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Legal Insights and Perspectives for the Healthcare Industry

The Office of Management and Budget’s (OMB’s) policy statement emphasizes the role of the Congressional Review Act in the rulemaking process and incorporates rulemaking actions that were not consistently subject to prepublication review under standing executive orders. Questions remain regarding the prospects for regulatory gridlock and burdensome delays.

A recent OMB memorandum instructs departments and agencies of the executive branch to submit “guidance documents, general statements of policy, and interpretive rules” to the OMB’s Office of Information and Regulatory Affairs (OIRA) for prepublication review. The April 11 memorandum, which also expands OIRA review to agency rules historically submitted through the centralized process designated in Executive Order 12866, is effective May 11, 2019. Regulatory watchers caution that the OMB’s action could increase the volume of rules that require OIRA review and potentially result in regulatory gridlock and rulemaking delays.

The stated purpose of the memorandum is to reinforce the obligations of departments and agencies under the Congressional Review Act (CRA) to ensure “more consistent compliance with its requirements” by federal regulators. Under the CRA, Congress can invalidate a “major” rule with a joint resolution of disapproval signed by the president or enacted over the president’s veto. OIRA designates whether a rule is “major” based on its relative importance, significant adverse effects, and annual economic impact (at least $100 million). A “major” designation by OIRA will trigger a report by the US Government Accountability Office and delay the effective date while Congress considers whether to disapprove the rule.

 

Federal agencies have been inconsistent in providing information to OIRA for making major rule determinations, according to the OMB. To that end, the memorandum outlines a process that departments and agencies must implement for OIRA review along with a requirement that regulators coordinate with OIRA “irrespective of whether a rule would otherwise be submitted for regulatory review.” The memorandum provides that “Agencies should not publish a rule—major or not major—in the Federal Register, on their websites, or in any other public manner before OIRA has made the major determination and the agency has complied with the requirements of the CRA.” However, the memorandum remains silent on what happens should federal regulators choose not to comply with its contents.

 

It remains to be seen whether the OMB memorandum will result in more congressional scrutiny, and utilization of the joint resolution disapproval process, or otherwise result in delays to regulatory rulemaking processes. But, as administrative agencies attempt to implement larger policy initiatives through the rulemaking process, the OMB memorandum is a reminder that the CRA presents requirements designed to furnish a congressional “check” on their actions.