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HHS Posts Civil Enforcement, Regulatory Review Mandates


The administrative levers at the U.S. Department of Health and Human Services will change hands shortly, but the current administration has taken two actions that each could have a significant impact going forward. HHS finalized a November 2020 draft rule stipulating a decennial review of regulations, while the second action sets an enforcement policy that in part seems to reflect the terms of a memo released by the Department of Justice in January 2018.

HHS had proposed a decennial review of regulations issued by its agencies under the Regulatory Flexibility Act of 1980, which proposed that the review include a consideration of whether a rule should be modified or rescinded. The proposed change was justified in part by a retrospective examination of regulations posted prior to 1990 by means of an artificial intelligence algorithm, which determined that 85% of these legacy regulations had never been edited.

The final rule, announced Jan. 8, is dubbed the Securing Updated and Necessary Statutory Evaluations Timely (SUNSET), and retains the 10-year lookback interval provided by the draft. Any regulation that is 10 years old as of the date of the final rule must be examined within five years of the effective date of the rule, more than twice the two-year term of compliance provided by the draft.

One difficulty for the authors of this rule is that it does not go into force until 60 days until after its appearance in the Federal Register, suggesting the incoming administration will have ample opportunity to repeal it. Given the robust history of bipartisan support for such actions as cited in the HHS press release, however, the next administration at HHS may believe there is some justification for leaving it in place.

Rebranding the Brand memo

HHS posted a second final rule in mid-January, which is “designed to enhance” department practices in the context of transparency and fairness in civil enforcement actions. The Jan. 12 announcement for the rule was followed Jan. 13 by a formal statement by HHS chief of staff Brian Harrison, which states that the rule pertains to parties caught up in administrative enforcement and adjudication proceedings.

An example of this policy is that HHS will conduct its in-house adjudications in a manner that more strongly resembles those conducted in federal court, but also that enforcement discretion may be exercised for defendants who had acted in good faith when they breached the law. Harrison said the department’s civil enforcement division activity can readily cripple small businesses and individuals, and that HHS owes it to these entities to ensure that any such proceedings are fair and transparent.

Among other things, the final rule reinforces the HHS commitment to prohibit the practice of treating non-compliance with “a standard or practice” that appears nowhere but in HHS agency guidance “as itself a violation of the law.”

The HHS announcement would seem to echo the Brand memo, which the Department of Justice disclosed in January 2018. DOJ characterized the memo as a prohibition of the conversion of agency guidance documents into binding rules during civil enforcement actions. The scope of this policy was presumably limited to the actions of federal attorneys, although the memo itself states that its terms are applicable when those attorneys are handling affirmative civil enforcement cases for client agencies. Among these client agencies is the FDA.

That understanding was reinforced by a presentation made by Deputy Assistant Attorney General Ethan Davis in February 2018. The conference at which Davis spoke dealt with the off-label promotion question that has vexed the FDA for a number of years, and Davis noted that the department’s civil division collaborates closely with the FDA.

In addition to the provision regarding agency guidance, the HHS rule requires that all civil administrative inspections be conducted according to published rules of procedure. The rule also requires that the department provide written notice and opportunity to respond before taking any civil enforcement action with legal consequence, although HHS said exceptions exist.

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