HHS Rescinds Longstanding Policy Requiring Notice of Certain Regulatory and Policy Changes

Background

The U.S. Department of Health and Human Services (HHS or the Agency) announced on February 28, 2025 in the Federal Register¹ (the HHS Policy Statement) that it is rescinding an Agency policy that has been in place for more than 50 years regarding public participation in certain kinds of HHS rulemaking (the Richardson Waiver).² Per this policy, HHS waived the statutory exemption from procedural rulemaking requirements in the Administrative Procedure Act (APA) for “matter(s) relating to agency management or personnel or to public property, loans, grants, benefits, or contracts.”³ HHS’ departure from the Richardson Waiver means that, going forward, the Agency generally does not intend to engage in notice-and-comment rulemaking related to these enumerated types of matters, except as otherwise required by law.

HHS’ decision to rescind the Richardson Waiver may not, in our view, necessarily represent the end of notice-and-comment rulemaking by the Agency or the applicability of the APA to the activities of HHS agencies and offices (including the U.S. Food and Drug Administration, Centers for Medicare & Medicaid Services, Health Resources & Services Administration, Centers for Disease Control and Prevention, and National Institutes of Health, among others) for matters relating to agency management or personnel or to public property, loans, grants, benefits, or contracts.⁴ Importantly, it does not change HHS rulemaking obligations when otherwise specified in statute.⁵ However, we anticipate significant procedural changes and implications for stakeholder input and advocacy going forward in cases where the APA exemption applies.

We provide below an overview of HHS’ announcement and our initial impressions of the changed landscape. Given the wide range of potentially affected HHS agencies and offices, activities, rulemakings, and policies, Arnold & Porter plans to host a webinar for clients in the coming days to analyze in greater detail areas of particular interest for industry stakeholders.

The APA Framework

The APA establishes certain “notice-and-comment” procedures for the issuance of rules and regulations by federal agencies; in general, an agency is required to publish a notice of proposed rulemaking in the Federal Register; give interested persons an opportunity to participate in the rulemaking through the submission of written data, views, or arguments; and publish a final rule that is accompanied by a statement of its basis, its purpose, and the agency’s responses to the public comments.⁶ It also generally exempts from these procedures “matter(s) relating to agency management or personnel or to public property, loans, grants, benefits, or contracts”⁷ and permits an agency to forgo notice-and-comment requirements for “good cause” when the agency finds that the procedures are “impracticable, unnecessary, or contrary to the public interest” (the “Good Cause Exception”).⁸

The Richardson Waiver

In 1971, HHS adopted a policy that waived the APA’s statutory exemption from procedural rulemaking requirements for rules and regulations relating to public property, loans, grants, benefits, or contracts. In other words, HHS formally committed that it would use the APA’s notice-and-comment rulemaking procedures for these types of matters.⁹ The Richardson Waiver also instructed HHS employees to use the Good Cause Exception “sparingly.”¹⁰

What Appears to Have Changed

The HHS Policy Statement

HHS now takes the position that the Richardson Waiver “is contrary to the clear text of the APA and imposes on [HHS] obligations beyond the maximum procedural requirements specified in the APA.”¹¹ As support for its position, HHS cites the U.S. Supreme Court’s holding in Perez v. Mortgage Bankers Ass’n, that courts lack authority to impose obligations “beyond the ‘maximum procedural requirements’ specified in the APA.”¹² But the Richardson Waiver was not imposed by any court. Rather, it was an exercise of the Agency’s own discretion as contemplated by the APA itself, which sets a procedural floor rather than a ceiling. Indeed, the Richardson Waiver was HHS’ response to a 1969 recommendation by the Administrative Conference of the United States¹³ that agencies adopt such waivers to improve rulemaking.

Scope of Potential Impact

The HHS Policy Statement indicates that the Agency intends to follow the APA when required by the statutory text of the law, and that where no such express legal requirement applies, HHS agencies and offices have discretion to provide notice-and-comment procedures. It also states that, prospectively, HHS will use the exception “in appropriate circumstances[,]”¹⁴ potentially foreshadowing more aggressive use of the Good Cause Exception by the Agency.

The types of actions for which HHS has historically applied the Richardson Waiver are not immediately identifiable, because while the policy was in effect (and notice-and-comment rulemaking requirements broadly applied), there was no need for HHS or stakeholders to make such distinction in the administrative record or elsewhere. Accordingly, there is little precedent to suggest which existing and/or future Agency rulemakings, requirements, and/or other statements of policy will be directly impacted by the policy change.

Relatedly, the scope of impacted Agency activities will be largely driven by which matters HHS considers to be related to “public property, loans, grants, benefits, or contracts,” and whether and to what extent the Agency invokes the Good Cause Exception. It seems clear, however, that the intent of the HHS Policy Statement is to enable the administration to adopt major policy changes more quickly, with limited stakeholder input and transparency. To that end, we expect HHS’ interpretation of these key variables to be consistent with this strategy.

What Appears Unchanged

Where the APA itself does not apply, there are other statutes and legal requirements that still mandate compliance with APA procedural requirements in certain circumstances. Indeed, some HHS actions that would not need to go through notice-and-comment rulemaking under the APA may be required to do so in accordance with applicable statutory requirements. For example, as the U.S. Supreme Court held in 2019, though notice-and-comment rulemaking is not required pursuant to the APA, Section 1871 of the Social Security Act separately mandates it for any Medicare “rule, requirement, or other statement of policy” that establishes or changes a “substantive legal standard” governing the scope of benefits, payment for services, eligibility of individuals to receive benefits, or eligibility of individuals, entities, or organizations to furnish services.¹⁵

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HHS’ abrupt reversal of its longstanding policy regarding public participation in Agency rulemaking, and how it may affect the opportunities for stakeholder engagement the life sciences and healthcare industry has become accustomed to over the past half century, will require increased diligence regarding the substance of, and procedural standards applicable to, rules, requirements, and other statements of policy issued by HHS’ agencies and offices. Moreover, in some cases, the changed landscape may necessitate an increased willingness by industry to challenge such actions. We look forward to considering the potential implications of HHS’ shift in policy with you during our upcoming webinar. If you have any questions or would like to discuss these issues further in the meantime, please do not hesitate to reach out to a member of our team.

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.