HHS scraps transparency practices for policymaking

The Health and Human Services Department is abandoning a Nixon-era practice that offered transparency into federal policymaking in a move that limits the public and the healthcare sector's ability to influence government actions.

Instead, HHS intends to comply with the bare-minimum requirements of the Administrative Procedures Act of 1946, or APA, and only engage in the traditional notice-and-comment process as expressly dictated by that law, Secretary Robert F. Kennedy Jr. wrote in a policy statement published Friday. HHS had followed the now-defunct guidelines for 54 years.

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Kennedy's weakened transparency dictate applies at least to “agency management or personnel or to public property, loans, grants, benefits or contracts,” he wrote in the statement, which will appear in the Federal Register on Monday. HHS can skip notice and comment if it determines that process would be unnecessary, impractical or “contrary to the public interest,” he wrote.

“The department will continue to follow notice-and-comment rulemaking procedures in all instances in which it is required to do so by the statutory text of the APA,” Kennedy wrote. HHS did not respond to a request for comment.

Kennedy's decision to end public notice and comment on many policies contrasts with a vow he made during a speech to HHS employees on Feb. 18, five days after the Senate confirmed him. “We’re going to work together to launch a new era of radical transparency,” he said. "Transparency allows diverse parties to establish common ground of mutually trusted information.”

HHS and its agencies have made a flurry of changes to how they conduct business in the weeks since President Donald Trump returned to the White House, which accumulate to create obstacles for the public to engage with regulators.

That includes a freeze on HHS communications, along with a slew of canceled public meetings on topics such as flu vaccine development. The White House seeks to reduce regulations by requiring any new policies to be offset by eliminating 10 rules or portions of rules, guidances, and memoranda. Trump's billionaire adviser Elon Musk and his team also are eliminating tens of thousands of federal jobs.

Expediting major policymaking in these ways will facilitate HHS rescinding grants and enacting significant changes to how healthcare is governed and financed without allowing citizens, businesses and other organizations to weigh in, said Claire Ernst, director of government relations and public policy for the law and lobbying firm Hooper, Lundy & Bookman.

The Kennedy rule appears to “clear the runway for broader deregulatory action,” Ernst said.

At the same time, HHS is inviting legal challenges to policies carried out without public participation, said Steve Hamilton, a partner at the law and lobbying firm Reed Smith.

The scope of the new policymaking process isn't entirely clear despite Kennedy's notice listing examples, said Daniel Graham, a partner at the law and lobbying firm McDermott Will & Emery. HHS agencies will determine on a case-by-case basis when they must submit proposals for public review, he said.

For some key Centers for Medicare and Medicaid Services regulations, the underlying statutes plainly state that notice and comment is mandatory.

For example, Medicare reimbursement rules such as the Physician Fee Schedule require 60-day comment periods before the agency can finalize them. Likewise, CMS annually issues an advance notice laying out its Medicare Advantage policies for the coming year, which is subject to a minimum 30-day comment period.

The applicability of the Kennedy rule to HHS contracts seems to vary, Graham said. For instance, policies related to Medicare claims processing contractors, claims appeals and fraud control are attached to congressionally mandated notice-and-comment periods, he said. HHS will have to evaluate other programs based on the statutes that authorized each of them, he said.

The Administrative Procedures Act does not expressly require a public process for policies such as grant distribution and contract creation, but the Health, Education and Welfare Department — as HHS was known before the creation of the Education Department in 1979 — went further under President Richard Nixon and retained higher transparency standards until Trump's second term.

“The public benefit from such participation should outweigh any administrative inconvenience or delay which may result from use of the APA procedures,” then-Health, Education and Welfare Assistant Secretary for Administration Rodney Brady wrote in a Federal Register notice published on Feb. 5, 1971.