OIRA Memo on Agency Deregulation: Implications for Health Care

On October 21, 2025, the acting administrator of the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget issued Memorandum M-25-36, which contains guidance for federal agencies on “how to bolster, streamline, and speed” the deregulatory agenda prioritized by the Trump administration in 2025 (“the Memorandum” or “M-25-36”).

The Memorandum furthers two Executive Orders (EOs) issued earlier in the year. EO 14192, entitled “Unleashing Prosperity Through Deregulation,” requires that for every new regulation issued, ten must be repealed. EO 14219 seeks to ensure “Lawful Governance” to implement the president’s Department of Government Efficiency Deregulatory Initiative. M-25-36 also furthers a Presidential Memorandum of April 9, 2025, entitled “Directing the Repeal of Unlawful Regulations.”

The Memorandum, which establishes timelines and guidelines for OIRA review, focuses on: 1) speeding up the OIRA review process; 2) repealing facially unlawful regulations; and 3) developing better deregulatory records. We discuss each of these sections in turn before providing some thoughts in the health care context.

Speeding Up the OIRA Review Period

The Memorandum condemns what it calls the “ossification” of rulemaking—described as “rigid and burdensome procedural requirements…that can result in significant procedural delay, ultimately disincentivizing agency action.” Accordingly, OIRA is accelerating the time frame for regulatory reviews by imposing a presumptive maximum 14-day OIRA review period for facially unlawful rules (Part II, below) and a presumptive maximum 28-day review period for deregulatory actions executed with factual records (Part III, below). Previously, EO 12866 of September 30, 1993, had set a maximum of 90 days for OIRA review, with a possible one-time extension of up to 30 days.

M-25-36 further urges agencies to streamline their compliance with prior executive orders—some in place for decades—requiring them to engage in consultation or substantive analysis. Agencies should now presumptively consider the OIRA review process and Administrative Procedure Act (“APA”) notice and comment procedures as adequate for this purpose. Moreover, the Memorandum instructs that federal agencies no longer need to consult with state, local, and tribal governments in deregulatory actions with local consequences.  

Provisions Directed at Repealing Facially Unlawful Regulations

The Memorandum stakes out an aggressive approach to repealing regulations deemed unlawful by an agency. It directs agencies to rescind regulations they consider unlawful or that conflict with Supreme Court precedents. It advises agencies to use the “good cause” exemption under the APA, which allows agencies to bypass the usual notice and comment process when it is “impracticable, unnecessary, or contrary to the public interest.” If an agency determines that an existing regulation is unlawful, there is no need for public notice and comment. 

In addition to recommending reliance on the good cause exception, the Memorandum notes that agencies can publish interim final rules (“IFRs”), where the rule is published first and comments reviewed later. The Memorandum endorses the concept that a deregulatory rule is valid regardless of whether public notice precedes a comment period or follows it.

Provisions Directed at Developing Better Deregulatory Records

In situations in which the agency’s deregulatory action would require a record or an agency opts to develop a record, the Memorandum notes that agencies should consider both qualitative and quantitative factors. OIRA discusses these factors across four categories of pro-deregulatory considerations that agencies can use to build their justifications:

1. restoring private-conduct liberty benefits that would enable more individuals and firms to be “free to pursue their own self-defined interests, unfettered by regulation”;
2. aggregated impacts, where there may be a collective value to a group of deregulatory actions which “may be greater than the sum of its parts”;
3. the uncertainty of cost/benefit projections under which past regulations were implemented; and
4. use of deregulation to codify voluntary enforcement priorities. 

The third and fourth of these may be particularly applicable to the health care regulations.  

Noting that past regulations required agencies to project the costs and benefits of implementation, OIRA advises that when experience shows that a regulation’s costs ultimately exceed its benefits or that costs plus qualitative factors together exceed benefits, “it can make a powerful case for deregulation.” Projecting the costs of particular regulatory actions is an inexact science and unpredictable changes in the economy and the health care market (for example, the COVID pandemic) may have resulted in the actual costs of a regulation having exceeded original projections. 

OIRA advises that enforcement history can likewise be relied on as a justification for deregulation within a developed record, where deregulation essentially codifies an agency’s determination not to prioritize enforcement of particular regulations. Further, OIRA notes that, where the historical record shows few if any violations of a regulation, “a reasonable case can be made that the regulation was unnecessary from the outset.” Reliance on enforcement history in the Medicare, Medicaid, or other health regulatory sphere could be fraught where lack of enforcement action or documentation of violations is arguably due to limited agency resources rather than a statement on the necessity the of a particular regulation.

Conclusion

The approach to deregulation in the Memorandum may increase tensions between the Executive Branch and the Judiciary when it comes to determining if a regulation is unlawful. Although the Memorandum touches on two decisions by the Supreme Court that addressed an agency’s power to exercise its regulatory authority when there are major questions of economic or political significance and whether reviewing courts should defer to the agency’s determination, these are questions of law. In both decisions, the Court made it clear that courts have the final word on these questions. As a result, even if an agency finds that a regulation is unlawful, it is still subject to a challenge and a reviewing court would not be obliged to defer to the agency’s finding.

Although many agencies, including the Centers for Medicare and Medicaid Services (“CMS”), have made use of IFRs in the past, much of the law in this area is unsettled. It is still an open question whether a finding of good cause is a prerequisite for issuing an IFR. The Supreme Court has only evaluated these two concepts in tandem once, concluding that CMS had shown that there was good cause for issuing an IFR at the height of the Covid pandemic imposing a vaccine mandate on health care workers in facilities that participate in Medicare and Medicaid in advance of the respiratory disease season. Biden v. Missouri, 142 S. Ct. 647 (2022). As a result, accelerating the deregulatory process may result in increased litigation.

The aggressive approach outlined in the Memorandum may have benefits, but it may also disrupt expectations and long-term planning by health care providers, manufacturers, and investors. For those stakeholders adversely affected by a rapid repeal of existing regulations, it may be necessary to challenge those actions. For example, litigation may be necessary to contest a repeal as an abuse of the good cause exception. In the past, federal courts have construed this exception narrowly and allowed agencies to dispense with normal rulemaking when there is a genuine emergency that affects health and safety or a brief deadline imposed by Congress, and rejected arguments based on regulatory uncertainty, reducing burdens on regulated entities, agency delays, and reducing costs. As a result, if the good cause exception is applied routinely, it may generate further litigation.

Epstein Becker Green Staff Attorney Ann W. Parks contributed to the preparation of this post.