How Can Trump Administration Regulations Be Reversed?

With the inauguration of President Biden and Democrats holding a slim majority in Congress, policymakers are likely to consider whether and how to reverse various health policy regulations issued by the Trump Administration. As with other recent outgoing administrations,1 the pace of regulatory activity accelerated in the last several months, with the Trump Administration finalizing a number of new regulations in its last days. Rule-making by federal agencies is governed by the Administrative Procedure Act (APA),2 which generally requires a notice of proposed rule-making (NPRM) followed by a public comment period.3 The agency then responds to comments and issues a final rule, with a future effective date.4 An exception to this process is an interim final rule, which requires the agency to find “good cause” to adopt a rule that takes effect immediately, before notice and comment; the agency subsequently considers public comments and may make changes when finalizing the rule.5 Final regulations generally can be rescinded or altered only by issuing a new NPRM, in which the agency provides a reasonable justification for the policy change.6

Some additional processes, including the Congressional Review Act (CRA) and executive orders imposing a temporary moratorium on regulations in progress,7 may come into play when a new Congress and Presidential Administration take office, particularly when the outgoing Congress and/or Presidency was headed by the opposite political party. This brief explains options for rescinding or changing regulations at various stages8 and identifies some of the key candidates within health care that policymakers may be considering in the coming days, weeks, and months. Table 1 summarizes the processes available to change regulations, under either the CRA or administratively, from the perspective of a new presidential administration taking office.

Table 1:  Processes Available to Change Regulatory Actions of Prior Administration
Status Congressional Review Act Administrative Action
Regulation is finalized and in effect Regulation can be nullified by joint notice of disapproval passed by Congress and signed by President within limited timeframe. Agency must issue new NPRM to change regulation.
Regulation is published as final in the Federal Register but not yet in effect Regulation can be nullified by joint notice of disapproval passed by Congress and signed by President within limited timeframe. Historically, new administrations have directed agencies to suspend effective dates for a limited period of time. During this delay, the new administration can assess whether to issue a new NPRM or take other action under the APA.
Regulation was sent to the Federal Register for publication as final but has not yet been published Regulation can be nullified by joint notice of disapproval passed by Congress and signed by President within limited timeframe. New administration can order agencies to withdraw final rules that have not yet been published (except for those needed to comply with legal deadlines or necessary for public health and safety).
Regulation is proposed and has not been finalized CRA does not apply. New administration can withdraw proposed regulation.
Executive order issued by prior administration CRA does not apply. New administration can revoke executive orders.
NOTE:  Congressional Review Act and Administrative Action are separate processes that are independent of each other. SOURCES:  CRS, The Congressional Review Act:  Frequently Asked Questions (updated Jan. 14, 2020); Maeve P. Carey, CRS Insight, Can a New Administration Undo a Previous Administration’s Regulations? (Nov. 21, 2016); Anne Joseph O’Connell, Agency Rulemaking and Political Transitions, 105 Northwestern Univ. L. Rev. 471 (2011); CRS, Disapproval of Regulations by Congress:  Procedure Under the Congressional Review Act (Oct. 10, 2001).

1.  How can regulations be overturned using the Congressional Review Act?

The 1996 Congressional Review Act (CRA)9 allows Congress, with the President’s signature, to “disapprove” new regulations issued by administrative agencies, leaving those regulations with “no force or effect.”10 Under the CRA, whenever federal agencies issue new regulations, they must submit a report on the regulations to both the House and Senate before the regulations take effect.11 Members in either chamber then have 60 days12 to introduce a “joint resolution of disapproval,” which must be passed by both the House and the Senate and signed by the President. Notably, a new CRA review period opens for a new Congress for any regulations submitted during the final 60 working days of the prior Congress. Unlike other legislation by which Congress might overturn a regulation, CRA joint resolutions of disapproval cannot be filibustered in the Senate and require only a simple majority vote to pass, making it an attractive option for policymakers.13 A two-thirds majority vote in both chambers is still required to override a presidential veto of the joint resolution. The definition of a “rule” to which the CRA applies is broader than final regulations that were subject to notice and comment rule-making.14 The CRA also applies to interim final rules and agency guidance.15 However, it does not apply to proposed rules that have not been finalized16 (Table 1).

While the CRA is always available to Congress, it is of particular interest when a new Congress and President take office because it provides an opportunity for the new Congress to review certain regulations issued by the previous administration that were submitted before the previous Congress adjourned.17 This provides an opportunity for a new Congress and Administration to nullify regulations issued by a prior Administration, particularly where the prior Administration was headed by the opposite political party. The 60-day time period that governs which regulations are subject to CRA review refers to legislative days in the House and session days in the Senate (each of which are counted differently), and therefore can be longer than 60 calendar days.18 For regulations issued by the outgoing Trump Administration, the CRA window for the new Congress is estimated to apply to those issued on or after August 21, 2020, though that date is awaiting formal confirmation by the House and Senate Parliamentarians.19

Though it has some procedural advantages, the CRA is a blunt instrument, not only invalidating the regulation at issue but also preventing the agency from issuing another regulation that is “substantially the same,” unless specifically authorized by Congress in a subsequent law.20 Unlike other legislation targeting regulations, which can be used to modify or repeal part of a rule, the CRA only allows Congress to invalidate a final rule in its entirety.21 Moreover, CRA action disapproving a regulation generally foreclosures subsequent rule-making that is substantially similar. There is not a lot of clarity on when subsequent regulations are substantially similar to those nullified under CRA, as the statute does not define this term, and courts have not had much opportunity to weigh in to date. Additionally, the statute does not specify who makes the determination about whether a subsequent regulation is substantially similar, creating additional ambiguity and uncertainty.

Since it was enacted in 1996, the most extensive use of the CRA to date was by the Republican-controlled 115th Congress and President Trump, who in 2017, nullified 15 rules issued by the Obama Administration.22 These included Department of Health and Human Services (HHS) regulations governing sub-recipients of Title X family planning grants, as well as regulations that had been issued by the Departments of the Interior, Defense, Education, and Labor; the Securities and Exchange Commission; the Social Security Administration; the Federal Communications Commission, and the Bureau of Consumer Financial Protection.23  Before 2017, the CRA only had been invoked once (by the Republican-controlled 107th Congress and President George W. Bush to nullify a Clinton Administration Department of Labor rule in 2001).24 Most recently, the CRA was used to overturn a Bureau of Consumer Financial Protection rule in 2018.25

CRA actions generally are not subject to judicial review, though this area of the law is still developing. The CRA itself provides that actions taken under this statute are not subject to review by the courts.26 In the small number of cases to date, most courts have interpreted this prohibition broadly and dismissed cases that sought to challenge action under the CRA.27 However, a few federal trial courts have interpreted the prohibition to extend only to judicial review of congressional action under the CRA and agreed to hear lawsuits challenging administrative agency action under the CRA.28

2.  How can an incoming Presidential administration change regulations issued by its predecessor?

A new Presidential administration’s ability to unilaterally (without Congress) alter regulations issued by the prior administration depends on the status of the regulation it wants to change. Key questions include whether the regulation is final or proposed; whether or not the regulation’s effective date has passed; and whether or not the regulation has been published in the Federal Register (Table 1).

Similar to actions by past incoming administrations involving a change in party control of the presidency, the Biden Administration upon taking office issued a memorandum freezing new or pending regulations until they are reviewed.29 Specifically, the memorandum directs administrative agencies to refrain from issuing or sending to the Federal Register for publication any proposed or final rules until they are reviewed by a Presidential appointee or designee.30 According to the memorandum, agencies also must immediately withdraw any rules that were sent to the Federal Register for publication but have not yet been published so that they can be reviewed by a Presidential appointee or designee.31 For rules that already have been published in the Federal Register or otherwise were issued but have not yet taken effect, the memorandum advises agencies to consider postponing the effective date for 60 days to provide an opportunity to review any questions of fact, law, or policy raised.32 The memorandum also provides that, during this 60-day period, agencies should consider opening a 30-day period for public comment on these issues.33 Finally, under the memorandum, agencies should consider whether delay beyond 60 days is required to review issues raised by the rules, including whether to publish an NPRM proposing further delay, and notify the Office of Management and Budget Director about any rules determined to raise substantial questions of fact, law, or policy.34 The memorandum applies to final regulations, as well as notices of inquiry, advance NPRMs, NPRMs, and agency guidance.35 In addition to actions available to the incoming administration to change regulations, litigation challenging regulations also may lead to change (see Box 1 for an example).

Box 1: Section 1557 as an Example of Regulatory Changes through Litigation

Lawsuits challenging final rules also can lead to regulatory changes. An example is the regulations implementing the Affordable Care Act’s non-discrimination provision, Section 1557, which have evolved due to several lawsuits as well as administrative agency changes.36 Provisions of the original implementing regulations that included gender identity and termination of pregnancy in the definition of sex discrimination issued by the Obama Administration in 2016 were vacated by a Texas federal trial court. Subsequently, the Trump Administration finalized revised regulations in 2020, citing the litigation in support of its changes, though the revisions go beyond the issues raised in the lawsuit.

Additional lawsuits were filed challenging the Trump Administration regulations, and two federal trial courts have issued nationwide preliminary injunctions blocking implementation of the provisions excluding sex stereotyping from the definition of sex discrimination and provisions incorporating a blanket religious freedom exemption from claims of sex discrimination. As a result, these provisions of the Trump Administration regulations are not in effect while the litigation is pending, though other provisions of the revised regulations did take effect. Other lawsuits challenging the Trump Administration regulations also are pending.

The Biden Administration will have to determine whether to continue to defend the Trump Administration regulations in court or whether to issue a new NPRM to develop revised regulations. Upon taking office, President Biden issued an executive order directing agencies to review all actions, including regulations, that may be inconsistent with preventing and combatting discrimination based on gender identity and sexual orientation.37 This order directs agencies to develop a plan to consider whether to revise, suspend, rescind, or promulgate new regulations, consistent with the APA, within 100 days.38 Based on this policy, it is likely that the Biden Administration will revisit the Trump Administration’s changes to the Section 1557 regulations.39

3.  Which final regulations might be subject to the CRA or a temporary delay by the Biden Administration?

As the new Congress convenes and the Biden Administration takes office, policymakers will likely consider which Trump Administration regulations to review under the CRA or administratively. Table 2 lists examples of key health policy regulations that are potentially within the CRA window and/or subject to delayed implementation due to executive action. Choosing which regulations to target involves balancing a number of competing priorities. For the CRA, policymakers could weigh the likelihood of widespread support for a joint notice of disapproval, whether the agency will want to issue substantially similar regulations in the future, and the limited amount of floor time to take up CRA resolutions, given the need to address other legislation and confirm Biden Administration nominees. The prohibition on issuing similar regulations in the future could be a significant limiting factor for certain regulations – such as the ACA Marketplace and Medicaid managed care rules – even though they contain controversial individual provisions. When considering regulatory changes administratively, the Biden Administration is likely going to have to balance many competing priorities and account for the time that notice and comment rule-making requires. While the CRA process must be completed within a limited timeframe, other actions to change Trump Administration regulations will take longer.

Table 2: Key Health Policy Regulations Potentially Within Congressional Review Act Window And/Or Subject to Delay Because Not Yet In Effect
Topic Rule Date Issued Effective Date
HHS regulations (agency-wide) Final SUNSET rule which sets expiration dates for HHS regulations unless they are periodically reviewed (which could increase administrative burden for the agency and lead to regulations lapsing) 1/19/21 3/22/21
Medicare Final rule implementing policy and technical changes to Medicare Advantage and Part D for CY 2022, including a provision permitting Part D plans to have two specialty drug tiers, among other changes 1/19/21 3/22/21
Marketplaces Final Notice of Benefit and Payment Parameters for 2022, which, among others provisions, allows states to eliminate healthcare.gov as a mechanism for signing up for coverage, restricts the use of special enrollment periods to sign up for coverage mid-year, and reduces user fees paid by insurers to fund Marketplace operations 1/19/21 3/15/21
Medicaid Final rule changing how prescription drug manufacturers report “best price” under the Medicaid drug rebate program (which is intended to facilitate private insurance prescription drug value-based purchasing arrangements but could lead to increased Medicaid costs) 12/31/20 3/1/21 (some changes effective 1/1/22 or 1/1/23)
HHS grantees Final rule removing regulatory prohibition on discrimination by HHS grantees on the basis of sex, religion, sexual orientation, or gender identity and removing requirement that HHS grantees recognize validity of same sex marriages 1/12/21 2/11/21
Medicare Final rule removing the safe harbor protection for drug rebates in Medicare Part D under the anti-kickback statute 11/30/20 1/29/21 (some changes effective 1/1/2022)
Federally qualified health centers Final rule requiring federally qualified health centers to provide access to insulin and epinephrine to certain low- and moderate-income patients at 340B prices 12/23/20 1/22/21
HHS guidance (agency-wide) Final “Good Guidance” rule which withdraws HHS guidance if not included in a repository (which could increase administrative burden for the agency and result in guidance with beneficiary protections lapsing) 12/7/20 1/6/21
Medicaid Final Medicaid managed care rule that relaxes network adequacy, quality oversight, and beneficiary protections 11/13/20 12/14/20 (some changes effective 7/1/21)
Prescription drugs Final rule allowing states and other entities to create drug importation programs 10/1/20 11/30/20
Medicare Interim final rule implementing the Most Favored Nation Model for Medicare Part B drugs 11/27/20 11/27/20 (public comments due 1/26/21)
COVID-19 public health emergency Interim final rule making several policy changes in response to the COVID-19 public health emergency, including allowing states to make certain changes to Medicaid eligibility and benefits while receiving temporary enhanced federal matching funds during COVID-19 public health emergency, clarifying that Medicare Part B will cover the COVID-19 vaccine with no cost sharing while it is available under an Emergency Use Authorization, and prohibiting providers from billing people directly for administering COVID-19 vaccines that were purchased by the federal government 11/6/20 11/2/20 (public comments were due 1/4/21)
NOTES: CRA timeframes depend on when the rule is reported to Congress, not when it is issued by the agency. CRA window is subject to confirmation by the House and Senate Parliamentarians.

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