On February 28, 2025, Secretary Kennedy revoked the “Richardson Waiver,” and in doing so, stated that:
“The policy waiving the statutory exemption for rules relating to public property, loans, grants, benefits, or contracts is contrary to the clear text of the APA and imposes on the Department obligations beyond the maximum procedural requirements specified in the APA. The text of the APA recognizes that it is necessary and appropriate to issue rules relating to agency management or personnel or to public property, loans, grants, benefits, or contracts without notice and comment procedures. It also is contrary to the clear text of th APA to use the good cause exception ‘sparingly.’ The extra-statutory obligations of the Richardson Waiver impose costs on the Department and the public, are contrary to the efficient operation of the Department, and impede the Department’s flexibility to adapt quickly to legal and policy mandates.
Effective immediately, the Richardson Waiver is rescinded and is no longer the policy of the Department. In accordance with the APA, “matters relating to agency management or personnel or to public property, loans, grants, benefits, or contracts,” are exempt from the notice and comment procedures of 5 U.S.C. 553, except as otherwise required by law.”
What does this mean for health information technology? Well, a lot of visibility and opportunity to comment on things that affect vendors and providers alike very well could close. Specifically, the Medicare Physician Fee Schedule, Conditions of Participation for Medicare and Medicaid, the Inpatient Prospective Payment System, and modifications to Part C (Medicare Advantage) and Part D (covered prescriptions) are all matters that relate to public benefits and contracts. Each of these has a variety of different influences. For example, the SCRIPT standards for e-prescribing are often regulated in the Part D regulations. The Merit-based Incentive Payment System and measures relating health information exchange, patient portals, and registry reporting – are regulated in the Medicare Physician Fee Schedule.
That said, some things require rulemaking. For example, the proposed modifications to the HIPAA Security Rule likely must still go through rulemaking without risking a procedural due process and/or APA challenge. The same applies to wholesale modifications the HHS ASTP/ONC Certification Program (e.g. HTI-4), or changes to the information blocking regulations.
Why is HHS doing this? I do not know first-hand, but can make an educated guess or two. It comes directly from the Secretary’s office, and so, I suspect this is part of a political directive to clear operating space for DOGE and Congress’s proposed budget cuts. I already wrote about how DOGE had more or less terminated the Centers for Medicare and Medicaid Innovation, which would affect a variety of payment models. Now, Congress has passed a budget which may lead to serious cuts to the Medicaid program.
With DOGE and the proposed budget taken together, this looks like a signal to me that the agency is anticipating these budget reductions to Medicaid, that they intend to further cut physician rates across the board, and restrict beneficial payment models further. They probably do not want to hear what providers have to say about getting less money, and taking away proposed rulemaking not only shuts out the physician lobby from one way it can directly impact physician payments, but it also reduces the number of news cycles that will be consumed by cuts. Politically, that’s a good thing.
Practically, health IT developers, particularly those with Medicaid customers who participated in cutting edge programs, should brace themselves financially and stay abreast of the most recent changes to payment policies. HHS’s final and proposed rules can be found at the OMB’s website reginfo.gov (along with all other agencies’). Expect some changes to what is posted there today based on this notice, and do not rely on normal rulemaking cycles. Revisit the OMB’s website actively and often. This may potentially break the Spring-Fall rulemaking cadence many industry folks are used to for CMS payment policies, and missing an update could leave your organization off balance.
You can read the notice for yourself below:
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