DEPARTMENT OF HEALTH AND HUMAN SERVICES

Statement of Regulatory Priorities for Fiscal Year 2019

The Department of Health and Human Services (HHS) carries out a wide array of activities in order to fulfill its mission of protecting and promoting the health and well-being of the American people. From supporting cutting-edge research and disease surveillance, to regulating products and facilities, to administering programs that help our citizens most in need of access to healthcare and social services, HHS's work has a clear impact on the daily life of all Americans. As the federal agency most deeply involved in more than one-sixth of the US economy, it is imperative that HHS be attentive to the costs of over-regulation. Building on the progress that HHS has made in Fiscal Year 2018, the Department will continue to find ways to clarify its regulations to ease the burden of public compliance, or to remove them where feasible to avoid unnecessarily diverting resources from the private sector while simultaneously ensuring the integrity of HHS programs.

HHS is committed to a regulatory agenda that is focused on better meeting the needs of the individuals served by its programs, informed by an understanding that excess and unclear federal regulation not only imposes serious burdens on job creation and the economy as a whole, but also that the opportunity costs from overregulation dampen provider productivity and medical product innovation, which undermines HHS's own ultimate core mission. Through its rulemakings in the coming fiscal year, HHS will take concrete steps towards reducing and streamlining its regulations and improving the transparency, flexibility, and accountability of its regulatory processes.

I. Advancing Secretary Azar's Priorities through Rulemaking

Since his confirmation as the twenty-fourth Secretary of Health and Human Services in January 2018, Secretary Alex Azar has focused the Department's efforts on four priorities. These initiatives-combatting the opioid crisis; increasing the affordability and accessibility of individual health insurance; tackling the high cost of prescription drugs; and moving to a value-based healthcare system-renew the substantial efforts made by the Department in these areas over the past year and a half and have the potential to deliver lasting change across America's healthcare system.

Combatting the Opioid Crisis

One of the most pressing public health problems of our time, the opioid crisis has steadily grown over the past several decades and is now impacting communities across the country. In addition to providing unprecedented levels of support for states, local governments, and community organizations working to combat this crisis, HHS is exploring ways to enhance our nation's response through critically examining its regulations. To reduce opioid misuse without restricting access to legitimate services, Medicaid programs can utilize several medical management techniques, including quantity limits of short-acting and long-acting opioids. The President's FY 2019 Budget includes a proposal that would establish minimum standards for Medicaid Drug Utilization Review programs. Currently, CMS does not set minimum requirements for these programs, and there is substantial variation in how states approach this issue. Establishing minimum standards would not only help increase oversight of opioid prescriptions and dispensing in Medicaid, but would save the program an estimated $245 million over 10 years.

Additionally, the Substance Abuse and Mental Health Services Administration (SAMHSA) is considering updating its regulations governing medication-assisted treatment for opioid use disorders (OUD) by deleting outdated provisions and revising reporting requirements for providers with waivers to treat up to 275 patients with OUD. SAMHSA will also provide guidance and consider additional changes to 42 CFR Part 2 that can foster further alignment with the Health Insurance Portability and Accountability Act (HIPAA). Furthermore, although many covered entities believe that the HIPAA Privacy Rule precludes such disclosures, the Office for Civil Rights (OCR) plans to propose a rule clarifying the Privacy Rule provisions most applicable to information sharing with family members or others when patients are incapacitated. This would reduce uncertainties about the ability of covered entities to disclose patient information to family members, friends, or others best positioned to help individuals suffering with a substance use disorder or serious mental illness.

Strengthening Individual Health Insurance Programs

In addition, strengthening program integrity with respect to subsidy payments in the individual markets is a top priority of this Administration. In furtherance of that goal, the Centers for Medicare & Medicaid Services (CMS) will publish an Exchange Program Integrity rule focusing on ensuring that eligible enrollees receive the correct advanced payments of the premium tax credit, conducting effective and efficient oversight of State-Based Exchanges, and protecting the interests of taxpayers, consumers, and the financial integrity of Federally Facilitated Exchanges. CMS, through its annual Payment Notice for the Exchanges, will also emphasize deregulation and increasing flexibility for states and issuers. CMS will continue to work with the Tri-Departments to explore allowing more flexibility in the availability of health plans in the individual and small group markets, as well as carrying out the instructions in the President's October 12, 2017, Executive Order to consider expanding the use of health reimbursement arrangements (HRAs).

HHS' forthcoming report on promoting competition and choice will also inform HHS' efforts in this area and help drive positive change.

These initiatives will help restore market forces to ensure consumers have plans to choose from that meet their needs.

Tackling the High Cost of Prescription Drugs

In May 2018, Secretary Azar unveiled the President's blueprint to tackle the high cost of prescription drugs, American Patients First. HHS is aggressively working on actions the President may direct HHS to take immediately as well as the consideration of actions on which feedback was solicited in the blueprint. As a part of this ongoing effort, the Food and Drug Administration (FDA) plans to propose regulations to facilitate access to more treatments for common conditions and potentially some chronic conditions by using innovative approaches, including new technologies, to assist consumers in self-selection and use of drug products that have previously been available only by prescription. If finalized, FDA believes this rule will improve public health and lower costs by increasing the number and types of medications that are available without a prescription. Changes CMS plans to make in its annual Part C and D rules, and potentially other mechanisms, are likewise seeking to improve health and lower costs for American patients.

Transforming Our Healthcare System into One that Pays for Value

Over the years, it has become increasingly apparent that the United States' fee-for-service payment system does not incentivize innovative therapies and intelligent treatment plans for patients. Previous Congresses and administrations have attempted to alleviate these problems through patchwork attempts at introducing innovative payment models. Now, under Secretary Azar's leadership, HHS will undertake efforts to comprehensively address this issue and attempt to rebuild our healthcare system into one that truly incentivizes effective, efficient patient care by paying for value. As an early step in this effort, CMS plans to propose regulatory revisions to address the impact of the physician self-referral (commonly known as "Stark") law and encourage coordinated care. Additionally, OCR will be examining the HIPAA rules for obstacles that may limit or discourage coordinated care or otherwise impose regulatory burdens that may impede the transformation to value-based healthcare, without providing commensurate privacy or security protections for patients' protected health information (PHI). HHS' forthcoming report on promoting competition and choice will also inform HHS' efforts in this area and help drive positive change.

II. Empowering the American People through Reducing Regulatory Burden and Clarifying Regulation

In addition to these four priorities, HHS has been comprehensively reviewing its regulations to find ways to reduce burdens on states, grantees, industries, and individuals. Regulatory burden can result from a variety of sources, including reporting requirements, outdated restrictions, requirements and/or conditions not required by the authorizing statutes, and a lack of clear regulatory guidelines. HHS is committed to streamlining and clarifying its regulations to reduce unnecessary burden while continuing to protect the public health and to meet the human services needs of the American people.

Minimizing Duplicative Requirements and Eliminating Obsolete Regulations

The Department recognizes the burden that requirements for many of its programs place on states, territories, tribes, local governments, industry, providers and facilities, caseworkers, grant recipients, and individuals. HHS plans to actively engage stakeholders in transparent, deliberative processes to ensure that the Department reduces burden while continuing to administer high-quality programs. For example, the Administration for Children and Families (ACF) plans to issue a Notice of Proposed Rulemaking seeking public comment on its proposal to streamline the Adoption and Foster Care Analysis and Reporting System (AFCARS), which doubled reporting requirements for states and tribes. Through careful consideration of all comments submitted by the public to its Advanced Notice of Proposed Rulemaking issued in March 2018, ACF believes it can streamline the 2016 Rule so that state and tribal IV-E agencies are able to devote less time and fewer resources to administrative work and to redirect those efforts to the children they serve.

In addition to minimizing regulatory burden, HHS realizes that many of its regulations may contain provisions that are outdated, obsolete, or otherwise not applicable to the current environment. HHS has resolved to reform its processes so that those providing care and other services to Americans are able to thrive within the state and federal regulatory environment. As an early step in this broader effort, CMS plans to issue a proposed rule that will remove unnecessary and outdated requirements from the conditions of participation for the Medicare and Medicaid programs for Long-Term Care facilities. Currently, these requirements often impede the delivery of quality care and divert resources away from facility residents.

Providing Necessary Regulatory Clarity to Industry Stakeholders

As part of efforts to streamline regulation, in some cases, regulation is necessary in order to make HHS's processes transparent and predictable. This year, FDA plans to continue work on needed implementing regulations for its tobacco program. Rulemaking is needed to clarify for industry the submission and review processes for various review pathways as part of a comprehensive framework to regulate nicotine and tobacco and advance the public health. In addition, FDA is updating important rules for medical device applications so the rules reflect risk-based and least burdensome pathways to market for devices, including new and innovative devices. These rules will fill gaps to ensure that manufacturers in these sectors know how to bring innovative products to market that may save lives or reduce health risks. FDA intends to continue rulemaking this fiscal year to fill these regulatory gaps so that these processes become more fair, efficient, and predictable.

Protecting the Exercise of Conscience Rights

Religious and faith-based organizations and individuals have historically played an important role in providing needed health care and human services. However, regulatory and other burdens on religious freedom and conscience that discourage such organizations and individuals from participating in HHS programs have been often overlooked in recent years. HHS has taken a number of steps to rectify the situation in the past year and plans to continue work to ensure that HHS's programs respect religious liberty and conscience-and to relieve burden on the exercise of religion and conscience. In order to adequately protect these First Amendment and statutory rights, HHS plans to complete a rulemaking to implement and enforce a number of HHS-specific conscience laws and protections, in order to help ensure that individuals participating in HHS-funded health programs are aware of their conscience rights, that recipients of HHS funds comply with their obligations to respect such rights, and that there are enforcement procedures for such conscience protections that are comparable to other civil rights. Additionally, in finalizing its update to the Title X family planning regulations, HHS plans to ensure that the conscience rights of Title X providers are respected.

III. Harnessing Regulatory Reform to Encourage Innovation

In addition to reducing burden, an important outcome of regulatory reform efforts is the proliferation of innovative solutions and programs structured to suit the needs of unique problems and populations. HHS is committed to promoting innovation through a variety of mechanisms, including deregulatory actions.

Promoting Flexibility for States, Grantees, and Regulated Entities

HHS intends to enhance regulatory flexibility so that its state and community partners are able to better tailor their programs to meet the needs of the people they serve. Over the past year and a half, the Department has been looking seriously at its programs to see how it can maximize the number of people reached through amending its regulations to remove or change regulatory limitations on grantees and regulated entities. For example, ACF plans to consider revising minimum service duration requirements for Head Start center-based programs to allow these programs to serve more children or better meet the needs and daily schedules of local families. Rulemaking carried out in 2016 nearly doubled the current minimum.

Keeping Pace with 21^st Century Science

In order to best respond to the needs of patients, it is crucial that HHS regulations and programs reflect current science. HHS is fulfilling this need by updating regulations so that the Department can utilize the full spectrum of current scientific thinking when carrying out program activities. Specifically, HRSA plans to revise the Vaccine Injury Table to include vaccines that the Centers for Disease Control and Prevention (CDC) recommends for administration to pregnant women. This revision will allow injuries related to these vaccines to be eligible for the National Vaccine Injury Compensation Program. Additionally, FDA intends to propose a new rule that will modernize mammography quality by recognizing new technologies, making improvements in facility processes, and updating reporting requirements. FDA believes that these changes will improve the delivery of mammography services and allow for more informed decision-making by strengthening the communication of health care information.

FDA is also taking action to facilitate food innovations that can give consumers more choices and enable better nutrition. Diet is a powerful tool for reducing chronic disease and its impact on the healthcare system. Modernizing the outdated framework for food standards will allow industry flexibility for innovation to produce more healthful foods while maintaining the basic nature and nutritional integrity of key food products. FDA will reopen the comment period on its earlier proposed rule soliciting updated information to guide development of a modern approach to regulating food standards and related labeling.

Summary

In the coming fiscal year, HHS plans to consider a number of deregulatory actions, accompanied by regulatory changes intended to make its processes more flexible, efficient, and transparent. In order to fully realize the potential of these efforts, HHS recognizes the need for a collaborative rulemaking process where the concerns of patients, providers, States, tribes, faith-based and community organizations, and other stakeholders are appropriately considered. By working with its partners in bringing better healthcare and human services to the American people, and understanding the challenges that they face under HHS's current regulatory structures, the Department will continue to modernize its role in this critical sector of the national economy, assuring its vitality and the increased wellbeing of those it serves.