2/6/2001
Primer on the Negotiated Rulemaking Process
M E M O R A N D U M
As you are aware, the Benefits Improvement & Protection Act of 2000 ("BIPA") established federal standards for the provision of orthotics and prosthetics. Included within these standards is the requirement that negotiated rulemaking procedures be used to assist in the drafting and implementation of the rules and regulations that will result from the enactment of this new law. This memorandum describes the negotiated rulemaking process ("the process"), as well as the procedures involved for participating in that process as an interested stakeholder.1
The Negotiated Rulemaking Act (P.L. 101-648; 5 U.S.C.A. §561 et seq) ("The Act") sets out the general framework in which a proposed rule is developed through the work of a negotiated rulemaking committee ("the committee") and the government agency seeking to implement a particular regulation. As the Act's name connotes, the underlying thrust of the process is for participating parties to reach a "consensus" on the text or content of the proposed rule. Consensus is defined in the Act as "unanimous concurrence among the interests represented." However, the committee is not obligated to that standard alone, and may instead agree upon another definition of the term.
Choosing Members of the Committee
Whether representatives of a particular interest group are chosen to participate on the committee often depends upon the recommendation of a "convener." The Act is structured to allow conveners to assist a government agency in the process of "identifying persons who will be significantly affected by a proposed rule
" Once such persons have been identified, the convener may make recommendations to the agency as to who is best suited to serve on the committee. However, the use of a convener is discretionary and a government agency is not required by the statute to use one. After potential members of the committee have been identified, their names are published in the Federal Register and if appropriate, in relevant industry publications, in order to notify all relevant stakeholders.
Procedure to Serve on the Committee Without Being Selected
After proposed members of the committee have been chosen and appropriate publication has occurred, the Act permits persons who will be significantly affected by a proposed rule--who believe that their interests will not be adequately represented by any person selected to serve on the committee--to apply for or nominate another person for membership on the committee. This procedure must be included in the preliminary notice materials naming proposed members of the NRMC.
The Act has a series of administrative requirements that must be met in applying to serve on the committee, including an explanation as to why the persons chosen to serve do not adequately represent the interests of the applicant. The agency must provide applicants with at least thirty (30) days to submit their application to serve. In forming these committees, government agencies are supposed to limit their membership to twenty-five (25) members, however, it is within their discretion to increase that number.
The Negotiated Rulemaking Process
It is important to note that the Act prohibits judicial review of agency action relating to the committee's establishment, guidance it provides, or its termination. The committee must also meet the requirements of the Federal Advisory Committee Act (P.L. 92-463). This includes the filing of a charter with the government agency to which the committee reports, as well as appropriate Congressional Committees having jurisdiction over the regulation's subject matter.
Once the roster of the committee is finalized, it will approve or disapprove the government agency's nomination of a "facilitator." The facilitator is supposed to impartially chair meetings; assist committee members in the negotiation process; and maintain minutes and records of the meetings. Any potential conflicts of interest, financial or otherwise, are to be taken into account in choosing facilitators (as are potential conflicts of conveners).
During their initial meeting, members of the committee discuss the rules under which they will be operating and similar administrative matters. Negotiation sessions are scheduled in a fashion that allows committee members the opportunity to consult with their constituencies and, if necessary, to generate information which may provide a basis for agreement. The committee may also form working groups (which may include technical experts) to meet between committee sessions and to provide information or proposals to the committee.
If the committee reaches a consensus on a proposed rule, it is to forward that consensus to the government agency to whom it reports. If a consensus is not reached on the rule, any other areas in which a consensus is reached are also to be forwarded. The committee may also report any other information, recommendations or other materials that it deems appropriate. Individual members of the committee may also include their own information, recommendations or materials as an addendum to the committee's report. The negotiated rulemaking process is time-consuming and labor intensive, but it can be a very effective way of creating regulations that are based on consensus.
1 Portions of the information contained herein are derived from HCFA's "Convening Report On The Use Of Negotiated Rulemaking For A Rule On PSO Solvency Standards," located at www.hcfa.gov./medicare/conrep.txt. Citations to that report are omitted.
