The Department of Health and Human Services (HHS) on Feb. 28 announced a significant policy change that could greatly restrict stakeholders’ opportunity to review and provide input on regulatory changes affecting Medicaid and other programs. Under its new policy, HHS will exercise discretion in deciding whether to use notice and comment procedures for matters related to grants, benefits, and contracts, among other categories.
For more than 50 years, HHS has routinely undertaken notice and comment rulemaking for most regulations issued by the agency, even if exempt from rulemaking under the Administrative Procedure Act (APA). The APA exempts from notice and comment rulemaking matters relating to grants, benefits, and contracts, among other categories, and allows agencies to forgo notice and comment when an agency for “good cause” finds that notice and comment procedures are “impracticable, unnecessary, or contrary to public interest.”
In 1971, HHS issued a statement of policy committing the department to follow notice and comment procedures, even when not required under the APA exception for matters falling within these categories, and to use the “good cause” exception only sparingly. The 1971 policy emphasized the importance of public participation in the formulation of the department’s rules and regulations.
HHS’s announcement notes that the requirements of the prior policy “impose costs on the Department and the public, are contrary to the efficient operation of the Department, and impede the Department’s flexibility to adapt quickly to legal and policy mandates.” While the Medicare statute requires HHS to use notice and comment rulemaking for Medicare programmatic changes, the Medicaid program could be subject to this new policy because Medicaid is administered as a grant to states.
America’s Essential Hospitals is carefully reviewing HHS’ policy change and its potential impact on Medicaid and other programs the department administers and will update members on this developing matter.
Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.
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