I. Statement of Commitment to a Culture of Ongoing Retrospective Review
The Department of Health and Human Services (HHS) is the principal federal agency charged with providing health and other essential human services so Americans can live healthier, more prosperous, and more productive lives. Many of its activities are regulatory in nature. Through the Food and Drug Administration, HHS regulates the safety of the food we eat, the drugs we take to improve our health, and the medical devices we rely on for diagnosis and treatment of disease. HHS’s Medicare and Medicaid programs insure one in four Americans and issue guidance on who can receive health services and the conditions health care providers must meet to participate and receive payment. HHS’s Agency for Children and Families provides guidance and funds to state, territory, local, and tribal organizations so they can provide family assistance, child support, child care, Head Start, child welfare, and other programs relating to children and families. Other regulatory offices within HHS have responsibility for oversight of health information privacy and meaningful use of electronic health and medical records, protection of human subjects for research, and oversight of health insurance rate review and affordable insurance exchange requirements.
In Executive Order 13563, the President recognized the importance of a streamlined, effective, efficient regulatory framework designed to promote economic growth, innovation, job-creation, and competitiveness. The very first paragraph of that Order sets out the President’s regulatory priorities:
- To protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation;
- To base regulation on the best available science;
- To allow for public participation and an open exchange of ideas;
- To promote predictability and reduce uncertainty;
- To identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends;
- To take into account benefits and costs, both quantitative and qualitative;
- To ensure that regulations are accessible, consistent, written in plain language, and easy to understand; and
- To measure, and seek to improve, the actual results of regulatory requirements.
While regulations can establish clear and transparent frameworks for competition and economic activity, unnecessary and duplicative regulations can also damage the market economy by imposing unnecessary costs on the private sector and citizens.
To achieve a more robust and effective regulatory framework, the President has directed each executive agency to establish a plan for ongoing retrospective review of existing significant regulations to identify those rules that can be eliminated as obsolete, unnecessary, burdensome, or counterproductive or that can be modified to be more effective, efficient, flexible, and streamlined. In the President’s own words:
“[W]e are seeking more affordable, less intrusive means to achieve the same ends—giving careful consideration to benefits and costs. This means writing rules with more input from experts, businesses, and ordinary citizens. It means using disclosure as a tool to inform consumers of their choices, rather than restricting those choices. And it means making sure the government does more of its work online, just like companies are doing.”
“Toward a 21st-Century Regulatory System,” The Wall Street Journal, Opinion by Barack Obama.
HHS is committed to the President’s vision of creating an environment where agencies incorporate and integrate the ongoing retrospective review of regulations into Department operations to achieve a more streamlined and effective regulatory framework. The objective is to improve the quality of existing regulations consistent with statutory requirements; streamline procedural solutions for businesses to enter and operate in the marketplace ; maximize net benefits (including benefits that are difficult to quantify); and reduce costs and other burdens on businesses to comply with regulations.
HHS’s retrospective review plan has five principal goals:
- Streamline or eliminate unjustified costs and burdens;
- Increase transparency in the retrospective review process;
- Increase opportunities for public participation;
- Set clear retrospective review priorities; and
- Strengthen analysis of regulatory options.
While HHS’s systematic review of regulations will focus on the elimination of rules that are no longer justified or necessary, the review will also consider strengthening, complementing, or modernizing rules where necessary or appropriate—including, if relevant, undertaking new rulemaking.
Among the highlights of this plan are reforms, completed or proposed, that will save hundreds of millions of dollars annually. In a major initiative, for example, CMS has conducted a retrospective review of the conditions of participation it imposes on hospitals to remove or revise obsolete, unnecessary, or burdensome provisions. The goal of the retrospective review is to identify opportunities to improve patient care and outcomes and reduce system costs by removing obsolete or burdensome requirements. CMS intends to publish a proposed rule on this subject in September 2011 and currently estimates that the revisions may save as much as $600 million annually and $3 billion over five years. A related reform from CMS, described in detail on page 16, may save as much as $200 million. Additionally, CMS has also recently issued a final rule to permit hospitals to use telemedicine to obtain services from a practitioner credentialed at a distant hospital so long as the distant hospital is also a Medicare participating entity and there is a written telemedicine agreement in place between hospitals. This change will improve the ability of rural and critical access hospitals to provide a broader spectrum of care and services to their patients and, by not requiring providers to be credentialed by every facility in which they are providing a service via telemedicine, it will reduce provider burden. CMS estimates that roughly $13.6 million in annual net savings to hospitals will result from this initiative, which it published as a final rule on May 5, 2011.
HHS emphasizes that Executive Order 13563 calls not for a single exercise, but for “periodic review of existing significant regulations,” with close reference to empirical evidence. It explicitly states that “retrospective analyses, including supporting data, should be released online wherever possible.” Consistent with the commitment to periodic review and to public participation, HHS will continue to assess its existing significant regulations in accordance with the requirements of Executive Order 13563. HHS welcomes public suggestions about appropriate reforms. If, at any time, members of the public identify possible reforms to streamline requirements and to reduce existing burdens, HHS will give those suggestions careful consideration.