Regulatory Relief Outlook for 2017

A closer look at activities tied to President Donald J. Trump's agenda
One of President Donald J. Trump's first acts in office was to sign an executive order on "Reducing Regulation and Controlling Regulatory Costs." The White House has since made it clear that a major component of Mr. Trump's agenda involves reducing, streamlining, and repealing burdensome regulations across the board.


Segments of President Donald J. Trump's agenda focuses on regulatory relief, which will have various impacts on healthcare and related policy.
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www.flickr.com/photos/whitehouse

The component of this particular executive order that received the most attention was the clause requiring that "whenever an executive department or agency publicly proposes for notice and comment or otherwise promulgates a new regulation," it must identify at least two existing regulations to be repealed. Given its broad scope, opponents of the two-for-one order eventually prompted further clarification from the White House, asking if the requirements apply to either regulatory actions or significant guidance documents. The White House explained that the required deregulatory action could be satisfied in a number of ways beyond simply repealing an existing regulation. Despite this clarification, the order's broad scope has prompted a lawsuit by the National Resources Defense Council, among other plaintiffs.

The next step in Mr. Trump's regulatory relief agenda came in the form of another executive order, "Enforcing the Regulatory Reform Agenda," which was released Feb. 24 and required each federal agency head to appoint both a Regulatory Reform Officer (RRO) and establish a Regulatory Reform Task Force. The deadline for the appointment of both the RRO and the task force was April 25, although only a few appointments have been publicly announced as of July. Once appointed, the RROs and task forces had an additional 30 days (from April 25) to provide a report to the agency head detailing the agency's progress.

Both entities are tasked with identifying regulations for reconsideration or repeal that meet the following requirements:

  • Eliminate jobs or inhibit job creation
  • Are outdated, unnecessary, or ineffective
  • Impose costs that exceed benefits
  • Create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies
  • Are inconsistent with the requirements of section 515 of the Treasury and General Government Appropriations Act, 2001 or the guidance issued pursuant to that provision, in particular, those regulations that rely in whole or in part on data, information, or methods that are not publicly available or that are insufficiently transparent to meet the standard for reproducibility
  • Derive from or implement executive orders or other presidential directives that have been subsequently rescinded or substantially modified

After the April 25 deadline passed with little action, the Office of Management and Budget (OMB) then issued a new guidance document setting additional requirements for the applicable agencies (including Health and Human Services) as well as a waiver process for an "agency that generally issues very few or no regulations."

On April 7, Mr. Trump appointed Neomi Rao, an administrative law expert, as the Administrator of the Office of Information and Regulatory Affairs, OMB. She is considered by some as a key figure in Mr. Trump's plan to drastically reduce regulatory burdens.

Along with the more macroscopic view of Mr. Trump's executive orders, recently appointed department heads have taken their own steps to effect regulatory relief.

In a March 16 statement on Mr. Trump's budget blueprint, Health and Human Services Secretary Tom Price, MD, expressed his commitment to "streamlining [the] activities at our agencies to ensure we are providing the highest level of service possible and not duplicating efforts."

In addition to Dr. Price's commitment, in the absence of an Affordable Care Act (ACA) repeal-and-replace bill, focus has turned to how he can provide regulatory relief in the interim from the more burdensome aspects of the ACA.

One additional factor that could affect any regulatory relief effort is the White House's federal hiring freeze, which was issued Jan. 23. Although OMB Director Mick Mulvaney started transitioning the federal agencies out of the hiring freeze on April 12 with the issuance of an OMB memo, the guidance set June 30 as the deadline for agencies to present the OMB with a "high-level draft of their Agency Reform Plan" as well as to demonstrate "progress on near-term workforce reduction actions."

At the agency level, Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma has also made clear her own commitment to reducing the regulatory burden on the healthcare system. During her confirmation hearing, Ms. Verma voiced regret for the "number of costly and time-consuming burdens" physicians are under.

As a key player in the future second stage of the Republicans healthcare reform timeline, Ms. Verma has promised "to help undo the damage" of the ACA, which the CMS administrator is critically positioned to help implement or hinder. As part of its efforts to undo the ACA, CMS took two key actions: first, it issued its final market stabilization rule on April 13; and, second, it followed Dr. Price's lead by issuing its own guidance on Section 1332 state waivers to provisions of the ACA.

Scott Gottlieb, MD, the new commissioner of the Food and Drug Administration (FDA), also outlined a number of regulatory action items that he intends to pursue this year. Recently, Dr. Gottlieb expressed his intention to release a drug competition plan to tackle the issue of high-priced prescription drugs.

During a May 25 hearing on the FDA's budget, Dr. Gottlieb listed high-priced prescription drugs among his top three priorities as the new agency head. The FDA's funding has become its own obstacle to regulatory relief as Congress and the White House have disagreed over Mr. Trump's proposal to dramatically cut dedicated appropriations for the agency along with substituting higher user fees (through the various user fee acts up for reauthorization this year).

In addition to drug prices, Dr. Gottlieb pledged action on another element of Mr. Trump's larger agenda—battling the opioid epidemic. On May 23, Gottlieb established an internal agency steering committee to "explore and develop additional tools or strategies FDA can use to confront [the] crisis."

For the remainder of the year, healthcare regulatory relief will most likely be devoted primarily to the key items Mr. Trump ran on during his campaign, including the following:

  • ending or fixing the ACA
  • addressing the worsening opioid epidemic
  • reigning in prescription drug prices
  • reducing the regulatory burden on doctors and small businesses

The difficulty Congress has faced passing an ACA repeal bill makes any regulatory actions even more important to a young administration looking to provide regulatory relief to patients and doctors.

Matthew Snider is the regulatory advocacy coordinator in the AAOS office of government relations. He can be reached at snider@aaos.org.

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