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ua14no94 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)...


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DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS)
Statement of Regulatory Priorities
This statement of regulatory priorities is in two parts. Part I 
describes the overall regulatory priorities of the Department. Part II 
describes these priorities by agency, in greater detail.
I. Overall Priorities
The Department of Health and Human Services, the ``People's 
Department,'' provides direct services or assistance to one of every 
five Americans. With emphasis on children, the elderly, disabled 
persons, the poor and others who are most vulnerable, HHS is the 
Federal Government's principal agency for protecting health and 
providing essential human services to Americans. HHS activities are 
striking in their variety, ranging from the largest programs in 
Government (Social Security, Medicare, Medicaid) to some of the 
smallest. HHS responsibilities encompass a wide spectrum including 
improving infant health; providing care for the elderly; gathering 
basic national health and welfare statistics; providing job training, 
health clinics, and Head Start services; conducting health research at 
the National Institutes of Health; and regulating food and drug 
products that account for some 25 cents of every dollar spent by 
American consumers.
The Department's regulatory priorities reflect our broad strategic 
goals. These key goals include:

<bullet> Transforming the welfare system in this country from a system 
            of dependency to a system of transition to work;
<bullet> Improving and protecting the health of our citizens, 
            especially the Nation's most vulnerable populations;
<bullet>Investing in the future of our Nation's children and youth;
<bullet> Increasing the independence and self-sufficiency of the 
            elderly and persons with disabilities; and
<bullet> Improving the management of our programs and delivery of 
            services to our customers.
Many of our significant regulatory initiatives address one or more of 
these Department-wide goals. For example, new Head Start regulations 
will not only strengthen the existing program as an investment in our 
nation's children, but will also implement the new component for 
infants and toddlers through performance standards.
Because of the importance of HHS's regulatory responsibilities, we are 
emphasizing the principles of Executive Order 12866 which include 
regulating only where required by statute or to meet a compelling 
public need, fully considering the costs and benefits of regulatory 
alternatives, increasing consultation with affected publics, and 
reducing regulatory burden.
HHS is committed to substantial reforms of our existing regulations to 
reduce burden on those we regulate while effectively meeting the health 
and human services responsibilities of this Department. To focus our 
efforts on those items in most need of revisions, we have asked the 
public for recommendations through a request published in the Federal 
Register on January 20, 1994. We continue to seek recommendations from 
the public.
Early consultation with those parties affected by rulemaking is 
critical to developing workable regulations. HHS will use a number of 
innovative approaches as we work on developing the most effective 
strategies for consultation with State and local governments and the 
wide variety of other groups and individuals affected by regulations 
issued by this Department. One approach that we plan to use for the 
first time in the upcoming year is negotiated rulemaking. This process 
will bring HHS together with external interests who would be 
significantly affected by a new rule to reach consensus through open 
discussions on some or all issues under consideration before a rule is 
formally published as a notice of proposed rulemaking.
HHS is taking a new approach to our relationship with State, local, and 
tribal governments. We are listening to officials of other levels of 
government concerned about the imposition of unfunded mandates and 
other significant changes on the way they must operate. Pursuant to 
Executive Order 12875, ``Enhancing the Intergovernmental Partnership,'' 
HHS is committed to avoiding where possible imposition of mandates--
funded, and particularly unfunded--and to consulting with appropriate 
levels of government as early as possible in the development of 
policies and regulations affecting them.
We are carrying out our decisionmaking and consultation with a full 
appreciation of State, local, and tribal governments as our partners in 
serving the public. One example of our efforts is the Medicaid 
regulation on home and community-based care which was published in July 
1994. We worked closely with States to craft less burdensome waiver 
requirements that will give States an opportunity to improve and expand 
these essential community-based services to provide home care for more 
individuals and to avoid unnecessary placement in nursing homes or 
other health care institutions.
There are additional samples of regulations meeting both HHS strategic 
goals and E.O. 12866 objectives. Under the Mammography Quality 
standards Act, the Food and Drug Administration is implementing a major 
initiative to upgrade the quality of mammography services. Higher 
quality services will help increase the number of women whose cancers 
are detected early and contribute directly to improving the health of 
women. Other PHS agencies are working on selected regulations that will 
also contribute to improving the Nation's health, such as regulations 
related to State enforcement of laws against selling tobacco products 
to minors.
Reengineering the Social Security Administration's disability insurance 
claims process will enable us to dramatically reduce serious backlogs 
and provide better service. The current process and procedures have not 
changed significantly since the 1950's. Proposed changes would affect 
types and locations of personnel in State agencies that serve as agents 
for the program, and adjudicative standards.
The Health Care Financing Administration is reviewing existing Medicare 
and Medicaid quality standards, known as ``conditions of 
participation,'' for health care facilities such as hospitals, home 
health agencies, and dialysis facilities to identify opportunities to 
reform these standards to emphasize performance, to make them more 
customer-centered, and to reduce burden on regulated entities. A number 
of other regulations to simplify management of HCFA programs and 
increase program integrity guarantees are also under development.
As a final example of the relationship of our regulatory initiatives to 
these goals, just this spring our new food labeling standards became 
effective, providing the American consumer with clear, useable, and 
understandable nutrition information. This empowers the consumer with 
the information needed to improve diet and health, and thus reduces his 
or her risk of certain diseases, including heart disease and cancer.
II. Agency Plans
Virtually all HHS regulations are issued by a handful of agencies 
within the Department. Descriptions of priorities for these are as 
follows.
Health Care Financing Administration (HCFA)
HCFA is striving to reduce unnecessary burdens that the Medicare and 
Medicaid programs have imposed on beneficiary populations, all levels 
of government, and the medical provider community. HCFA is also 
extending flexibility to the States where it will foster improved and 
less burdensome operations and facilitate State reform activities.
In order to provide the most responsive and effective services 
possible, HCFA is conducting rulemakings in an open manner, consulting 
with and obtaining early and continuous input from the various levels 
of government, as well as representatives of advocacy and provider 
organizations. HCFA is working with State and local governments through 
a continuous and ongoing consultation process in the development of 
Medicaid regulations. For example, regularly scheduled meetings are 
held with technical advisory groups that include HCFA and State 
Medicaid representatives. Regular meetings and consultations are also 
held by the ``Camden Yards Group'' that includes representation from 
the State Medicaid Directors' Association, the American Public Welfare 
Association, the National Governors' Association, and the Conference of 
State Legislators. Under this cooperative structure, HCFA can ensure 
maximum flexibility to State Medicaid programs.
Each major Medicaid regulation is being developed with extensive 
involvement from this representative structure to assure effectiveness 
and economy. Examples include: a proposed rule to clarify for States 
the process for making ``findings'' concerning the payment for 
inpatient hospital and long-term care facility services; a notice that 
will facilitate implementation of the Department's childhood 
immunization program; a rule that will make good on the President's 
commitment to the National Governors' Association to simplify the home 
and community-based services waiver process; and, a rule that will 
ensure the effective delivery of services under the early periodic 
screening, diagnostic, and treatment (known as EPSDT) program. These 
reforms will contribute to improving access and meeting the health 
needs of children, particularly disadvantaged and minority children.
 In accordance with the combined themes of reducing unnecessary burden, 
improving quality of care, and involving input from a full range of 
interests, HCFA is developing improved Medicare regulations that will 
govern conditions of participation for home health agencies and 
hospitals, and conditions of coverage for the payment of end-stage 
renal disease. Existing regulations in these areas are unnecessarily 
burdensome, outdated, and process oriented. They will be replaced with 
more universally applicable provisions that are patient/outcome 
oriented and driven by meaningful data to better ensure healthy 
outcomes for aged patients and those with disabilities. In developing 
these regulations, HCFA has met, and is continuing to meet, with a 
variety of provider and consumer representatives.
HCFA is also developing quality assurance regulations for nursing 
homes. The agency is considering an enforcement regulation that will 
use patient health status measures as benchmarks for determining 
whether nursing facilities are in compliance with Medicare and Medicaid 
participation requirements. For example, where deficiencies that do not 
harm people are involved, the focus will be on corrective measures. 
Conversely, for health and safety violations involving potential or 
actual harm to residents/patients, punitive measures can be expected, 
such as denial of payment, civil monetary penalties, and exclusion from 
the Medicare/Medicaid programs. By establishing enforcement remedies 
that realistically relate to the effects on patient health and safety, 
the rule will encourage facilities to achieve the highest level of 
health for the aged and disabled patients in these facilities.
In the area of fiscal responsibility, regulations are being developed 
to implement the statutory prohibition against patient referrals by 
physicians to health service entities (e.g., clinical laboratories, 
home health agencies, physical therapists, etc.) with which the 
physician has a financial interest or relationship. These regulations 
are significant because they address the concern that such referral 
relationships involve a potential for conflict of interest resulting in 
unnecessary services for Medicare patients and unnecessary costs to the 
Medicare program.
Several of HCFA's reform efforts are particularly supportive of the 
President's directive (in Executive Order 12866) to take burden-
reducing regulatory actions, and the Secretary's goal of significantly 
improving HHS management and customer service. Indeed, our efforts are 
already bearing fruit. For example, in March 1994 HCFA published a 
regulation that replaced the requirement for physicians to provide 
hospitals annually with a signed acknowledgement concerning penalties 
for misrepresenting certain information with a one-time signing 
requirement at the time a physician is initially granted hospital 
admitting privileges. One major medical association characterized this 
change as one that will alleviate the ``hassle factor'' for physicians 
and an important step toward restoring mutual trust between the Federal 
Government and the medical profession.
Public Health Service (PHS) Including the Food and Drug Administration 
(FDA)
The PHS agencies (which, other than the Food and Drug Administration, 
have minimal regulatory responsibilities) are working on selected 
regulatory initiatives that improve individual program areas and 
support the Secretary's goals. These include regulations on organ 
procurement, State enforcement of laws against selling tobacco products 
to minors, reducing potential conflicts of interest in biomedical 
research, improving respirators used in the workplace, and increasing 
tribal government responsibilities for managing health care programs.
Through the Food and Drug Administration, HHS has undertaken a number 
of new regulatory initiatives to speed the development of new drugs to 
treat serious diseases, particularly the development of drugs to treat 
and prevent HIV infection, one of the nation's highest health 
priorities. In support of this goal, FDA funds the National Task Force 
on AIDS Drug Development, which was established by the Secretary of 
Health and Human Services, and provides further support in terms of 
agency expertise in science and medical ethics. FDA has also acted to 
encourage labeling of prescription drugs for AIDS and other serious 
illnesses with dosing information for pediatric use, so that these 
therapies can be readily used to treat children.
Empowerment of the individual to participate in his or her own health 
care is also a high priority. FDA is developing regulatory initiatives 
to transform drug labeling into a readily understandable source of 
information for individuals who are not health professionals, which 
would help prevent the substantial waste and harm that occurs when 
patients do not understand how to use therapeutic drugs properly. The 
agency is completing implementation of the new food labeling at this 
time in a pioneering effort to provide consumers with information that 
enables them to use food products in a manner consistent with a healthy 
life style.
Consistent with the Vice President's recommendation for a new food 
safety program to reform regulatory oversight of the nation's food 
supply, FDA is working to replace its current oversight strategy with a 
cost-effective, state-of-the-art strategy. The agency's proposed new 
approach for oversight of seafood is based on the system of Hazard 
Analysis Critical Control Points (HACCP), and FDA plans to work with 
the food industry to explore expanding HACCP to other components of the 
food supply.
FDA has embarked on a number of initiatives to improve and focus on 
women's health. The agency is moving to implement the Mammography 
Quality Standards Act rapidly to facilitate the detection of breast 
cancer and is establishing an Office of Women's Health to provide 
leadership and monitoring in areas such as the application of the 
agency's revised clinical trial guidelines, the development of new 
contraceptives and products to protect women against sexually 
transmitted diseases, and the safety of cosmetics.
The United States leads the world in development of new technologies, 
and FDA has given priority to products of important new technologies, 
such as gene and somatic cell therapy and food plants genetically 
altered through use of recombinant DNA techniques, striking a balance 
between regulation and reliance on the private sector in a manner that 
encourages the rapid evolution of these technologies, their continued 
adaptation to health-related uses, and the building of public 
confidence in them. To help speed important new drugs and medical 
devices to patients, the agency has also developed new programs, such 
as user fees for drug approvals. In order to facilitate the electronic 
submission of marketing applications for such products, FDA plans to 
propose steps by which legally binding electronic signatures may be 
affixed to such applications, thus validating them. FDA will address 
concerns about the integrity of clinical data submitted to support 
marketing approval of new therapies by proposing the disclosure by 
clinical investigators of potentially biasing financial holdings.
Finally, FDA has undertaken the review of a large number of regulations 
for burdensome provisions that can and should be eliminated. As part of 
this process, the agency will work to assure that these regulations are 
effective, consistent, sensible, and understandable. Regulations that 
will come under scrutiny include a major portion of the general 
biologics regulations; the blood and blood products regulations; the 
regulations governing the investigation and review of new animal drugs; 
and the good manufacturing practice regulations for medical devices.
Social Security Administration (SSA)
 The Social Security Administration continuously reviews its 
regulations to ensure that its policies constitute a properly 
integrated program that conforms to the statutes, court decisions, 
public needs, and to the principles of economical, efficient, and 
effective administration.
SSA has three major initiatives under way. On September 8, 1994, 
Commissioner Chater issued an agency Disability Process Redesign Plan. 
Decisions on implementation, including the need for regulations, are 
not yet final.
 SSA is continuing a cooperative project with the Internal Revenue 
Service (IRS) and other government agencies to develop a simplified 
wage reporting system. Under the proposed system, Federal and State 
agencies would develop an integrated reporting approach whereby 
employers would file employment and wage-related information with a 
single processing entity. The processing entity would, in turn, be 
responsible for providing the data to Federal, State, and local 
agencies for which the submitted information was intended. This system 
would eliminate redundant wage reports and greatly reduce the 
complexity of wage and tax reporting requirements presently imposed 
upon employers.
SSA is currently evaluating findings and recommendations made by the 
MITRE Corporation to determine the next step toward implementation. The 
MITRE Corporation's preliminary economic analysis suggests that 
employers could save approximately $1 billion a year under the system's 
full implementation. Findings to date indicate that an agreement would 
be needed with each participating State to ensure that State needs are 
adequately met and to reach agreement on necessary cost-sharing 
arrangements.
In addition, SSA is continuing to work with the IRS to coordinate the 
timing of when employers are required to file wage and tax reports. 
Currently, employers are required to file Form 941 wage reports by the 
end of January and Forms W-2/W-3 by the end of February. SSA is 

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