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  • October 28, 2020

    HHS’s Proposed Rule on Guidance Documents Would Clarify Agency Expectations

    A rule proposed by U.S. Department of Health and Human Services requires its components to inform the public when issuing a “guidance document” and to clarify the document’s legal impact. James Junger and Heather Mogden discuss the proposed rule and how to petition a review of guidance documents that may go too far.

    Heather D. Mogden and James Junger

    The federal government relies heavily on nonbinding, subregulatory guidance when regulating health care entities, which can cause confusion.

    In response to an Executive Order1 that sought to address this problem across all federal agencies, the Department of Health and Human Services (HHS) proposed a rule2 that requires HHS components to inform the public when issuing a “guidance document” and to clarify the document’s legal impact.

    Heather Mogden Heather Mogden, Marquette 2012, is an associate with Hall Render Killian Heath & Lyman in Milwaukee, where she represents health care providers in state and federal courts.

    James Junger James Junger, U.W. 2014, is an associate in the Milwaukee office of Hall Render, where he focuses on health care compliance issues, including policy development, investigations, and incident response.

    The new procedures also create a process for “any interested party” to petition HHS to review guidance documents that go too far in creating new legal obligations.

    Because it is already subject to regulations on good guidance practices, only the Food and Drug Administration is exempt from the rule.3

    The proposed rule was published in the Federal Register on Aug. 20, 2020, and the comment period has closed. HHS has already missed the Executive Order’s deadline to finalize good guidance regulations by Aug. 26, 2020.4

    But the proposed rule imposes a Nov. 2, 2020, deadline for the agency to post any guidance to the required online repository – so a final rule can reasonably be expected soon.

    New Definition of ‘Guidance Document’

    The proposed rule applies to a defined range of guidance documents that include “any Department statement of general applicability, intended to have future effect on the behavior of regulated parties and which sets forth a policy on a statutory, regulatory, or technical or scientific issue or an interpretation of a statute or regulation,” as determined by the content of the communication rather than the format.5 In other words, even “video, audio, and web-based” materials could be guidance documents subject to the new procedures.6

    The proposed rule helpfully identifies documents commonly issued by HHS that do not constitute guidance documents. Examples include:

    • rules promulgated through notice-and-comment rulemaking;

    • rules exempt from rulemaking requirements;

    • rules and internal guidance intended to affect the behavior of the Department rather than the behavior of regulated parties; and

    • statements that apply only to specific factual circumstances – such as advisory opinions issued by the Centers for Medicare & Medicaid Services (CMS) or the Office of Inspector General.

    However, if the content of such a statement is designed to guide the conduct of other regulated parties in addition to the particular party addressed, the document must be labeled as “guidance” to avoid surprises.7

    Procedural Requirements

    HHS components will have to clearly identify which documents are “guidance” and use specific language informing the public that the guidance is not binding “unless specifically incorporated into a contract,” and serves only to clarify existing legal requirements.8

    When a guidance document directs a party outside the federal government to do something, HHS components will have to include citations to statutes, regulations or binding judicial precedent that support the directive. HHS components will also have to identify the persons and activities that are subject to the guidance document.9

    A statement constituting a “significant guidance document” must be labeled as such, and will be subject to additional rules, including a notice-and-comment process. HHS will also presume that any significant guidance document is actually a legislative rule that has to go through the traditional rulemaking process.10

    Online Guidance Repository

    All HHS guidance documents will be uploaded to an online, text-searchable repository located on the HHS website.11 If an existing guidance document is not in the repository by Nov. 2, 2020, it will be considered rescinded.12 New guidance documents will have to be uploaded within three business days of the date that they are issued.13

    In the authors’ experience, HHS’s guidance repository is not as user-friendly as one would hope. Attorneys are strongly advised to search for documents in multiple ways before determining that they are not housed in the repository.

    Petitions for Review

    The proposed rule will also create a process for the public to petition HHS to withdraw or modify any particular guidance document, including where the guidance document creates binding obligations that go beyond what is required under applicable statutes or regulations.14

    Clear instructions on how to petition for review would be posted in the guidance repository, as well as all responses to such petitions.15

    Conclusion: Practical Takeaways

    Health care providers often comply with subregulatory guidance as a matter of best practice, but the legal authority of these documents is often uncertain. The proposed rule will clarify these important questions and afford providers greater flexibility in structuring their operations in a way that complies with all actual legal requirements.

    Because traditional regulatory procedures are not covered by the proposed guidance documents rule, there should be no effect on the timing and operation of those rulemaking processes.

    While the proposed rule could have a significant impact on a wide array of health care providers, the practical effect could be muted when it comes to CMS’s direct regulation of the Medicare program. Many health care entities sign a provider agreement when enrolling in the Medicare program, under which they agree to be bound by CMS’s manuals and other subregulatory guidance.

    As stated above, the proposed rule requires that guidance documents be labeled as non-binding “unless specifically incorporated into a contract.” Commenters have expressed concern that this exception will effectively nullify the rule.16 How HHS comes down on this issue will be important.

    Remember to connect to the Health Law Section virtual happy hour 5 p.m. to 6 p.m. on Friday, Nov. 6, 2020. Join us on Zoom, with meeting ID 980 3102 6359.


    1 Executive Order 13891 of Oct. 9, 2019, Promoting the Rule of Law Through Improved Agency Guidance Documents, 84 Fed. Reg. 55,235 (Oct. 15, 2019).

    2 Dept. Health & Human Services Proposed Rule on Good Guidance Practices, 85 Fed. Reg. 51,396 (Aug. 20, 2020)

    3 Id. at 51,396.

    4 Executive Order 13891 required that all agencies finalize regulations or amend existing regulations as necessary, within 300 days after the Office of Management and Budget (OMB) issued a memorandum to implement the Executive Order. 84 Fed. Reg. at 55,237. That memo was issued Oct. 31, 2019. OMB Guidance Memorandum M-20-02 (Oct. 31, 2019).

    5 Proposed Rule, 85 Fed. Reg. at 51,396 and 51,400 (proposing this definition at the new 45 C.F.R. § 1.2).

    6 Id. at 51,396.

    7 Id. at 51,397 and 51,400.

    8 Id. at 51,400.

    9 Id.

    10 Id. at 51,397.

    11 Id. at 51,398.

    12 Id.

    13 Id.

    14 Id., at 51,399.

    15 Id.

    16 See, e.g.,Public Comment submitted by Cigna.​


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