According to a notice made public Feb. 28, 2025, the U.S. Department of Health and Human Services is reversing a 1971 policy decision whereby HHS voluntarily solicited the public’s views before issuing regulations related to its programs, even if it wasn’t required to. Buckle up — you can expect to see the agency make more decisions related to federal health care programs, especially Medicaid, without asking the public’s input beforehand.
Under the federal Administrative Procedure Act (APA), most federal agencies are generally required to provide the public with notice of regulations they intend to develop, allow the public to offer input on the proposed regulations, and then consider and respond to that input before issuing regulations in final form. (This process is generally referred to as “notice and comment rule making.”)
There are some exceptions within the APA itself from the notice and comment rule making requirements. The APA carves out from notice and comment requirements regulations related to “public property, loans, grants, benefits, or contracts.” With respect to regulations that deal with those particular matters, therefore, the APA does not require agencies to provide the public with an opportunity to provide input before issuing regulations related to them.
Over 50 years ago, HHS decided it would not rely on this exception. Instead, it would follow the APA notice and comment rule making requirements even with respect to the development of regulations related to public property, grants, contracts, loans and benefits. The rationale for that decision was that the benefits from having the public’s input outweigh the costs, resources, and time that notice and comment rule making entails.
Today’s policy shift will likely have significant impact on HHS programs, given those programs’ ties to contracts, grants and benefits. It’s likely now that regulations on these topics will no longer be developed through the notice and comment rule making process unless another statute — one other than the APA — requires it. The Medicare statute, for example, does require HHS to engage in a form of notice and comment rule making with respect to particular aspects of the Medicare program, including “benefits.” HHS, therefore, would still need to follow the Medicare statute’s notice and comment rule making requirements for those matters that are within the purview of the Medicare rule making requirement.
Going forward there will likely also be uncertainty about whether a regulation was properly within the narrow exception of the statute and could be properly issued without following APA notice and comment requirements. The terms in the phrase “personal property, loans, grants, benefits, or contracts” are not defined by the APA. Regulations that are not related to those particular matters are not covered by that exception and therefore would need to be developed through notice and comment rule making or risk be invalidated (unless, of course, another exception applies). Expect a lot of litigation on the promulgation of HHS rules.