Our Health Care and Health Care Litigation Groups examine a policy move by the Department of Health and Human Services (HHS) that will allow the department to forgo notice and comment procedures for many of its regulations.
- Revokes the Richardson Waiver, meaning HHS will no longer be required to use notice and comment procedures for rules affecting public property, loans, grants, benefits, or contracts
- Indicates HHS seeks to more expeditiously change regulations and will no longer use the “good cause” exception to notice and comment “sparingly”
- Could significantly impact many HHS programs, but Medicare includes its own rulemaking process requirements
Since 1971, the Department of Health and Human Services (HHS) has used notice and comment rulemaking procedures for regulations relating to public property, loans, grants, benefits, or contracts. This operational policy, known as the Richardson Waiver, waived the statutory exemption in the Administrative Procedure Act (APA) from notice and comment procedures for regulations related to these matters. HHS’s policy for the past half century has also been to use the APA’s “good cause” exception to such procedures “sparingly.”
In a policy statement published in the March 3, 2025 Federal Register, HHS rescinded the Richardson Waiver, effective immediately, meaning notice and comment rulemaking procedures will no longer be required for many regulations.
The HHS announcement tracks the APA’s statutory text, which says that notice and comment procedures do not apply to regulations relating to public property, loans, grants, benefits, or contracts. The Richardson Waiver applied the procedures as a matter of policy even though the APA did not require them. Recission of the Richardson Waiver may be most immediately significant in areas of HHS’s jurisdiction such as the National Institutes of Health (NIH) because rules for grants and contracts will now be easier for the agency to change. Rule changes for other types of HHS grants and contracts (such as those provided by the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Health Resources and Services Administration (HRSA)), as well as for Medicaid benefits, for example, could also be impacted.
The new policy position should have a lesser effect on rulemaking related to benefits under Medicare because the Medicare statute has its own independent notice and comment requirements (which in some cases are more stringent than the APA’s). These requirements were at issue in Azar v. Allina Health Services, in which the Supreme Court concluded that HHS had to follow the notice and comment process when issuing new substantive legal standards for Medicare. The Medicare Act rulemaking requirements continue to apply despite the rescission of the Richardson Waiver.
Good Cause
The APA has an exception to notice and comment requirements if an agency for “good cause” finds that notice and comment is “impracticable, unnecessary, or contrary to the public interest.” This is the exception that allows agencies to adopt interim final rules without first going through notice and comment. Courts have construed this exception very narrowly and have rejected arguments that an agency can avoid notice and comment simply because it thinks it is important to implement its Administration’s policy priorities (and contrary to the public interest not to implement those policy priorities). Otherwise, the exception would swallow the rule. The Richardson Waiver’s statement that the “good cause” exception would be used “sparingly” is consistent with this narrow construction of the exception.
Revoking prior policy that the “good cause” exception should be used “sparingly” suggests that HHS may seek to test the limits of the “good cause” exception, using it more often to justify expediting changes to Administration policy when notice and comment would otherwise be required. Recission of the Richardson Waiver also means more regulations can be changed without the need to determine whether “good cause” applies.
Recission
The APA generally requires agencies to follow notice and comment procedures when they rescind regulations.
The revocation of the Richardson Waiver means that more regulations may be rescinded without following notice and comment procedures. The expansion of HHS’s ability to rescind current rules without notice and comment is particularly noteworthy in light of the Trump Administration’s February 19, 2025 Executive Order, Ensuring Lawful Governance and Implementing the President’s “Department of Government Efficiency” Deregulatory Initiative, which directs all agencies, including HHS, to review all regulations for consistency with Trump Administration policy and to develop a regulatory agenda to rescind or modify these regulations. The revocation of the Richardson Waiver will make some HHS rules easier to rescind quickly.
Reliance Interests
Agency policy changes can be successfully challenged through litigation if the agency does not consider reliance interests that developed under the prior policy.
The HHS policy statement revokes a policy in place for 54 years and does not address reliance interests that may have developed over time (e.g., reliance on the fact that notice and comment procedures will be available in particular areas that now will not be subject to notice and comment). This or other theories may emerge to support challenges to the policy statement itself in addition to challenges to interim final rulemaking that exceeds the “good cause” exception for matters still requiring notice and comment.
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