As explained in the proposed rule, these
efforts only resulted in review of a small fraction of rules. See 85 FR
at 70099. The failure to institutionalize retrospective review further
underscores the need for this final rule and the review process it is
implementing. A few instances of the Department taking the initiative
to review its regulations cannot reasonably be considered a sufficient
regulatory review when thousands of regulations that have been
promulgated over the decades have not been touched.\123\
---------------------------------------------------------------------------

    \123\ See, e.g., 85 FR at 70111 (explaining that as of 2019, 85%
of Department regulations created before 1990 had not been edited,
and the Department had nearly 300 broken citation references in the
CFR).
---------------------------------------------------------------------------

    Comment: Many commenters questioned the Department's plan for
personnel resources to conduct the Reviews prescribed by this final
rule. These commenters believe that the Department underestimated the
number of people who would be needed to conduct the Reviews, and stated
that the personnel resources would be better utilized on other
projects. For example, some commenters stated that the Department is
already too slow in promulgating certain regulations, and should task
its employees with carrying out the Department's existing duties.
    Response: The regulatory impact analysis for this final rule
describes the personnel resources that the Department envisions being
used to conduct Assessments and Reviews. The

sensitivity analysis therein addresses the possibility that costs could
be lower than estimated in the proposed rule. Periodically reviewing
regulations with a significant economic impact upon a substantial
number of small entities is an existing Department duty. Moreover, as
discussed elsewhere herein, retrospective review can yield tremendous
benefits. The literature and the Department's experience suggest that
large numbers of regulations are having impacts that, over time, differ
from what was estimated at the time the regulations were promulgated.
Therefore, the Department should prioritize conducting periodic reviews
of its regulations to determine whether the policy goals behind the
regulations are in fact being effected (and if amending those
regulations could more effectively further those goals).
    Comment: A few commenters questioned whether the Department should
have employees Assess or Review regulations if those employees are not
responsible for implementing them. These commenters stated that if
reviewers have not worked on matters connected with the regulations
they are Reviewing, those reviewers may not have an adequate
understanding of the regulations, which could lead to the expiration of
regulations that are essential to the successful operation of the
Department's programs.
    One commenter also disagreed with the premise of the Department's
use of career civil servants to conduct regulatory reviews. This
commenter stated that the proposed rule was logically inconsistent
because it ``maligned'' career public servants at the Department for
not reviewing the Department's regulations, but also proposes to task
these same individuals with carrying out the proposed review process.
    Response: Which Department officials Assess or Review particular
regulations will be decided on a case-by-case basis, but those
conducting Assessments and Reviews will generally be employees who are
familiar with those regulations, as well as technical experts,
including economists. The Department strongly disagrees with the
comment that the proposed rule ``maligned'' career civil servants. The
proposed rule quoted a law professor who was suggesting several reasons
why retrospective reviews do not occur as often as desired. The
Department believes career civil servants can capably Assess and Review
regulations, just as they capably conduct regulatory impact analyses
and regulatory flexibility analyses.
    Comment: Several commenters stated that the two-year timeline for
review of all regulations over ten years old was insufficient. A number
of commenters suggested that the timeline be extended to five years.
    Response: The Department has considered these comments and has
decided to revise the rule in light of them. Under this final rule,
regulations issued more than ten years prior to the final rule's
effective date will not expire if Assessed and (if necessary) Reviewed
within five calendar years of the effective date of this final rule.
Moreover, under this final rule, if the Secretary makes a written
determination that the public interest requires continuation of the
Section (as defined in the text of the final rule) in force beyond the
date on which the Section otherwise would expire, the Secretary may
continue the Section in force one time for a period stated in the
determination, which period shall not to exceed one year.
    Comment: Several commenters stated that the proposed rule would
cause significant regulatory uncertainty in the healthcare industry,
which would not know which regulations may or may not expire. Some
commenters stated that the proposed rule would cause uncertainty for
states, which implement Federal programs and rely on Federal
regulations and funding. Potential regulatory changes could create
additional compliance and regulatory costs for healthcare providers
which may be forced to adapt to a changing regulatory framework.
Changes may also trigger regulated entities to forgo future investments
because they lack regulatory clarity. For example, some commenters
stated that the uncertainty created around the expiration of
regulations, including those that guide eligibility for Medicaid,
Medicare provider reimbursements, or certification of hospitals and
clinics, could disrupt the efficient operation of critical safety-net
programs, create regulatory gaps and inconsistent application of the
law, and make accessing safety-net services for our most vulnerable
populations even more complicated and difficult than it is today. Some
commenters said the poor, people of color, and/or the LGBTQ community,
would be particularly affected. Additionally, some commenters stated
that the proposed rule would make it difficult for them to advise
clients on how to comply with the Department's regulations. These
commenters stated that if HHS determined that a regulation required
modification, it should clearly publicize its intention to exercise
enforcement discretion in not enforcing the then-current iteration of
the regulation while the particular regulation is being modified.
    Other commenters stated that the regulatory review process set
forth in this rule would ensure that HHS reviews regulations as
required by the RFA, which means that if HHS were currently complying
with the RFA in a satisfactory manner, there would be little additional
uncertainty stemming from the proposed rule.
    Response: The Department notes that there is always a possibility
that regulations could be amended or rescinded, even absent this rule.
The Department does not believe uncertainty among the regulated
community will add significantly to the costs of this rulemaking for
the following reasons. The Department's sporadic use of periodic
retrospective review--notwithstanding the RFA and Executive Orders--
itself leads to ``uncertainty'' about how robustly the Department
implements directives that make for good policy.\124\ To the extent
that the Department can maintain compliance with its obligations, this
should build trust in the Department and reduce uncertainty (offsetting
some or all of the uncertainty discussed by the commenters, if such
uncertainty exists). Further, as noted above, the Department plans to
release information about the 18,000 regulations under its authority
and when they were adopted, such that any uncertainty surrounding the
expiration dates of the Department's various rulemakings will be
reduced substantially, if not entirely. Additional measures to mitigate
private costs are discussed in the ``Operationalization of This Final
Rule'' section of this final rule. Second, the Department notes that
many states and foreign jurisdictions have sunset provisions that are a
routine part of their regulatory processes. If the sunset reviews in
these other jurisdictions do not create tremendous uncertainty, it
stands to reason that neither will this final rule. The regulatory
impact analysis for this final rule describes in more detail the sunset
provisions from these other jurisdictions.
---------------------------------------------------------------------------

    \124\ To the extent this uncertainty has been lessened because
the public has seen how the Department has implemented these
directives over the course of many years, the same can be said for
this final rule once it has been implemented for several years.
---------------------------------------------------------------------------

    Under this final rule, the regulated community has five years to
adjust to the changes made by this final rule, so any reliance
interests are significantly reduced as compared to the proposed rule.
Where appropriate, the Department would announce the regulations for

which it is exercising enforcement discretion.
    Comment: A few commenters stated that the Department should allow
reasonable reliance on a regulation while that regulation is under
review, and for a reasonable time after a decision to amend, rescind or
allow a regulation to expire. These commenters also stated that the
final rule should allow the Department to extend a regulation for any
period of time reasonably necessary for regulated entities relying the
regulation to adjust their business practices.
    Response: HHS appreciates the commenters' concern regarding the
reliance interests of regulated entities; however, HHS respectfully
disagrees with the premises of these comments. First, HHS does not
intend to allow a regulation to simply expire. And as explained in the
proposed rule, the public will have the opportunity to provide comments
identifying regulations that the public believes need to be Assessed
and Reviewed, which mitigates the risk of inadvertent expiration.
    Second, with respect to Sections that, after Review, the Department
determines should be amended or rescinded, such Sections will be
amended or rescinded through a separate notice-and-comment rulemaking
process. Considerations about the effective dates of such amendments or
rescissions, including the need to allow adequate time for transition,
will be taken into account in that separate rulemaking process.
Finally, Review under this final rule expressly considers ``the
continued need for the Section,'' so regulated entities' reliance
interests will be taken into account during Reviews.
    Comment: Several commenters stated that the use of artificial
intelligence and machine learning technology in regulatory review is a
novel and innovative approach, and members of the public should have
been afforded notice of the Deloitte research project and the
opportunity to comment on the use of this technology. In particular,
these commenters wanted to understand if and how the technology would
be used by HHS to identify the regulations that will be reviewed. Some
commenters asked HHS to provide additional information regarding the
methodology used, and the underlying algorithm. A few commenters stated
that all code should be posted on a publicly-accessible website,
consistent with best practices among academic researchers in data
science.
    Response: The Department agrees that the use of artificial
intelligence machine learning technology in regulatory review is a
novel and innovative approach. The technology discussed in the proposed
rule was initially used to perform an internal assessment of Department
regulations, which is why the Department did not previously notify the
public about this research project. Artificial intelligence will not be
used to perform Assessments and Reviews pursuant to this final rule.
While artificial intelligence can determine if a regulation has been
amended in the last thirty years, it cannot at this time easily
determine if a regulation satisfies the criteria listed in 5 U.S.C.
610. The artificial intelligence review was useful, because it
suggested that large numbers of Department regulations would benefit
from retrospective review. The technology identified 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. This suggests
humans performing a comprehensive review of Department regulations
would find large numbers of requirements that would benefit from
review, and possibly amendment or rescission.
    Regarding the technology used to perform the 2019 analysis, the
analysis was performed using a tool called RegExplorer. RegExplorer is
an ``augmented intelligence'' tool, meaning it is designed to use
artificial intelligence in conjunction with subject matter experts.
While RegExplorer is proprietary technology, some of the models
deployed within RegExplorer include keyword technology (a structured
and iterative approach to process, analyze, and return keyword search
results); a clustering algorithm (a cluster is a machine-generated
group of regulatory documents that have been algorithmically gathered
together based on a set of similar characteristics, such as the
relevant sub-agency, placement of text within the regulatory dataset,
similarity of text content, and text format and structure); citation
extraction and mapping; and similar section analysis.
    Comment: A few commenters asked why HHS chose to redact some of the
``Regulatory Streamlining & Analysis'' published by Deloitte in March
2019 that the Department cites in support of the proposed rule. These
commenters pointed out that two of three bullet points in the
``executive summary'' slide, and all but 25 of the document's 170 pages
are redacted. These commenters asked why this information was not made
available to the public, and why HHS did not have a public meeting to
discuss the Deloitte findings and solicit feedback on its regulatory
reform ideas back in 2019.
    Response: The Department was transparent by including the Deloitte
analysis in the docket for this rulemaking. The redacted information is
information protected by applicable privileges, is confidential
information, trade secret information, or not relevant to this
rulemaking. As can be seen from the Table of Contents for the analysis,
the redacted information does not relate to the machine learning
analysis that was conducted to enhance regulatory reform that was
discussed in the proposed rule. In November 2020, the Department held a
public hearing on the proposed rule, which referred to the Deloitte
presentation. The public was able to opine on the analysis at that
public hearing. The Department did not have a public meeting to discuss
the Deloitte findings and solicit feedback in 2019, because the
Department was at the time still undergoing its internal deliberative
process.
    Comment: A few commenters stated that ideally the systematic
evaluation of regulations should be a regular part of the rulemaking
process, with the evaluation criteria and timeline embedded within each
new rule so that the regulated community has an opportunity to opine on
how and when each regulation will be reviewed. Commenters suggested
that HHS identify up front what data it will use to track the progress
of the regulation, and commit to continually collecting the same kinds
of data over time. Such a process would make future evaluation of
regulations and programs easier. It would also improve public
accountability because the public would have a clearer sense of what
the regulation is designed to achieve, and can monitor HHS's progress.
    Response: HHS agrees with the commenters' focus on the need to
systematically evaluate the effectiveness of agency regulations--
indeed, the Department has proposed the instant rule in order to make
such evaluations more frequent and comprehensive. The timeline for
Review of a given Section is set forth in section [XX](c)(1), and the
criteria for Review are set forth in [XX](d). As is current practice,
the Department intends to explain in the preambles to future rules what
goals the rules are intended to achieve. This will enable the public to
know what goals each regulation is designed to achieve. However, the
data necessary to evaluate a particular rule will differ from rule to
rule, and the Department cannot

generally commit to such collection in advance and in the abstract,
although it may be useful to do so in particular cases.
    Comment: One commenter suggested that HHS consider performing a
cost-savings analysis for regulations receiving a Review under the
proposed rule, or for that subset of Assessed regulations that are
deemed significant or economically significant. Such analysis could
include estimates of the costs, cost savings, and the net cost savings
of the regulation.
    Response: For purposes of this final rule, the Department has
decided to limit the Review criteria to the criteria listed in 5 U.S.C.
610, plus whether the regulation complies with applicable law. These
are the criteria that Congress directed the Department to use in its
periodic reviews, plus a review for compliance with the law.
Determining the regulation's costs, as well as cost savings from
amendment or rescission, will often be subsumed in the five criteria
listed in 5 U.S.C. 610.
    Comment: A large number of commenters stated that the proposed rule
would negatively impact programs if review efforts are underfunded, or
that the proposed rule was costly and unfunded.
    Response: The Department disagrees that regulatory review efforts
would be underfunded. As explained in the regulatory impact analysis,
this final rule will impose relatively low costs on the Department.
    Comment: Several commenters, including Tribal governments and
representatives, affiliated groups of Indian Tribes, and the IHS Tribal
Self-Governance Advisory Committee, stated that the Department should
have consulted with Tribal governments on the rule and failed to notify
Tribal leaders and representatives of the proposed rule in violation of
HHS's duty as a federal agency to consult with Tribal nations under
Exec. Order No. 13175 of Nov. 6, 2000, 65 FR 67249 (Nov. 9, 2000) (E.O.
13175) and the Department's own Tribal consultation policy.
    Response: The Department and Indian Tribes share the goal to
establish clear policies to further the government-to-government
relationship between the Federal Government and Indian Tribes. True and
effective consultation shall result in information exchange, mutual
understanding, and informed decision-making on behalf of the Tribal
governments involved and the Federal Government. The importance of
consultation with Indian Tribes was affirmed through Presidential
Memoranda in 1994, 2004 and 2009,\125\ and E.O. 13175. HHS believes
that neither the proposed nor the final rule violate the Department's
Tribal consultation policy or E.O. 13175. Subject to certain
exceptions, the policy and E.O. 13175 require consultation before any
action that will significantly affect Indian Tribes, or before
promulgating any regulation that has Tribal implications. HHS believes
that this final rule does not significantly affect Indian Tribes or
have Tribal implications, as those terms are used in the policy and
E.O. 13175. This final rule amends existing regulations to provide that
the regulations will expire if not Assessed and (if necessary) Reviewed
by certain dates. HHS intends that all rules will be Assessed and (if
necessary) Reviewed timely. Therefore, this final rule would have no
direct impact on Indian Tribes, beyond their costs of participation in
the monitoring, Assessment, and Review processes. As explained in this
final rule's regulatory impact analysis, the estimated total monitoring
costs to the public over ten years is estimated to range from $52.2
million to $156.7 million using a 7% discount rate, or $58.8 million to
$176.3 million over ten years using a 3% discount rate (all figures
using $2020). The U.S. Census estimates that in 2019, 1.7% of the U.S.
population was all or partially American Indian or Alaska Native.\126\
1.7% of the estimated monitoring costs would be roughly $887,400 to
$2.66 million over ten years using a 7% discount rate, or $999,600 to
roughly $3 million over ten years using a 3% discount rate (and the
cost to Tribes could be less since not every American Indian or Alaska
Native is affiliated with a Tribe). Tribes will be able to comment on
regulations during the Assessment and Review processes.
---------------------------------------------------------------------------

    \125\ Presidential Memoranda on Government-to-Government
Relations With Native American Tribal Governments, 85 FR 22951 (May
4, 1994), Presidential Memorandum, Government-to-Government
Relationship with Tribal Governments, September 23, 2004, https://www.govinfo.gov/content/pkg/WCPD-2004-09-27/pdf/WCPD-2004-09-27-Pg2106.pdf, Presidential Memorandum on Tribal Consultation, 74 FR
57879 (Nov. 9, 2009).
    \126\ ACS Demographic and Housing Estimates, U.S. Census Bureau,
https://data.census.gov/cedsci/table?q=United%20States&g=0100000US&tid=ACSDP1Y2019.DP05&hidePreview=true.
---------------------------------------------------------------------------

    Comment: A commenter stated that the rule would allow for the
sunset of regulations that merely implement statutory requirements,
such as Indian preference. The commenter cited as examples 42 CFR
136.41-43, 42 CFR 121, 42 CFR 136a.41-43, all of which, the commenter
stated, are mandated by 25 U.S.C. 5117.
    Response: The Department respectfully disagrees. This final rule
exempts from the Assessment and Review requirement ``Sections whose
expiration pursuant to this section would violate any other Federal
law.'' See Section [XX](g). In any event, the Department is not
convinced the statutory provision cited by the commenter mandates the
cited regulations. There is no obligation imposed on HHS in 25 U.S.C.
5117 to prescribe any particular regulations on Indian preference.
Rather, section 5117 provides that ``any employee entitled to Indian
preference who is within a retention category established under
regulations prescribed under such subsection to provide due effect to
military preference shall be entitled to be retained in preference to
other employees not entitled to Indian preference who are within such
retention category.'' Neither 25 U.S.C. 5117 nor 25 U.S.C. 5116 (which
is referenced in 25 U.S.C. 5117) are cited as statutory authorities for
the regulations cited by the commenter.
    Comment: A few commenters stated that agencies (including HHS) have
long ignored the retrospective review mandate of the RFA and have
failed to perform such reviews. One reason for this, according to the
commenters, is that the RFA does not create incentives for federal
agencies to review their regulations. These commenters stated that this
final rule would solve that problem by providing a clear incentive for
agencies within HHS to review their regulations to prevent their
automatic expiration. Commenters stated that without such a
consequence, agencies will continue to fail to conduct retrospective
reviews of their regulations.
    Response: The Department cannot speak for other federal agencies
and would not state that the Department has completely ignored
retrospective review. But the Department would agree that it has not
performed reviews as often as Congress intended. The Department agrees
that this final rule will address this problem by providing an
incentive to perform retrospective reviews.
    Comment: A few commenters stated that the Department failed to
analyze the potential costs of rescinding regulations, and only focuses
on the costs of conducting voluntary Assessments and Reviews. A few
commenters stated that HHS did not assess the potential forgone
benefits of expired regulations.
    Response: This is addressed in the regulatory impact analysis for
this final rule.

    Comment: A few commenters stated that the Department should
consider doing a regulatory impact analysis when reviewing rulemakings
that predate the Regulatory Flexibility Act and have a significant
economic impact upon a substantial number of small entities
(``SEISNOSE''). These commenters also noted that conducting additional
regulatory impact analyses would impose an additional cost to the
Department, which it should account for if it chooses to do additional
analysis on Pre-RFA rulemakings.
    Response: As explained in the proposed rule, more resources will be
required to review regulations that predate the RFA.\127\ The
regulatory impact analysis for this final rule accounts for the
additional resources required to conduct Reviews of rule makings that
predate the RFA. But the criteria listed in 5 U.S.C. 610 are the
criteria that Congress directed the Department to use when reviewing
regulations that predate the RFA. Therefore, for rule makings that
predate the RFA and have a SEISNOSE, this final rule requires that the
Review consider the factors listed in 5 U.S.C. 610, as well as whether
the component Sections within those rulemakings comply with applicable
law.
---------------------------------------------------------------------------

    \127\ See 85 FR 70115 (``Of the 273 rulemakings subject to
Reviews in the first two years, the Department estimates roughly
16%, or 44, of those rulemakings were promulgated prior to the
requirement for prospective regulatory flexibility analyses. As
described further below, those 44 Reviews will require more
Department resources than the estimated 229 Reviews of rulemakings
promulgated after the prospective analysis requirement went into
effect'').
---------------------------------------------------------------------------

    Comment: A few commenters asked for clarification on whether a
regulation that is identified for amendment through the regulatory
review process set forth in this final rule would be prioritized over
new regulations the Department is promulgating.
    Response: In the scenario described by commenters, the Department
would aim to amend the referenced regulation and also promulgate new
regulations that the Department believes should be promulgated.
Experience shows the Department is able to amend existing regulations
and promulgate new ones at the same time.
    Comment: A few commenters asked if regulations that are sunset
because they were not Assessed or Reviewed by the deadline would have
to go through notice-and-comment rule making to be reissued if they
were otherwise unchanged. These commenters also asked how these
regulations would be prioritized by the Department.
    Response: As explained throughout the proposed rule (and this final
rule), the Department is committed to dedicating adequate resources to
timely Assess and Review its regulations. If a regulation did
automatically expire, though, the Department would be required to
undertake notice-and-comment rule making to reissue the regulation,
unless one of the exceptions to notice-and-comment rule making in 5
U.S.C. 553 applies.
    Furthermore, allowing for automatic reissuance of an expired
regulation threatens to undermine the efficacy of this final rule. If
there were no costs or obstacles to simply resurrecting an expired
regulation in its original, pre-expiration form, then there would be no
compelling incentive to timely Assess and Review Department
regulations.
    It is impossible to say at this point how the Department might
``prioritize'' re-issuance of expired regulations, without knowing
which regulation is at issue and what other competing priorities the
Department might have at the time. That said, the Department
anticipates it will prioritize re-issuance of expired regulations in
line with the public need for such regulation, balancing the same
considerations it always does in allocating its policy-making
resources. As noted above, the risk that important, ``priority''
regulations--those that meaningfully impact regulated entities--will
expire is mitigated by the fact that interested members of the public
can alert the Department to a needed Assessment or Review. Commenters
have also flagged regulations to review during the public comment
process on this rule.
    Comment: A few commenters stated that the Department should clarify
how it will reconcile or update applicable guidance documents
associated with rescinded regulations. If guidance documents remain in
existence or are not updated to account for the regulatory changes
resulting from the process established in this final rule, it could
lead to confusion for regulated entities. A few commenters asked for
clarification on whether the Department is considered to have Reviewed
a regulation if the Department issues a guidance document on that
particular regulation.
    Response: The Department may not issue any guidance document that
establishes a legal obligation that is not reflected in a duly enacted
statute or in a regulation lawfully promulgated under a statute. The
Department may not use any guidance document for purposes of requiring
a person or entity outside the Department to take any action, or
refrain from taking any action, beyond what is required by the terms of
an applicable statute or regulation.\128\ Therefore, any guidance
document based on an expired regulation has no effect. If a guidance
document addresses expired regulations as well as regulations still in
effect, the Department would seek to expeditiously revise the guidance
document.
---------------------------------------------------------------------------

    \128\ Department of Health and Human Services Good Guidance
Practices, 85 FR 78785 (Dec. 7, 2020).
---------------------------------------------------------------------------

    The Department is not considered to have Reviewed a Section simply
because the Department issues a guidance document concerning that
particular Section. The Department is only considered to have Reviewed
a Section if, with respect to the Section, the Department has followed
the procedures specified in section [XX](f) of this final rule. The
Department must publish the results of the Review, including the full
underlying analyses and data used to support the results (subject to
any applicable privilege, protections for confidential business
information, or explicit legal prohibition on disclosure), in the
Federal Register.
    Comment: A few commenters asked how other enforcement agencies,
such as the Office of the Inspector General or the Department of
Justice, and federal healthcare program contractors, would be affected
by the proposed rule. Commenters stated that a lack of coordination
between agencies and other entities with equities in an expired
regulation could lead to different and possibly contrary conclusions
about how to proceed. These commenters also stated that this could lead
to conflicting requirements, resulting in different rules in different
jurisdictions. Commenters asked the Department to clarify how corporate
compliance programs should advise their organizations if a regulation
expires.
    Response: This final rule applies to the HHS Office of Inspector
General (OIG), which is a component of HHS, although certain
regulations for which OIG has enforcement responsibility are exempt,
such as 42 CFR 1001.952. For regulations that were issued in
coordination with another Agency, that function in concert with another
Agency's regulations, or that have a specific, direct impact on
regulations issued by another Federal agency, the Department shall
consult with that other Agency when undertaking the Assessment or
Review, and consider the other Agency's views when considering the
factors described in section [XX](d). In addition, when Assessing or
Reviewing regulations that require review and approval by the Attorney
General under Exec. Order No. 12250 of

Nov. 2, 1980, 45 FR 72995 (Nov. 4, 1980), the Department will consult
with the Department of Justice (DOJ) and provide a draft of the
findings to DOJ well in advance of the Assessment or Review deadline so
DOJ can review and approve prior to the publication of the findings. If
an HHS regulation is amended, rescinded, or expires, no other
governmental body may take a different view of the regulation's legal
effect.
    Regarding how corporate compliance programs should advise their
organizations if a regulation expires, an HHS regulation that expires
no longer has legal effect and cannot be enforced by any governmental
body against a regulated entity.
    Comment: One commenter stated that HHS observes that the proposed
rule's review requirements ``do not impose new burdens . . . if
incomplete compliance [with the Regulatory Flexibility Act] is not
accounted for in the regulatory baseline.'' \129\ But HHS's entire
rationale for the proposed pule, according to the commenter, is that
incomplete compliance with existing review requirements is and will
continue to be a problem under the regulatory baseline (i.e., absent
the proposed rule).
---------------------------------------------------------------------------

    \129\ 85 FR 70112.
---------------------------------------------------------------------------

    Response: HHS maintains that the proposed rule, as well as this
final rule, does not impose new burdens if incomplete compliance with
the RFA is not accounted for in the regulatory baseline. HHS recognizes
that, after implementation of this final rule, the Department's
Assessments and Reviews will likely result in an additional resource
expenditure beyond what would occur absent promulgation of this final
rule. This was analyzed in the Regulatory Impact Analysis of the
proposed rule and in more detail (largely due to comments received) in
the Regulatory Impact Analysis of this final rule. It is worth noting,
though, that the burdens resulting from this final rule are burdens
that Congress already intended for the Department to bear.
    Comment: A few commenters stated that the Department does not cite
any reason why a regulatory review should be triggered by the age of a
regulation or why ten years should be the trigger. Some commenters
stated that a regulatory review could also be based on the subject
matter of the regulation, its economic impact, or the number of people
it affects. Other commenters pointed out that the Department also could
have used a different time period other than ten years to conduct its
reviews. Commenters point to the Department's citation to a number of
foreign and sub-national entities that mandate the reviews of
regulations after five or seven years. These commenters stated that
since there are other options for the frequency of regulatory review,
the proposal to have such rules automatically expire after ten years is
arbitrary and capricious.
    Response: HHS respectfully disagrees. The proposed rule explained
why the Department chose ten years:

    The Department proposes to perform the Assessment and (if
required) the Review on each Regulation every ten years. Some states
provide that, unless readopted or re-reviewed, their regulations
expire in seven years,\130\ while at least one state uses a ten-year
time period.\131\ The Department proposes to perform the Assessment
and (if required) the Review every ten years, because ten years is
the period listed in 5 U.S.C. 610. The Department has many
Regulations, some of which are complex, so having to perform the
Assessment and Review more than once every ten years could unduly
burden the Department and increase the likelihood that a Regulation
inadvertently expires because it is not Assessed or Reviewed.\132\
---------------------------------------------------------------------------

    \130\ See, e.g., N.J. Admin. Code Sec.  1:30-6.4 (2020)
(regulations expire every seven years unless readopted, subject to
certain exceptions); Ind. Code 4-22-2.5-2 (imposing seven-year
expiration date on regulations unless readopted).
    \131\ N.C. Gen. Stat. 150B-21.3A.
    \132\ 85 FR at 70106.

    This rationale still holds. In this final rule, the Department
decides to Review rules that have a SEISNOSE, because those are the
rules that the RFA directed HHS to review.
    Comment: A few commenters stated that the proposed rule interferes
with the RFA's procedure for regulatory review. 5 U.S.C. 610-611. These
commenters note that those sections require agencies to publish plans
for regulatory review, provide a schedule for revision that varies by
agency, give agency heads the right to delay review for one-year
periods, up to a maximum of five years, identify multiple factors that
must be considered in reviewing each rule, prescribe the terms of
public notice via the Federal Register, and specify judicial appeal
procedures and criteria, including standing rights and remedies. These
commenters also stated that the Department's proposed rule would scrap
that process and replace it with a default of across-the-board
regulatory repeal in case of inaction, without recourse, using a
completely different system of judicial review premised on the
underlying APA, rather than the RFA. Commenters stated that this would
be a usurpation of Congress's role, and would raise constitutional
questions involving balance of power between the branches. According to
commenters, the Department must address this issue or else promulgating
this final rule would be arbitrary and capricious.
    Response: HHS respectfully disagrees. This final rule is consistent
with the RFA's requirement to publish a plan for periodic review--it is
such a plan, and the RFA does not prohibit the Department from
including expiration dates in its regulations. The Review process
considers the five factors enumerated in the RFA. See 5 U.S.C. 610(b).
This final rule requires publication in the Federal Register of the
results of Assessments and Reviews under section [XX](f). This final
rule does not supplant or purport to foreclose any available judicial
review under 5 U.S.C. 611. And with respect to section 610 compliance,
the RFA's judicial-review provisions expressly cross-reference the
broader APA judicial-review provisions. See 5 U.S.C. 611(a)(1) (``For
any rule subject to this chapter, a small entity that is adversely
affected or aggrieved by final agency action is entitled to judicial
review of agency compliance with the requirements of sections 601, 604,
605(b), 608(b), and 610 in accordance with chapter 7.'') (emphasis
added). Because this rule is consistent with the RFA, it does not usurp
Congress's role or raise constitutional separation-of-power concerns.
To the contrary, it implements Congressional intent for periodic review
of regulations. Section II.F of this final rule further addresses the
commenters' concerns in discussing how the Department will
operationalize this final rule.
    Comment: Several commenters stated that the proposed rule violates
the RFA's intent as expressed by Congress. In passing the RFA, Congress
expressly made the following finding: ``the practice of treating all
regulated businesses, organizations, and governmental jurisdictions as
equivalent may lead to inefficient use of regulatory agency resources,
enforcement problems and, in some cases, to actions inconsistent with
the legislative intent of health, safety, environmental and economic
welfare legislation.'' \133\ These commenters stated that the proposed
rule departs from the Congressional intent in passing the RFA because
the proposed rule would subject every regulation to mandatory review as
well as repeal by default. In this way, the proposed rule ``treats all
regulated businesses, organizations, and governmental jurisdictions as
equivalent'' by terminating all

regulations, without considering the unique set of stakeholders
affected by each regulation.
---------------------------------------------------------------------------

    \133\ Public Law 96-354, 94 Stat. 1164, 1164 (1980) (as amended
1996).
---------------------------------------------------------------------------

    Response: HHS respectfully disagrees with these comments because
these commenters fundamentally misunderstand the operation of this
final rule, as well as the Congressional finding they quote. This final
rule does not repeal regulations by default. As explained in this final
rule, the Department intends to timely complete the necessary
Assessments and Reviews and has built in safeguards to mitigate the
risk of inadvertent expiration. Under this final rule, the Department
must Assess which of its rule makings have a significant economic
impact upon a substantial number of small entities, and then perform
the more robust Reviews on those rule makings. Therefore, the
Department is paying special attention to those regulations which have
a significant economic impact upon a substantial number of small
entities. As explained in the proposed rule, the Department cannot know
which regulations currently have a SEISNOSE without Assessing its
regulations.\134\ This process is consistent with the RFA, which
instructs agencies to review ``the rules issued by the agency which
have or will have a significant economic impact upon a substantial
number of small entities.''
---------------------------------------------------------------------------

    \134\ See 85 FR 70107.
---------------------------------------------------------------------------

    Reviews consider the five factors expressly included within the
RFA, as well as an additional factor that is indisputably beneficial
and appropriate: ``Whether the rulemaking complies with applicable
law.'' See Section [XX](d). Subjecting regulations with a SEISNOSE to
Review does not ``treat all regulated businesses, organizations, and
governmental jurisdictions as equivalent'' because the findings of the
Review will be tailored to the regulation.\135\
---------------------------------------------------------------------------

    \135\ Under the commenters' argument, the fact that the RFA sets
forth five factors to be considered (see 5 U.S.C. 610(b)) would also
supposedly be inconsistent with Congressional intent.
---------------------------------------------------------------------------

    The commenters also quote the language from the Congressional
findings and declaration of purpose out of context. Congress was
clearly focused on agencies ignoring the distinction between ``large
scale entities'' and small entities.\136\ Given that this rule closely
tracks the RFA's goal of minimizing undue burden on small entities, it
aligns with the Congressional intent behind the RFA.
---------------------------------------------------------------------------

    \136\ See Public Law 96-354, 94 Stat. 1164, 1164 (1980) (as
amended 1996), Sec. 2(a)(2) (``laws and regulations designed for
application to large scale entities have been applied uniformly to
small businesses, small organizations, and small governmental
jurisdictions even though the problems that gave rise to government
action may not have been caused by those smaller entities''); Sec.
2(b) (``It is the purpose of this Act to establish as a principle of
regulatory issuance that agencies shall endeavor, consistent with
the objectives of the rule and of applicable statutes, to fit
regulatory and informational requirements to the scale of the
businesses, organizations, and governmental jurisdictions subject to
regulation.'').
---------------------------------------------------------------------------

    Comment: A commenter stated that automatic expiration of Department
regulations could frustrate the RFA's purpose by inappropriately
sunsetting rules that increase economic benefits for small entities.
This commenter stated that the proposed rule does not sufficiently
address this concern. This commenter also stated that the proposed rule
undermines congressional intent because the proposed rule does not
consider that the Department may be impeding its ability to conduct
reviews under the RFA by instituting added procedural requirements and
broadly applicable regulatory sunsets. This commenter further stated
that expiration dates are particularly contrary to effectuating RFA
compliance because the Department will need to prioritize assessing
rules without any impact on small entities simply due to their imminent
expiration, rather than using Department resources efficiently to focus
on rules requiring the Department's review under the RFA.
    Response: The Department respectfully disagrees. The RFA calls on
the Department to periodically review regulations that have a
significant economic impact upon a substantial number of small
entities. This final rule intends to increase the number of such
reviews that occur, and directs the Department to review using the
criteria specified in 5 U.S.C. 610(b) (plus whether the rule making
complies with applicable law). As for Assessing regulations not
previously determined to have a SEISNOSE, implicit in 5 U.S.C. 610 is
the requirement to determine which regulations have a SEISNOSE.\137\
Without performing the Assessment, the Department may not know which
regulations have or will have a significant economic impact upon a
substantial number of small entities. Due to changed circumstances, a
regulation that did not have such an impact at the time it was
promulgated may now have such an impact.\138\ The Department does not
intend for any regulations to inadvertently sunset, and it is unlikely
that any regulations with significant benefits would slip through the
cracks. The regulatory impact analysis addresses this in more detail.
---------------------------------------------------------------------------

    \137\ 85 FR 70112.
    \138\ 85 FR 70107.
---------------------------------------------------------------------------

    Comment: A few commenters stated that beyond simply cutting
regulatory burdens, the scheduled regulatory review of existing HHS
regulations will afford HHS the opportunity to keep regulations up to
date with modern trends. These commenters noted that not only will this
rule establish an opportunity for the Department to terminate obsolete
regulations that are no longer fit for purpose or that are judged to be
ineffective, but it will also give HHS and the public a reliable
framework and a set of tools to continually keep regulations up to date
with evolving circumstances.
    Response: The Department agrees with these comments and emphasizes
that the benefits of retrospective review--some of which are cited by
these commenters--are substantial. As the proposed rule noted,
Professor Cass Sunstein, who served as OIRA Administrator from 2009 to
2012, has observed that ``the requirement of retrospective analysis,''
if ``firmly institutionalized,'' ``would count as the most important
structural change in regulatory policy since the original requirement
of prospective analysis during the Reagan Administration.'' \139\
---------------------------------------------------------------------------

    \139\ Cass R. Sunstein, The Regulatory Lookback, 94 B.U. L. Rev.
579, 584 (2014).
---------------------------------------------------------------------------

    Comment: A few commenters stated that regulatory review does not
create as much benefit to regulated entities as the proposed rule
suggests, because many of the costs of regulatory compliance have
already been factored into the cost of doing business, and are
essentially evanescent over time.
    Response: While some costs of regulatory compliance may have been
factored into the cost of doing business, this comment overlooks many
of the benefits of retrospective review. For example, economic,
technological, or legal changes can make a regulation obsolete over
time. Retrospective review is widely acknowledged to be beneficial by
scholars across the ideological spectrum, many of whom are cited in the
proposed and this final rule.
    Comment: A commenter asked for greater detail on the Assessment and
Review process, especially planning of what is to be included and
excluded in the retrospective review process. The commenter also asked
for greater explanation of how the Department will provide notification
of what rules have been Assessed. The commenter also asked what would
happen if a part of a rule was reviewed but not other parts of it.

    Response: Section II.F of this final rule's preamble provides
greater detail on the Assessment and Review process and the
Department's planning for Assessments and Reviews. Examples of Section
610 reviews conducted by the EPA are instructive on how the Department
anticipates the five factors set forth in 5 U.S.C. 610(b) will be
analyzed.\140\ The results of all Assessments and Reviews conducted in
a calendar year will be published in a single document in the Federal
Register during that calendar year. The Department also intends to
place the results of an Assessment or Review in the docket for the rule
on Regulations.gov. Lastly, this final rule defines ``Assess'' as a
determination as to whether the ``Sections issued as part of the same
rulemaking (and any amendments or additions that may have been added
thereafter)'' currently have a significant economic impact upon a
substantial number of small entities. This final rule defines
``Review'' as a process the purpose of which is to determine whether
``Sections that were issued as part of the same rulemaking (and any
amendments or additions that may have been issued thereafter)'' should
be continued without change, amended, or rescinded. Thus, while
Sections are what expire if they are not timely Assessed or Reviewed,
the Department should be Assessing or Reviewing all Sections that were
part of the same rulemaking (and any amendments or additions that may
have been issued thereafter), not just some of them.
---------------------------------------------------------------------------

    \140\ See Results of EPA's Section 610 Review of the Final Rule
for Control of Emissions of Air Pollution from Nonroad Diesel
Engines and Fuel, EPA Off. of Transp. & Quality (Sept. 2014),
https://www.regulations.gov/document?D=EPA-HQ-OAR-2013-0642-0003;
Regulatory Flexibility Act Section 610 Review of the National
Pollutant Discharge Elimination System (NPDES) Permit Regulation and
Effluent Limitation Guidelines and Standards for Concentrated Animal
Feeding Operations (CAFOs), EPA Off. of Water (June 3, 2014),
https://www.regulations.gov/document?D=EPA-HQ-OW-2012-0813-0216;
Results of EPA's Section 610 Review of the Final Rule for Lead;
Renovation, Repair, and Painting Program, EPA Off. of Pollution
Prevention and Toxics (Apr. (April 2018), https://www.regulations.gov/document?D=EPA-HQ-OPPT-2016-0126-0019.
---------------------------------------------------------------------------

    Comment: One commenter stated that it previously advocated for the
review and modernization of some of the Department's regulations
covering Medicare health and safety standards. For example, according
to the commenter, the Medicare Conditions of Participation regulations
for psychiatric hospitals do not align their requirements with modern
psychiatric care. However, the commenter stated that no substantive
revisions to the provisions have occurred since the requirements for
psychiatric hospitals were first implemented, meaning that a
comprehensive review of these regulations has not occurred for at least
40 years, when psychiatric care was delivered much differently. This
commenter stated that this is a clear example of why regular regulatory
reviews are necessary.
    Response: The Department thanks the commenter for identifying these
regulations. The Department intends to timely Assess and (if necessary)
Review these regulations. If the Assessments and Reviews suggest these
regulations should be amended or rescinded, the Department will
commence rulemaking to amend or rescind them.
    Comment: A few commenters applauded the Department for continuing
the bipartisan work on regulatory review to ensure federal agencies are
continually held accountable to taxpayers and that regulations remain
relevant and updated to innovation and changes in market conditions.
The commenters also asked when the planning and drafting of the
proposed rule began, any recent regulatory actions that would
demonstrate the effects that regulatory reviews, suspensions, or
updates can have on the health care industry, or the economy more
broadly, and a list of Department regulations suspended during the
pandemic.
    Response: The Department thanks the commenters for the first part
of this comment. Second, for a non-exhaustive list of 382 enforcement
discretion announcements, waivers or changes to regulations, agency
guidance materials, or compliance obligations made to respond to the
COVID-19 pandemic and its impact on the healthcare industry, see
Regulatory Relief to Support Economic Recovery; Request for Information
(RFI), 85 FR 75720 (Nov. 25, 2020) at Attachment A. The planning and
drafting of the proposed rule is subject to the deliberative process
privilege, but evolved out of the 2019 regulatory streamlining analysis
discussed in the proposed rule.
Technical Legal Comments
    Comment: A large number of commenters stated that the proposed rule
would violate the Administrative Procedure Act (APA), because it would
allow the Department to revise or rescind thousands of regulations at
one time instead of conducting notice and comment rulemaking on each
existing individual rule it chooses to repeal. Some of these commenters
also mentioned that the APA requires agencies to use substantially the
same process to repeal a rule as they used to promulgate a rule, so a
process that allows for automatic expiration of a rule would not meet
this statutory requirement. A commenter stated that ``Revocation
constitutes a reversal of the agency's former views as to the proper
course'' and ``[w]hile the agency is entitled to change its view on [a
matter], it is obligated to explain its reasons for doing so. . . .
[A]n agency changing its course by rescinding a rule is obligated to
supply a reasoned analysis for the change'' and ``[g]enerally, one
aspect of that explanation would be a justification for rescinding the
regulation . . .'' (quoting Motor Vehicles Mfrs. Ass'n of U.S., Inc. v.
State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 41, 42, 52, 56 (1983)).
Commenters stated that this rule would be arbitrary and capricious on
these grounds. One commenter stated that if the Department does not
perform an affirmative action to prevent expiration of a regulation,
the Department would fail to articulate a satisfactory explanation for
its expiration, making the agency action arbitrary and capricious.
    Response: This final rule complies with the APA. The APA generally
requires, with certain exceptions, notice and comment prior to
finalizing a ``rule making,'' 5 U.S.C. 553, which is defined as
``formulating, amending, or repealing a rule.'' 551(5). See Motor
Vehicles Mfrs. Ass'n of U.S. v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 41 (1983) (``We believe that the recession or modification of
an [agency rule] is subject to the same test.''). The APA has already
``established the maximum procedural requirements which Congress was
willing to have the courts impose upon agencies in conducting
rulemaking procedures.'' Vt. Yankee Nuclear Power Corp. v. Nat. Res.
Def. Council, Inc., 435 U.S. 519, 524 (1978). Neither courts nor
regulated entities may ``impose upon [an] agency its own notion of
which procedures are `best' or most likely to further some vague,
undefined public good.'' Id. at 549.
    The Department agrees with commenters who stated the APA generally
requires agencies to use substantially the same process to amend or
repeal a rule as they used to promulgate a rule. The Department is
complying with this requirement. See Clean Air Council v. Pruitt, 862
F.3d 1, 9 (2017) (an agency can amend or revoke a legislative rule
through notice-and-comment rulemaking). In this rule making, the
Department has gone through notice-and-comment rule making to amend its
regulations by establishing conditions under which the regulations will
either be Assessed and/

or Reviewed or expire. This is permissible. The Department is going
through notice-and-comment rule making to amend its regulations to
apply expiration dates unless certain conditions are satisfied.
Agencies already promulgate regulations that expire upon the
satisfaction of a future event or non-event.\141\ Nothing in the APA
forecloses agencies from including conditional expirations dates in
regulations. It would call into question many rules--and be extremely
disruptive--if courts held that conditional expiration dates violate
the APA.
---------------------------------------------------------------------------

    \141\ See, e.g., Control of Communicable Diseases; Foreign
Quarantine 85 FR 7874, 7874 (Feb. 12, 2020) (providing that, unless
extended, interim final rule ``will cease to be in effect on the
earlier of (1) the date that is two incubation periods after the
last known case of 2019-nCoV, or (2) when the Secretary determines
there is no longer a need for this interim final rule''); Medicare
and Medicaid Programs, Clinical Laboratory Improvement Amendments
(CLIA), and Patient Protection and Affordable Care Act; Additional
Policy and Regulatory Revisions in Response to the COVID-19 Public
Health Emergency, 85 FR 54820, 54820 (Sept. 2, 2020) (providing that
an interim final rule applies ``for the duration of the [public
health emergency] for COVID-19''); U.S. Dep't of Transp., Final
Regulatory Impact Analysis: Amendment to Federal Motor Vehicle
Safety Standard 208 Passenger Car Front Seat Occupant Protection, at
XII-35 (July 11, 1984), http://www-nrd.nhtsa.dot.gov/Pubs/806572.pdf
(explaining that ``[i]f mandatory use laws are passed that will
cover 67 percent of the population effective September 1, 1989, the
rule will be rescinded'').
---------------------------------------------------------------------------

    The Department also rejects the argument that it cannot revise many
regulations in one rule making, but instead must conduct notice-and-
comment rule making on each individual regulation it seeks to amend or
rescind. The APA does not include such a requirement. When 5 U.S.C.
551(5) defines ``rule making'' as an ``agency process for formulating,
amending, or repealing a rule'' (emphasis added), that includes
formulating, amending, or repealing ``rules.'' See 1 U.S.C. 1 (``In
determining the meaning of any Act of Congress, unless the context
indicates otherwise--words importing the singular include and apply to
several persons, parties, or things''). Agencies can--and often do--
issue one rule that applies to many other agency rules, rather than
amending or rescinding each affected regulation individually. To take
one example, in 2008 the Department revised the definition of
``entity'' at 42 CFR 411.351. See 73 FR 48434, 48751 (Aug. 19, 2008).
The revised definition had the effect of changing the meaning of
``entity'' each time it was used in 42 CFR part 411, subpart J. It
would be burdensome to specify the meaning of ``entity'' each time it
appears in subpart J, so the Department issued one definition that
broadly applied to all sections of subpart J. There are many other
examples where an Agency issues a regulation that applies to, amends,
rescinds, or supersedes many other regulations.\142\ This avoids an
unnecessarily cumbersome process. A court ruling that Agencies must
amend each individual regulation would call into question large numbers
of Agency regulations and impose substantial burdens on agencies (and
the Office of the Federal Register, which would be required to print
the same text over and over) when promulgating future regulations. In
addition, the Department will consider each individual regulation when
conducting Assessments and (if needed) Reviews.
---------------------------------------------------------------------------

    \142\ See, e.g., 21 CFR 1.1(b) (``the definitions and
interpretations of terms contained in sections 201 and 900 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321 and 387) shall
be applicable also to such terms when used in regulations
promulgated under that act'').''); 7 CFR 786.113 (``Notwithstanding
any other regulation, interest will be due from the date of the
disbursement to the producer or other recipient of the funds''); 40
CFR 455.21 (``Notwithstanding any other regulation, process
wastewater flow for the purposes of this subpart does not include
wastewaters from the production of intermediate chemicals''); 7 CFR
3430.1 (``In cases where regulations of this part conflict with
existing regulations of NIFA in Title 7 (i.e., 7 CFR parts 3400
through 3499) of the Code of Federal Regulations, regulations of
this part shall supersede''); 45 CFR 611.12 (``All regulations . . .
heretofore issued by any officer of the Foundation which impose
requirements designed to prohibit any discrimination against
individuals on the ground of race, color, or national origin under
any program to which this part applies, and which authorize the
suspension or termination of or refusal to grant or to continue
Federal financial assistance to any applicant for or recipient of
such assistance for failure to comply with such requirements, are
hereby superseded to the extent that such discrimination is
prohibited by this part,'' with certain exceptions).
    .
---------------------------------------------------------------------------

    Moreover, in this rule making the Department considered each
individual Department regulation, and, as discussed further, decided to
exempt certain regulations from this final rule. The Department
concluded that the benefits of retrospective review, and need to more
strongly incentivize it, justified applying this final rule to the
Department's remaining regulations. In this rule making, the Department
is considering the important factors. It issues this final rule
because, for the reasons described herein, the Department believes the
benefits of retrospective review, and the need to strongly incentivize
it, are so great that the risk of a regulation inadvertently expiring
is justified by the benefit of institutionalizing retrospective review
in this manner. Forty years of experience since the RFA's enactment;
the decades since relevant Executive Orders were enacted; and other
Federal government efforts to spur the Department to conduct more
retrospective reviews indicate that, absent such a pushing mechanism,
the Department will not conduct as many retrospective reviews as
desired. Indeed, this final rule, rather than being a revocation of
prior regulations, will enhance the fulfillment of the existing
policies that led to the Department's regulations subject to this final
rule.
    Comment: Many commenters stated that the proposed rule could create
legal uncertainty regarding the validity and enforceability of
regulations that the Department, after conducting a Review, determines
should be amended or rescinded. Commenters stated this could have
negative effects on the HHS programs, the healthcare industry, and
states which administer Medicaid and CHIP. Some of these commenters
stated that HHS admits that enforcing a Regulation deemed to require
amendment or rescission in some cases could raise concerns about
whether such enforcement is arbitrary and capricious. Continuing to
enforce the regulation (or portions thereof) could arguably run counter
to the evidence before the agency. However, these commenters stated
that, HHS provides no insight or explanation on how it would address
this conundrum.
    Response: The Department respectfully disagrees. The commenters'
concerns only apply where the Department has announced, after Review,
that a regulation should be amended or rescinded. Where that is the
case, the announced results will suggest what portions of the
regulation may need revision and the Department anticipates that
commenters will generally be able to participate in subsequent rule
making regarding amending or rescinding the regulation. The basis for
amendment or rescission will suggest the extent to which continued
enforcement in the interim is appropriate. That is why the proposed
rule states the Department would exercise enforcement discretion ``on a
case-by-case basis as appropriate.'' \143\ Consistent with Department
practice, the Department would announce if it is exercising enforcement
discretion to not enforce a regulation.
---------------------------------------------------------------------------

    \143\ 85 FR 70108.
---------------------------------------------------------------------------

    Comment: Several commenters stated that if Congress's intent was to
effectuate results similar to those in the proposed rule, it could have
included sunset provisions in its statutes. By not including sunsets in
its statutes, Congress must not have perceived a need for
Congressionally-directed

rulemaking to expire in the foreseeable future, or at least not
automatically.
    Response: HHS disagrees that Congress's choice to not include
automatic sunset provisions in its statutes undercuts or forecloses the
proposed rule. The RFA requires the Department to develop ``a plan for
the periodic review of the rules issued by the agency which have or
will have a'' SEISNOSE, but leaves the details of said plan to the
Department. 5 U.S.C. 610(a). The RFA demonstrates Congress's intent
that agencies conduct retrospective review, and the Department has
determined, for the reasons explained in the proposed rule, that sunset
provisions are a practical and effective way to ensure that
Congressional intent is honored. The commenters' position suggests it
is improper to take steps to effectuate Congressional intent if
Congress itself has not expressly legislated such steps--but, of
course, agencies frequently fill in the details of a statutory regime
implemented by Congress.
    Comment: One commenter stated that the proposed rule is misleading,
which thwarts public comment and violates the APA. This commenter
stated that it was misleading and irrational for HHS to suggest that it
is hypothetical whether any regulation would sunset under the rule,
because every regulation would sunset unless a timely Assessment or
Review occurs. This commenter suggested that the rule's description is
inadequate to meet the notice standard required by the APA. This
commenter reasoned that the Department's explanation of the proposed
rule and its reasoning did not provide the public with a meaningful
opportunity to participate in rulemaking through the submission of
comments, which violates the notice and comment requirement of the APA.
5 U.S.C. 553.
    Response: HHS respectfully disagrees. ``The APA requires that the
notice of proposed rulemaking contain `reference to the legal authority
under which the rule is proposed' and `either the terms or substance of
the proposed rule or a description of the subjects and issues
involved.' '' Little Sisters of the Poor Saints Peter and Paul Home v.
Pa., 140 S. Ct. 2367, 2384 (2020) (quoting 5 U.S.C. 553(b)(2)-(3)). The
notice of proposed rulemaking, which spanned 29 pages of the Federal
Register, did just that. The adequacy of the notice is demonstrated by
the fact that the agency received 532 comments--both critical and in
support of the proposed rule--that raised general issues as well as
commented on specific provisions of the proposed rule. The volume of
comments also demonstrates that the public had ample, meaningful
opportunity to participate in this rulemaking. There is nothing
misleading in the Department's statement that it intends to timely
Assess and (where required) Review its Sections. The proposed rule and
this final rule adequately explain the basis for this final rule.
    Comment: One commenter stated that the proposed rule is arbitrary
and capricious because the stated rationale of incentivizing
retrospective regulatory review is implausible. This commenter stated
that it is wrong to think that the Department is incentivized to Assess
or Review its regulations, because the Department may want its
regulations to expire. The commenter said that the penalty for failure
to review regulations actually falls on the regulated industry, not the
Department. The commenter stated that HHS unlawfully ignored the
predictable effects of the proposed rule on third parties.
    Response: HHS respectfully disagrees. The proposed rule amply
explained the benefits of retrospective review. It also explained why
sunset deadlines were necessary to incentivize retrospective review
(including, for example, the Department's experience with under-
utilization of retrospective review). This rationale is not implausible
because of the speculative possibility that the Department will
intentionally forego Assessments and Reviews. If the Department wanted
its regulations to expire, it would have conducted rulemakings to
rescind its regulations. The proposed rule and this final rule
demonstrate the Department's commitment to timely Assess and (where
necessary) Review its regulations. For example, the proposed rule and
final rule include (among other things) a clear-eyed analysis of the
resources and staff time required to conduct Assessments and Reviews,
and provide a mechanism for the public to request the Department to
conduct Assessments and Reviews on certain regulations.
    Comment: A few commenters stated that the proposed regulatory
review process is arbitrary and capricious, because it elevates the
need to undertake RFA reviews above any other purpose served by the
Department's regulations, which commenters state is disproportionate to
the problem at hand. These commenters state that since HHS estimates
that only 11% of its regulations have a SEISNOSE and would be subject
to the RFA, it is arbitrary and capricious to subject the other 89% of
regulations to possible rescission.
    Response: HHS respectfully disagrees. As explained in the proposed
rule and this final rule's preamble, there is a need for widespread
retrospective regulatory review. It is nearly impossible to see how a
satisfyingly comprehensive review could occur without a sunset
mechanism. The Department recognizes that in many cases the Department
had strong reasons for issuing its regulations. Those regulations were
motivated by important policy goals that the Department wishes to
achieve. This final rule will further these goals. The literature and
the Department's experience suggest that large numbers of regulations
are having impacts that, over time, differ from what was estimated at
the time the regulations were promulgated. Therefore, the Department
needs to conduct periodic reviews of its regulations to determine
whether the policy goals behind the regulations are in fact being
effected (and if amending those regulations could more effectively
further those goals). Therefore, this final rule is in fact an effort
to enhance both (1) the fulfillment of the existing policies that led
to the Department's regulations and (2) the Department's longstanding
desire to comply with the RFA and periodically review its regulations.
    As for conducting Assessments on many regulations, and not just
Reviewing those regulations previously determined to have a SEISNOSE,
the proposed rule explained that ``[w]ithout performing the Assessment,
the Department may not know which regulations have or will have a
significant economic impact upon a substantial number of small
entities. Due to changed circumstances, a regulation that did not have
such an impact at the time it was promulgated may now have such an
impact.'' \144\
---------------------------------------------------------------------------

    \144\ 85 FR 70107.
---------------------------------------------------------------------------

    Comment: One commenter stated that the Department may not finalize
the proposed rule without conducting a review under the National
Environmental Policy Act (NEPA) or considering how the proposed rule is
consistent with Executive Orders 13045 or 12898.
    This commenter stated that HHS violated its obligations under NEPA
because commenters believe the rule is a major federal action.
According to the commenter, the proposed rule stated that it ``will not
have a significant impact on the environment'' without providing
additional explanation.\145\ The commenter stated that the FDA's own
NEPA regulations require it to conduct at least an environmental
assessment before promulgating certain

regulations, and FDA cannot rescind those regulations without
conducting NEPA review. See 21 CFR 25.20.
---------------------------------------------------------------------------

    \145\ 85 FR 70118.
---------------------------------------------------------------------------

    This commenter also stated that the proposed rule does not
adequately consider Executive Orders 13045 or 12898. Executive Order
13045 imposes requirements on agencies to protect children from
environmental health risks and safety risks.\146\ The commenter stated
that because the Department did not mention Executive Order 13045 in
its proposed rule, it must have failed to consider it. Executive Order
12898 directs federal agencies to make environmental justice part of
their mission, and to identify and address the disproportionate
environmental and health effects of their activities.\147\ This
commenter expressed that HHS did not consider whether the proposed
sunset rule will cause ``disproportionately high and adverse human
health or environmental effects . . . on minority populations and low-
income populations'' \148\ even though the commenter believes there is
every reason to think that the sunset rule will cause such adverse
effects.
---------------------------------------------------------------------------

    \146\ Exec. Order No. 13045 of Apr. 21, 1997, 62 FR 19885 (Apr.
23, 1997) (E.O. 13045).
    \147\ Exec. Order No. 12898 of Feb. 11, 1994, 59 FR 7629 (Feb.
16, 1994) (E.O. 12898).
    \148\ Id.
---------------------------------------------------------------------------

    Response: HHS respectfully disagrees that further analysis under
NEPA, E.O. 12898 (``Federal Actions To Address Environmental Justice in
Minority Populations and Low-Income Populations''), and/or E.O. 13045
(``Protection of Children From Environmental Health Risks and Safety
Risks''), is required. The commenter's position is based on a
fundamental misunderstanding of how the final rule functions. As
explained in the notice of proposed rulemaking, this rule does not in
and of itself rescind any regulations; it provides that certain
regulations will expire if not Assessed and (if required) Reviewed by
certain dates.
    Thus, there is no basis to say that this final rule itself
``significantly affect[s] the quality of the human environment,'' 42
U.S.C. 4332(C); may cause ``disproportionately high and adverse human
health or environmental effects . . . on minority populations and low-
income populations,'' E.O. 12898, Sec. 1-101; or ``concern[s] an
environmental health risk or safety risk that an agency has reason to
believe may disproportionately affect children,'' E.O. 13045 Sec. 2-
202(b).\149\
---------------------------------------------------------------------------

    \149\ See also 85 FR 70118 (``HHS has determined that the
proposed rule will not have a significant impact on the
environment.'').
---------------------------------------------------------------------------

    The commenter says an environmental assessment may be necessary,
including consideration of alternatives as required by section
102(2)(E) of NEPA, 40 CFR 1501.5(c)(2), if it is unclear whether the
rule will significantly affect the environment. But it is clear that
this rule alone does not have a significant environmental impact. Any
rescissions or amendments pursuant to Assessments and Reviews will be
effected through notice-and-comment rulemaking independent of this rule
and include any required environmental (and other) analyses. In any
event, the Department adequately explained the alternatives it
considered in its proposed rule,\150\ as well as in the regulatory
impact analysis for this final rule.
---------------------------------------------------------------------------

    \150\ See 85 FR 70116-17.
---------------------------------------------------------------------------

    Comment: A few commenters stated that HHS mistakenly exempts the
proposed rule from the regulatory review process it creates. The
proposed rule states that it ``cannot, absent other actions, directly
impose on the public costs that exceed benefits . . . [o]nly the
failure to perform an Assessment or Review in the future could
theoretically impose on the public costs that exceed benefits.'' \151\
These commenters stated that it was a mistake for HHS to assume that
the proposed rule will not ``directly impose on the public costs that
exceed benefits'' because costs would be imposed on the public unless
Assessment or Review of Regulations take place. These commenters took
the position that the Department's regulations would expire by default,
and that expiration would impose a cost that would exceed benefits.
---------------------------------------------------------------------------

    \151\ 85 FR 70109.
---------------------------------------------------------------------------

    Response: HHS respectfully disagrees. This final rule would not
become obsolete due to economic, technological, or legal changes the
way that many other rules can. For the reasons discussed herein, the
Department believes the process set forth in this final rule will
enable the Department to Assess and (where required) Review its
regulations. It is a mistake, and bereft of evidence, to assume that
the Department's regulations would expire by default.
    Comment: Several commenters stated that the Department did not
adequately explain its reasoning for the proposed rule. Some of these
commenters stated that HHS did not acknowledge the facts and
circumstances that motivated the initial promulgation of its
regulations, nor did HHS discuss in the proposed rule the serious
reliance interests that have been created by some of these regulations.
Commenters asserted that the Department claims that it ``is considering
the important factors''--without articulating what those factors are--
and asserts that it ``believes the benefits of retrospective review,
and the need to strongly incentivize it, are so great that the risk of
a Regulation inadvertently expiring is outweighed by the benefit of
institutionalizing retrospective review in this manner.'' \152\ A few
commenters asked HHS to identify the regulations that are vulnerable to
rescission under the rule, and to describe the nature and magnitude of
the harm that might result from their expiration.
---------------------------------------------------------------------------

    \152\ 85 FR 70106.
---------------------------------------------------------------------------

    Response: The Department believes the proposed rule adequately
explained the facts and circumstances that motivated issuing the
proposed rule, and adequately showed that the Department considered the
relevant factors. The same is true for the preamble to this final rule,
which provides additional explanation for why the Department is issuing
this final rule and the factors it considered. The Department
recognizes that in many cases the Department had strong reasons for
issuing its regulations. Examples of such motivations might include
enhancing food safety,\153\ increasing access to health insurance,\154\
or increasing the incentive for Temporary Assistance for Needy Families
recipients to work.\155\ These are all important policy goals that the
Department wishes to achieve. This final rule is intended to further
these goals, as well as the other goals motivating the Department's
regulations. The literature and the Department's experience suggest
that large numbers of regulations are having impacts that, over time,
differ from what was estimated at the time the regulations were
promulgated. Therefore, the Department needs to conduct periodic
reviews of its regulations to determine whether the policy goals behind
the regulations are in fact being effected (and if amending those
regulations could more effectively further those goals). Outside of the
exempted regulations, no particular regulations are more ``vulnerable
to rescission'' than others under this final rule. This final rule is
agnostic as to all Department regulations. They must all be Assessed
and, if they have a SEISNOSE, Reviewed using the criteria specified in
section [XX](d).
---------------------------------------------------------------------------

    \153\ E.g., 21 CFR part 112.
    \154\ E.g., 45 CFR part 147.
    \155\ 45 CFR part 261.

---------------------------------------------------------------------------

Comments on the Statutory Authority for This Final Rule
    Comment: Several commenters stated that the Department does not
have the authority to propose automatic expiration of its regulations.
Some commenters stated that HHS fails to explain how Congress's grants
of authority to the Department to ``promulgate,'' 21 U.S.C. 371(a), to
``make and publish,'' 42 U.S.C. 1302(a), or to ``prescribe,'' 42 U.S.C.
1395hh(a), regulations also give it the authority to rescind those
regulations, with that rescission subject to future reversal at the
Department's discretion. Other commenters stated that the proposed rule
not only falls outside these grants of rulemaking authority, but
squarely contradicts Congress's instructions that HHS ``shall''
promulgate certain regulations. E.g., 21 U.S.C. 371, 42 U.S.C.
1395hh(a). Some commenters cited to section 1102 of the Social Security
Act, which directs the Secretary of HHS to issue regulations ``not
inconsistent with this Act'' to implement the Medicaid and CHIP
programs but does not provide specific statutory authority for the
Secretary to write automatic expiration dates into regulations.
    Response: The Department respectfully disagrees. As explained in
the proposed rule, the statutory authorities supporting this rule
making are the statutory authorities for the Department's existing
regulations.\156\ Moreover, the Department believes that the relevant
portions of the proposed rule, as finalized herein, are fully
consistent with 42 U.S.C. 1302(a). Indeed, it specifically cited this
provision as one source of statutory authority for promulgating the
proposed rule (85 FR at 70103), and does so in this final rule. The
commenters' position is incorrect for multiple reasons. First, the
commenters' assertion seems to suggest that any action by the
Department to repeal or amend Medicaid or CHIP regulations, by the mere
act of amendment or rescission, is ``inconsistent'' with those
programs. That position is untenable.\157\ In fact, this final rule is
the promulgation of a regulation that will contribute to ``the
efficient administration of '' the Department's functions under the
Social Security Act, because the Reviews called for by this final rule
will take into account both the continued need for particular
regulations, as well as whether the burden of those regulations on
small entities can be minimized (among several other factors that will
enhance efficiency, such as the complexity of the Regulation or whether
it is duplicative). For the same reasons, this final rule is the
promulgation of a regulation for ``the efficient enforcement'' of the
Federal Food Drug, and Cosmetic Act and necessary to carry out the
administration of the Medicare program. See 21 U.S.C. 371(a); 42 U.S.C.
1395hh(a)(1). This final rule will enhance the fulfillment of the
policies that motivated the regulations issued pursuant to 42 U.S.C.
1302, 42 U.S.C. 1395hh, and 21 U.S.C. 371.
---------------------------------------------------------------------------

    \156\ 85 FR 70103.
    \157\ See, e.g., Medicare and Medicaid Programs; Regulatory
Provisions To Promote Program Efficiency, Transparency, and Burden
Reduction; Part II, 79 FR 27106, 27153 (May 12, 2014) (citing 42
U.S.C. 1302 as statutory authority for the removal of certain
regulatory text); Medicare Program; Amendment to Payment Policies
Under the Physician Fee Schedule and Other Revisions to Part B for
CY 2011 76 FR 1366, 1367 (Jan. 10, 2011) (relying on 42 U.S.C. 1302
and 42 U.S.C. 1395hh, among other statutory provisions, to amend or
remove regulatory text); Color Additives; D&C Green No. 6; Uniform
Specifications, 51 FR 37908, 37909 (Oct. 27, 1986) (citing 21 U.S.C.
371 as statutory authority for amending and removing regulatory
text).
---------------------------------------------------------------------------

    Comment: Several commenters stated that the proposed rule exceeds
the statutory authority of the RFA, because the RFA only affects
regulations that ``have a significant economic impact upon a
substantial number of small entities.'' 5 U.S.C. 602, 604, 605.
However, according to the commenters, the proposed rule does not limit
its reach to those regulations covered by the RFA because it adds
expiration dates to all HHS regulations, not just those that ``have a
significant economic impact upon a substantial number of small
entities.'' \158\ These commenters added that the RFA also does not
mandate the automatic expiration of regulations that have not undergone
agency review.
---------------------------------------------------------------------------

    \158\ See 85 FR 70123; id. at 70104-05 (defining ``Regulations''
as ``a section of the Code of Federal Regulations'').
---------------------------------------------------------------------------

    Response: The primary statutory authorities for this final rule are
the statutory authorities for the Department's existing regulations.
The Department also notes, though, that the text of 5 U.S.C. 610
indicates Congress believed agencies have the authority to periodically
review at least those regulations that have a significant economic
impact upon a substantial number of small entities (and that agencies
have the authority to assess which of their regulations have such an
impact). See 5 U.S.C. 610(a)-(b). The commenters are correct that the
RFA does not mandate the automatic expiration of rules; however, the
RFA also does not foreclose this final rule's approach. As explained
throughout the proposed rule and in this final rule, decades of
experience, empirical evidence, and scholarly commentary all support
the Department's view that this final rule will enhance compliance with
the RFA's directive to periodically review regulations with a SEISNOSE.
    Comment: A few commenters stated that the proposed rule does not
cite the RFA (5 U.S.C. 610) as a source of its statutory authority.
These commenters stated that they believe the Department omitted the
RFA it its list of statutory authority because the rule is contrary to
the statute.
    Response: The proposed rule cited 5 U.S.C. 610 as one of the
statutory bases for the proposed rule.\159\ The statutory bases for
this rulemaking also include the existing statutory authorities for the
Department's regulations. This final rule is consistent with the RFA,
because it sets forth a plan for the periodic review of the regulations
issued by the Department which have or will have a significant economic
impact upon a substantial number of small entities. See 5 U.S.C.
610(a). Moreover, this final rule requires such review to consider the
factors set forth in 5 U.S.C. 610(b). The text of 5 U.S.C. 610
indicates Congress believed agencies have the authority to periodically
review at least those regulations that have a significant economic
impact upon a substantial number of small entities (and that agencies
have the authority to assess which of their regulations have such an
impact). See 5 U.S.C. 610(a)-(b).
---------------------------------------------------------------------------

    \159\ See 85 FR 70119, 70120, 70121, 70123.
---------------------------------------------------------------------------

Specific Provisions of the Proposed Rule and Final Rule
Section [XX](a)
    In the proposed rule, HHS proposed to add Section [XX](a), which
provided that the proposed rule would apply to and amend all
Regulations issued by the Secretary or his delegates or sub-delegates
in this title. HHS received no comments specific to Section [XX](a).
However, in this final rule HHS replaces ``this title'' with ``this
chapter,'' and amends the relevant chapters of Titles 21, 42, and 45,
rather than amending all regulations that were issued by the Secretary
(or his delegates or sub-delegates) in the titles. HHS makes this
change to increase clarity and precision. For example, certain chapters
in Title 21 contain Drug Enforcement Administration, not HHS or FDA
regulations. Although the proposed rule's use of the language
``Regulations issued by the Secretary or his delegates or sub-delegates
in this title'' addressed this by limiting the scope of the

proposed rule to regulations issued by the HHS Secretary or his
delegates or sub-delegates, HHS in this final rule amends the chapters
belonging to HHS, rather than the entirety of the titles. This is not a
substantive change and does not cause the application of the final rule
or the rights and obligations it creates to differ from the proposed
rule.\160\
---------------------------------------------------------------------------

    \160\ In addition, whereas the proposed rule added certain
regulatory text to Title 45, Part 6, this final rule adds the text
to Title 45, Part 8. This is not a substantive change. Since the
Department anticipates that, for good governance and streamlining
reasons, Part 6 soon may soon be subsumed into Part 5, the
Department in this final rule adds the relevant text to Part 8.
---------------------------------------------------------------------------

    Similarly, HHS clarifies that it is amending its other regulations
through the provisions in this final rule by generally applying an
expiration date to those regulations, if certain conditions are not
met, rather than asking the Office of the Federal Register to literally
amend each other regulation, which would be unnecessarily burdensome
and resource intensive. Accordingly, this final rule states that it
applies to and ``shall be deemed to amend'' all regulations issued by
the Secretary or his delegates or sub-delegates in the applicable
chapters. This is not a substantive change and does not affect the
application of the final rule or the rights and obligations it creates.
    HHS received no comments specific to section [XX](a) of the
proposed rule.
    Accordingly, HHS finalizes section [XX](a) to read, ``[t]his
section applies to and shall be deemed to amend all regulations issued
by the Secretary or his delegates or sub-delegates in this chapter.''
Section [XX](b)
    HHS proposed to add section [XX](b), which defined several terms
used in the proposed rule.
i. Section [XX](b)(1)
    HHS proposed to define ``Assess'' as ``a determination by the
Department, in consultation with other Federal agencies as appropriate,
as to whether the Regulations issued as part of the same rulemaking
(and any amendments or additions that may have been added thereafter)
currently have a significant economic impact upon a substantial number
of small entities.''
    5 U.S.C. 610 directs agencies to have plans to periodically review
those regulations that have or will have a significant economic impact
upon a substantial number of small entities. Accordingly, in order to
determine which regulations to periodically review using 5 U.S.C. 610's
criteria, the Department must first determine which rules have a
significant economic impact upon a substantial number of small
entities. When promulgating regulations, the Department is required to
determine whether a rule will have a significant economic impact on a
substantial number of small entities. See 5 U.S.C. 605(b).\161\ The
Assessment refers to an essentially identical determination. In making
the Assessment, the Department can look to the determination of the
regulation's impact on small entities made at the time of promulgation,
as well as experience since promulgation.
---------------------------------------------------------------------------

    \161\ 5 U.S.C. 605(b) refers to rules that have a ``significant
economic impact on a substantial number of small entities,'' whereas
5 U.S.C. 610 refers to rules that have ``significant economic impact
upon a substantial number of small entities.'' This does not appear
to be a material difference.
---------------------------------------------------------------------------

Comments on Section [XX](b)(1)
    HHS received the following comment on the proposed definition of
``Assess.''
    Comment: A few commenters stated that HHS should clarify that
periodic Assessments must look to the determination of the regulation's
impact on small entities made at the time of promulgations, as well as
experience since promulgation.\162\ These commenters stated that HHS
should clarify that any Assessment that only contemplates the former
and ignores the latter will be deficient.
---------------------------------------------------------------------------

    \162\ See A Guide for Government Agencies: How To Comply With
The Regulatory Flexibility Act, U.S. SBA Off. of Advoc., at 80-81
(2017), https://cdn.advocacy.sba.gov/wp-content/uploads/2019/06/21110349/How-to-Comply-with-the-RFA.pdf, (``If Congress meant to
limit periodic reviews, it would have simply required agencies to
review rules that originally had a significant impact, rather than
rules that now have a significant impact.'').
---------------------------------------------------------------------------

    Response: Assessments must analyze the regulation's impact on small
entities at the time the regulation is being Assessed. The Department
believes this is clear from the text of the proposed rule, which
defined ``Assess'' as ``a determination by the Department, in
consultation with other Federal agencies as appropriate, as to whether
the Regulations issued as part of the same rulemaking (and any
amendments or additions that may have been added thereafter) currently
have a significant economic impact upon a substantial number of small
entities'' (emphasis added). Accordingly, the Department adopts in this
final rule the definition of ``Assess'' from the proposed rule, except
that the term ``Regulations'' in the proposed rule is changed to
``Sections'' in this final rule. The determination made at the time of
promulgation about whether a rulemaking had a SEISNOSE may be a useful
data point in assessing the regulation's current impact on small
entities.
    Accordingly, HHS is finalizing the definition of ``Assess'' as
proposed, with the technical amendment just mentioned.
ii. Section [XX](b)(2)
    HHS proposed to define ``Review'' as a process conducted by the
Department, in consultation with other Federal agencies as appropriate,
the purpose of which shall be to determine whether the Regulations that
were issued as part of the same rulemaking (and any amendments or
additions that may have been issued thereafter) should be continued
without change, or should be amended or rescinded, consistent with the
stated objectives of applicable statutes, to minimize any significant
economic impact of the Regulations upon a substantial number of small
entities.
    HHS received no comments specific to the proposed definition of
``Review.''
    Accordingly, HHS is finalizing the definition of ``Review'' as
proposed, except that it replaces the term ``Regulations'' with
``Sections,'' to conform this provision to the rest of this final rule.
iii. Section [XX](b)(3)
    HHS proposed to define ``Regulation'' as ``a section of the Code of
Federal Regulations. For example, 42 CFR 2.13 is a Regulation, and 42
CFR 2.14 is another Regulation.'' This definition was proposed to make
clear that a section of the CFR, as opposed to a part, subpart, or
paragraph within a section, is the unit that must be Assessed and (if
required) Reviewed, or will otherwise expire. Defining ``Regulation''
in this objective way makes it easier for the Department and the public
to know what exactly has to be Assessed or Reviewed by the dates listed
in the proposed rule. Had the Department used the Administrative
Procedure Act's (APA's) definition of ``rule,'' \163\ it could be
unclear in certain circumstances what precisely needed to be reviewed.
---------------------------------------------------------------------------

    \163\ 5 U.S.C. 551(4) (providing that `` `rule' means the whole
or a part of an agency statement of general or particular
applicability and future effect designed to implement, interpret, or
prescribe law or policy or describing the organization, procedure,
or practice requirements of an agency and includes the approval or
prescription for the future of rates, wages, corporate or financial
structures or reorganizations thereof, prices, facilities,
appliances, services or allowances therefor or of valuations, costs,
or accounting, or practices bearing on any of the foregoing'').
---------------------------------------------------------------------------

    In the final rule, HHS changes the term ``Regulation'' to
``Section'' for the reasons previously discussed.

Comments on Section [XX](b)(3)
    HHS received the following comments on the proposed definition of
``Regulation.''
    Comment: A few commenters stated that HHS arbitrarily chose to
reject the APA's definition of ``Regulation'' and adopted its own
definition of ``Regulation'' for the purposes of this rule, defining
regulation as ``a section of the Code of Federal Regulations.'' Some
commenters stated that using a different definition in this rule from
the definition in the APA (and incorporated in Executive Order 12866
and Executive Order 13771) is confusing. Commenters stated that the
Department's explanation that it used a special definition of
``Regulation'' to avoid confusion that could be created by using the
APA's definition was insufficient and lacked statutory basis.
    Response: To avoid any confusion, HHS uses ``Section,'' rather than
``Regulation,'' in this final rule to refer to a section of the Code of
Federal Regulations. It is crucial to the proper function of this final
rule that the Department and public clearly understand the scope and
timing of the Assessment and Review process. Such understanding is made
easier with a bright-line definition of the agency issuances that are
subject to Assessment and Review. The Department's use of ``Section''
endeavors to provide such clarity by using a readily available and
well-established system of organization, the Code of Federal
Regulations. It is clear when a section of the Code of Federal
Regulations was first promulgated.
    The use of ``Section,'' rather than ``Regulation,'' in this final
rule is not a substantive change from the proposed rule. Rather, it is
an attempt to bring additional clarity by using ``Section'' to refer to
a section of the Code of Federal Regulations, rather than using the
term ``Regulation.''
    Comment: One commenter expressed concern over the proposed rule's
definition of ``Regulation,'' stating that the definition is too
narrow. This commenter stated that under the proposed rule, each
Regulation would be Assessed or Reviewed without the context of the
preamble language that was included in the rulemaking.
    Response: HHS respectfully disagrees. ``Assessment'' and ``Review''
are defined in this final rule as determinations with respect to
``Sections that were issued as part of the same rulemaking (and any
amendments or additions that may have been issued thereafter).'' In the
proposed rule, ``Regulation'' was defined as a section of the Code of
Federal Regulations so the Department and public can know what units
would expire absent Assessment or (if needed) Review. But the text of
the final rule makes clear that a single Assessment or Review should be
performed on all Sections that were issued as part of the same
rulemaking (and any amendments or additions that may have been issued
thereafter). The Department disagrees with the commenters who stated
that, under the proposed rule, each Regulation would be Assessed or
Reviewed without the context of the preamble language that was included
in the rulemaking. Under this final rule, the Department may consider
this information when conducting Assessments and Reviews.
    Accordingly, HHS is finalizing the definition proposed, except that
it defines the term ``Section'' rather than ``Regulation.''
iv. Section [XX](b)(4)
    HHS proposed to define ``Year of the Regulation's Promulgation'' to
mean the calendar year the Regulation first became effective,
irrespective of whether it was subsequently amended. The purpose of
this proposed definition was to provide clarity to the Department and
the public. If a regulation were amended, questions could arise whether
the clock for re-reviewing the rule making in which the regulation was
first promulgated begins on the date the rule making was first
promulgated; the date it was last amended; or whether the clock for
reviewing the amended portion begins on a different date than the
portion that was initially enacted. The proposed definition is more
clear for the Department and the public, because this definition, in
conjunction with section [XX](c) of the proposed rule, makes clear that
the clock starts for the retrospective review of a regulation on the
date that the rule making from which the regulation originates was
first promulgated, even if it is subsequently amended.
    If, for example, the Department issues a regulation as a part of a
rule making and amends it nine years later, the Department may wish to
conduct the regulatory review of the entire rule making at the time of
amendment of a specific regulation initially promulgated in that rule
making, particularly since the Department is presumably already
performing a regulatory impact analysis with regard to the amendment.
Since the Department is already conducting a regulatory impact
analysis, performing the regulatory review at that time may save
Department resources and spare the Department from having to perform
the Review on the regulation the next year. In fact, any time the
Department amends a regulation, it could perform the regulatory review
at that time, thereby conserving Department resources.
    HHS received no comments specific to the proposed definition of
``Year of the Regulation's Promulgation.''
    Accordingly, HHS is finalizing the definition of ``Year of the
Regulation's Promulgation'' as proposed, except that it changes the
term ``Regulation'' to ``Section.''
v. Section [XX](b)(5)
    HHS proposed to define ``[s]ignificant economic impact upon a
substantial number of small entities'' as having the meaning ascribed
to that term in the Regulatory Flexibility Act, Public Law 96-354, 94
Stat. 1164 (Sept. 19, 1980) (as amended 1996).
    HHS received the following comments on the proposed definition of
``Significant economic impact upon a substantial number of small
entities.''
    Comment: A few commenters stated that neither the proposed rule,
nor the RFA gives a clear definition of ``significant impact'' or of
``small entity,'' and asked that HHS clarify the definition of these
terms in the final rule.
    Response: HHS declines to add definitions of these terms within
this final rule. ``Significant economic impact'' and ``small entity''
are terms within the RFA, which has been in existence for over forty
years. These terms have been applied by the Department and other
agencies since the RFA's enactment. Definitions pertinent to ``small
entity'' appear at 5 U.S.C. 601. As explained in the proposed rule, the
Department has considered a rule to have a significant impact on a
substantial number of small entities if it has at least a three percent
impact on revenue on at least five percent of small entities.\164\
---------------------------------------------------------------------------

    \164\ See 85 FR at 70117.
---------------------------------------------------------------------------

    Comment: One commenter stated that the citation in the definition
of ``Significant economic impact upon a substantial number of small
entities'' found at 21 CFR 6.1(b)(5), 42 CFR 1.1(b)(5), 42 CFR
404.1(b)(5), and 45 CFR 6.1(b)(5) was incorrect. The proposed rule
cited the Regulatory Flexibility Act, Public Law 96-354, 94 Stat. 1164
(Sept. 19, 1980) (as amended 1996). This commenter stated that because
the definition in the RFA appears in section 610 of title 5 of the U.S.
Code, the correct citation is to the code. This commenter also stated
that the definition of ``Significant economic impact upon a substantial
number of

small entities'' shall be defined to have the meaning ``of'' that term
in 5 U.S.C. 610, rather than the meaning ``ascribed to'' that term in 5
U.S.C. 610.
    Response: HHS appreciates the comments and agrees that citation to
the Code is proper. This final rule incorporates this suggestion, and
replaces the citation in the proposed rule with ``5 U.S.C. 610.'' It
also incorporates the comment to use ``of'' instead of ``ascribed to.''
This revised definition may provide increased clarity.
    Accordingly, in this final rule HHS is finalizing the definition of
``[s]ignificant economic impact upon a substantial number of small
entities'' to provide that this term shall have the meaning of that
term in section 610 of title 5 of the United States Code.
Section [XX](c)
i. Section [XX](c)(1)-(2)
    In the proposed rule, HHS proposed that unless a Regulation
contains an earlier expiration date or is rescinded earlier, all
Regulations issued by the Secretary or his delegates or sub-delegates
in this title shall expire at the end of either (1) two calendar years
after the year that this 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 Review of the Regulation is required pursuant to paragraph (d))
Reviewed the Regulation, whichever is latest. The last year in which
the Department Assessed and (if Review of the Regulation is required)
Reviewed the Regulation shall be the year during which the findings of
the Assessment and, if required, the Review of the Regulation are
published in the Federal Register pursuant to paragraph (f) of this
section.
    In other words, under the proposed rule the Department must Review
all its regulations (subject to the exceptions listed below) that have
a significant economic impact upon a substantial number of small
entities every ten years, or such regulations shall expire. To
determine which regulations have a significant economic impact upon a
substantial number of small entities, the proposed rule stated that the
Department must Assess all its regulations (subject to the exceptions
listed below) every ten years, or such regulations shall expire if not
Assessed. The Department believes all of its regulations (subject to
the exceptions) should be Assessed and, if they have a significant
economic impact upon a substantial number of small entities, Reviewed.
The proposed rule stated that Assessments and Reviews should not be
performed only on those regulations issued after the proposed rule goes
into effect. After all, it is likely that some regulations promulgated
decades ago may have become outdated.\165\
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    \165\ See, e.g., Office of Mgmt. & Budget, Validating Regulatory
Analysis: 2005 Report to Congress on the Costs and Benefits of
Federal Regulations and Unfunded Mandates on State, Local, and
Tribal Entities, at 46-47 (2005), http://perma.cc/R8LX-BQMJ; Cynthia
Morgan & Nathalie B. Simon, National primary drinking water
regulation for arsenic: A retrospective assessment of costs, 5 J.
Benefit Cost Anal. no. 2, 2014, at 259-84, https://www.cambridge.org/core/services/aop-cambridge-core/content/view/A7B29CE98E650B424E92FF292A8FFC89/S2194588800000774a.pdf/national_primary_drinking_water_regulation_for_arsenic_a_retrospective_assessment_of_costs.pdf.
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    Section [XX](c) of the proposed rule made clear that Department
regulations (subject to the exceptions listed below) shall expire if
their Assessment and (if required) Review are not timely performed.
Both 5 U.S.C. 610 and executive orders by multiple presidents over
several decades direct the Department to devise plans to periodically
review many of its regulations.\166\ Although the Department
retrospectively reviewed a very limited number of its regulations,
observers have over the decades noted that the Department has not
always performed retrospective review to a satisfactory extent, and
many of its regulations have not been reviewed. Therefore, the
Department concluded in the proposed rule that it was appropriate to
impose on itself a stronger incentive to ensure it complies with the
purposes animating the RFA and the executive orders, as well as to
ensure its regulations are not unduly burdening the public. As a CRS
report put it, ``[w]ithout some type of enforcement of the review
requirement, agencies are unlikely to conduct many more reviews than
have occurred pursuant to Section 610.'' \167\ This is one reason why
analyses have found that sunset provisions are an effective way to
improve governance and reduce undue regulatory burdens.\168\ States
have imposed similar expiration dates for many of their regulations
unless they are reviewed or readopted.
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    \166\ The RFA and the Executive Orders direct agencies to review
overlapping, but not identical, sets of regulations. The RFA directs
agencies to have plans to review regulations that have a
``significant economic impact upon a substantial number of small
entities.'' 5 U.S.C. 610. By contrast, Executive Order 12866
directed agencies to submit to OIRA programs to periodically review
``significant regulations.'' Exec. Order 12866, Sec. 5(a).
``Significant regulations'' are not necessarily those that have a
``significant economic impact upon a substantial number of small
entities.'' Id. at Sec. 3(f) (defining ``significant regulatory
action'' as any regulatory action that is likely to result in a rule
that may: (1) Have an annual effect on the economy of $100 million
or more or adversely affect in a material way the economy, a sector
of the economy, productivity, competition, jobs, the environment,
public health or safety, or State, local, or tribal governments or
communities; (2) Create a serious inconsistency or otherwise
interfere with an action taken or planned by another agency; (3)
Materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) Raise novel legal or policy issues arising out of
legal mandates, the President's priorities, or the principles set
forth in this Executive order.''). Executive Order 13563 also
directed agencies to review ``significant regulations.'' Exec. Order
13563, Sec. 6. The Department has proposed to Review those
regulations that satisfy the RFA criteria, since those are the
regulations that Congress directed agencies to have plans to review.
The Department requested comment on whether additional regulations,
such as significant regulations, should also be Reviewed.
    \167\ Curtis W. Copeland, Cong. Rsch. Serv., RL32801,
Reexamining Rules: Section 610 of the Regulatory Flexibility Act 11
(2008); see also Yoon-Ho Alex Lee, An Options Approach to Agency
Rulemaking, 65 Admin. L. Rev. 881, 895-96 (2013) (setting forth
possible reasons why agencies, even when they have adequate
resources, may be reluctant to perform retrospective reviews).
    \168\ Russell S. Sobel & John A. Dove, State Regulatory Review:
A 50 State Analysis of Effectiveness 36 (Mercatus Ctr., Working
Paper No. 12-18, 2012), https://www.mercatus.org/system/files/State-Regulatory-Review-50-State-Analysis-Effectiveness.pdf;);
Occupational Licensing: A Framework for Policymakers, The White
House, at 48-50 (July 2015), https://obamawhitehouse.archives.gov/sites/default/files/docs/licensing_report_final_nonembargo.pdf.
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    It complies with the APA to amend regulations to specify dates by
which regulations expire unless the Assessment and/or Review is timely
performed. An agency can, through notice-and-comment rulemaking, amend
its regulations to provide that they expire at a future date.\169\ An
agency can also provide that its regulations expire upon the occurrence
of a condition.\170\ That is what the Department proposed

in the proposed rule. To be sure, an agency generally must ``articulate
a satisfactory explanation'' for its action, ``including a rational
connection between the facts found and the choice made,'' and cannot
``entirely fail[] to consider an important aspect of the problem.''
\171\ The Department anticipates that if a regulation expires because
the Department does not timely complete its regulatory review, a
litigant might object to the expiration on the grounds that the
Department by definition did not ``articulate a satisfactory
explanation'' or ``failed to consider an important factor,'' because in
not performing an Assessment or Review, the Department failed to
consider any factors. The Department rejects such arguments. In this
rulemaking, the Department is considering the important factors. For
the reasons described in the proposed rule and in this final rule, the
Department believes the benefits of retrospective review, and the need
to strongly incentivize it, are so great that the risk of a regulation
inadvertently expiring is justified by the benefit of
institutionalizing retrospective review in this manner. Forty years of
experience since the RFA's enactment; the decades since relevant
Executive Orders were enacted; and other Federal government efforts to
spur the Department to conduct more retrospective reviews indicate
that, absent such a forcing mechanism, the Department will not conduct
as many retrospective reviews as desired.
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    \169\ See, e.g., Amendment to the Interim Final Regulation for
Mental Health Parity, 70 FR 42276, 42277 (July 22, 2005) (amending
interim final rule, to provide that ``the requirements of the MHPA
interim final regulation apply to group health plans and health
insurance issuers offering health insurance coverage in connection
with a group health plan during the period commencing August 22,
2005 through December 31, 2005. Under the extended sunset date, MHPA
requirements do not apply to benefits for services furnished after
December 31, 2005.''); see generally Clean Air Council, 862 F.3d at
9 (an agency can amend or revoke a legislative rule through notice-
and-comment rulemaking).
    \170\ See, e.g., Control of Communicable Diseases; Foreign
Quarantine 85 FR 7874, 7874 (Feb. 12, 2020 (providing that, unless
extended, interim final rule ``will cease to be in effect on the
earlier of (1) the date that is two incubation periods after the
last known case of 2019-nCoV, or (2) when the Secretary determines
there is no longer a need for this interim final rule''); Medicare
and Medicaid Programs, Clinical Laboratory Improvement Amendments
(CLIA), and Patient Protection and Affordable Care Act; Additional
Policy and Regulatory Revisions in Response to the COVID-19 Public
Health Emergency, 85 FR 54820, 54820 (Sept. 2, 2020) (providing that
an interim final rule applies ``for the duration of the [public
health emergency] for COVID-19'').
    \171\ Little Sisters of the Poor Saints Peter and Paul Home v.
Pa., 140 S. Ct. 2367, 2383-84 (2020) (quoting Motor Vehicle Mfrs.
Assn. of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,
43 (1983)).
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    The Department will mitigate this risk by setting up two web pages
on the Department's website by the date this final rule is published;
one that lists the dates of promulgation of all of its rulemakings, and
a second that lists the rulemakings that contain regulations (called
``Sections'' in this final rule) that the Department has decided to
Assess or Review. The Department will regularly update the web page
listing the rulemakings containing Sections that it has decided to
Assess or Review with all additional rulemakings containing Sections
that it begins to Assess or Review. The Department will also create a
docket on Regulations.gov, to which the public may direct any comments
requesting that the Department begin the Assessment or Review of
regulations. This requirement is described in more detail in the
discussion of section [XX](h).
    Therefore, in this rulemaking process, which amends Department
regulations through the notice-and-comment process, the Department is
considering the important factors. In addition, the Department intends
to create on its website a dashboard that shows its progress on its
Assessments and Reviews, including when it commenced those Assessments
and Reviews, its progress, and when it expects them to be completed.
The Department also intends to create a dashboard showing its progress
on conducting Assessments and Reviews. See Section II.F. for more
detail on the dashboard.
    The Department proposed to perform the Assessment and (if required)
the Review on each regulation every ten years. Some states provide
that, unless readopted or re-reviewed, their regulations expire in
seven years,\172\ while at least one state uses a ten-year time
period.\173\ The Department proposed to perform the Assessment and (if
required) the Review every ten years, because ten years is the period
listed in 5 U.S.C. 610.
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    \172\ See, e.g., N.J. Admin. Code Sec.  1:30-6.4 (2020)
(regulations expire every seven years unless readopted, subject to
certain exceptions); Ind. Code 4-22-2.5-2 (2020) (imposing seven-
year expiration date on regulations unless readopted).
    \173\ N.C. Gen. Stat. 150B-21.3A (2020).
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    The proposed rule provided that regulations promulgated more than
ten years ago will expire at the end of two calendar years from the
date the proposed rule, if finalized, became effective, unless an
Assessment and (if required) the Review is performed on them. In the
proposed rule, the Department requested public comment on whether two
years is an appropriate time period to Assess and (if required) Review
Regulations promulgated more than ten years ago.
    The Department has decided that all of its regulations (subject to
the exceptions listed below) should be periodically Assessed to
determine whether they have a significant economic impact upon a
substantial number of small entities. Without performing the
Assessment, the Department may not know which regulations have or will
have a significant economic impact upon a substantial number of small
entities. Due to changed circumstances, a regulation that did not have
such an impact at the time it was promulgated may now have such an
impact. The Department is also aware of literature suggesting that
agencies have not been consistent in deciding which rules have a
significant economic impact on a substantial number of small entities,
or have avoided such a finding in order to avoid complying with the
RFA's requirements.\174\ By Assessing all of its regulations (subject
to the exceptions described herein) and publishing the results of the
Assessments, the Department can avoid concern that the Department is
failing to Assess or Review regulations that have a significant
economic impact upon a substantial number of small entities.
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    \174\ See, e.g., Connor Raso, Agency Avoidance of Rulemaking
Procedures, 67 Admin. L. Rev. 65, 93-95, 99-101 (2015); Michael R.
See, Willful Blindness: Federal Agencies' Failure to Comply with the
Regulatory Flexibility Act's Periodic Review Requirement--And
Current Proposals to Reinvigorate the Act, 33 Fordham Urb. L. J.
1199, 1222-25 (2006).
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    The Department should in many cases perform a single Assessment
(and, where required, a single Review) that considers all regulations
issued as part of the same rulemaking. That would generally make sense
from an economic perspective, for the same reasons that the Department
in many cases does a single regulatory impact analysis on all
regulations that are issued as part of the same rulemaking. That is why
the proposed rule and this final rule define ``Assess'' and ``Review''
as determinations regarding ``Regulations issued as part of the same
rulemaking (and any amendments or additions that may have been added
thereafter)'' (except that the term ``Regulations'' is replaced with
``Sections'' in this final rule). Indeed, 5 U.S.C. 605(c) provides that
``[i]n order to avoid duplicative action, an agency may consider a
series of closely related rules as one rule for the purposes of
sections 602, 603, 604 and 610 of this title.'' Thus, if a series of
regulations were issued as part of the same rulemaking and one of those
regulations was subsequently amended, the Department would in many
cases take the view that the series of regulations could be Assessed or
Reviewed together for purposes of this final rule.
    The same is true for the converse. Consider, for example, the 2015
rulemaking Preventive Controls for Human Food that established 21 CFR
part 117 and also amended or revised individual regulations in Parts 1,
106, 110, 114, 120, 123, 129, 179, and 211 that were originally issued
before 2015.\175\ If the Department so chose, when the deadline
approaches for Assessing and (if required) Reviewing the amended
regulations in 21 CFR part

106, the Department could, as part of the same Assessment or Review,
also assess or review the other regulations that were amended in this
rulemaking.
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    \175\ Current Good Manufacturing Practice, Hazard Analysis, and
Risk-Based Preventive Controls for Human Food, 80 FR 55,907 (Sept.
17, 2015). https://www.federalregister.gov/documents/2015/09/17/2015-21920/current-good-manufacturing-practice-hazard-analysis-and-risk-based-preventive-controls-for-human.
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    For regulations that were issued in coordination with another
Agency, that function in concert with another Agency's regulations, or
that have a specific, direct impact on regulations issued by another
Federal agency, the proposed rule proposed that the Department would
consult with that other Agency when undertaking the Assessment or
Review, and consider the other Agency's views when considering the