HHS Delays SUNSET Rule …Again

The Department of Health and Human Services (HHS) has again delayed implementation of a rule that would cause it to review many of its regulations and would eliminate regulations that HHS fails to review. The rule had the potential to remove many non-statutory restrictions that HHS has placed on the healthcare industry. This delay likely presages the ultimate repeal of the rule.

The SUNSET Rule, which was finalized in the closing days of the Trump Administration, requires HHS to assess its current rules. First, HHS would determine whether a rule has a significant economic impact on a large number of small entities. If it does, then HHS would consider the complaints against the rule, the original asserted need for the rule, the complexity of the rule, and whether the rule is duplicative of or in conflict with any other rules. HHS would ultimately determine whether the rule is still needed, should be reworked, or should be withdrawn. Any rule that is not reviewed by HHS every ten years would expire. Any rule that was more than ten years old at the time the SUNSET Rule came into effect would expire unless it was reviewed within five years.

Under the Biden Administration, HHS first delayed the implementation of the SUNSET.  Then, in late 2021, HHS proposed to repeal the SUNSET Rule in its entirety. HHS’ rational for the proposed repeal was that it did not have sufficient resources to review all of its regulations within the required timeframes and this would cause some regulations to expire before HHS could complete reviews. While this position may indicate that HHS has engaged in excessive rule-making, HHS’ most recent proposal evinces a likely intent to repeal the SUNSET Rule in its entirety. In March 2022, HHS again delayed the implementation of the SUNSET Rule, including that it was still considering public comments to its proposal to repeal the Rule.

Further complicating matters, HHS has faced a lawsuit regarding the SUNSET Rule. Several industry groups sued HHS to stop the implementation of the SUNSET Rule, arguing that it would cause regulatory confusion and industry disruption. Despite its apparent inclination to repeal the SUNSET Rule, HHS has not conceded this lawsuit, but has caused it to be delayed while HHS considers its position. Public comments on the proposal to repeal the SUNSET Rule have closed and the industry awaits a final decision from HHS. However, it appears likely that the SUNSET Rule will itself be eliminated.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding the healthcare regulatory landscape. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.