On May 26, 2022, the United States Department of Health and Human Services (HHS) repealed the Securing Updated and Necessary Statutory Evaluations Timely (SUNSET) final rule that was initially published on January 19, 2021. HHS notes that “the process to promulgate the rule was extremely unusual, if not unprecedented” and that it was “expansive in scope and impact, faced considerable opposition from stakeholders (and very little support), and lacked a public health or welfare rationale for expediting rulemaking.”
Background on SUNSET Rule
The SUNSET final rule required that all HHS regulations (with certain exceptions) would be rendered ineffective either (1) two calendar years after the year that the SUNSET rule became effective; (2) ten calendar years after the year of the regulation’s publication; or (3) ten calendar years after the last year in which HHS conducted a detailed review or assessment of that regulation. Essentially, under the SUNSET rule, unless HHS assessed and reviewed most of its regulations within the timeframe specified in the rule (for most of the existing regulations, within two years) and every ten years thereafter, regulations would automatically expire.
The SUNSET rule also provided that if a review led to a finding that a regulation should be amended or rescinded, HHS must amend or rescind the regulation within a specified timeframe (generally two years).
On March 19, 2021, HHS postponed the implementation of the SUNSET rule from March 22, 2021, to March 22, 2022. On March 4, 2022, HHS then pushed the effective date back again, to September 22, 2022. On October 29, 2021, HHS proposed repealing the rule based on stakeholder concerns about the validity of its provisions and HHS concerns over implementation. This final rule confirms that the SUNSET rule will be repealed.
HHS’ Reasons for Withdrawal
HHS believed that implementing the SUNSET final rule would not only result in an administrative burden on the Department and its related agencies but also lead to regulatory uncertainty. HHS officials added that the automatic expiration of its regulations holds the potential for public harm and that the sudden expiration of regulations would potentially harm small entities by creating an undue and disproportionate burden. In the October 2021 proposed rule to withdraw the SUNSET final rue, HHS noted that “based on a reanalysis of the regulatory impact of the rule, we now believe that the rule rested on a flawed understanding of the resources required for this undertaking, which implicates the likelihood that HHS regulations would expire if the final rule were to go into effect.”
HHS further claimed that the definitions and exceptions in the final rule are ambiguous, which might result in the automatic expiration of many regulations.
Stakeholder comments in response to the Notices also raised questions about the final rule’s consistency with the Administrative Procedure Act. HHS believed those comments merited further review and consideration, which is part of what lead to the withdrawal of the final rule. Specifically, HHS notes that “amending thousands of regulations to schedule their expiration based on the Department’s purported failure to conduct a small-entity analysis, without any corresponding notice regarding or evaluation of the public health importance of the individual regulations or the public’s reliance on them,” is a violation of the Administrative Procedure Act and is inconsistent with the purpose and intent of the Regulatory Flexibility Act. HHS further noted that policy ramifications and legal defects of the expiration provision call the entire rulemaking into question.