The bark sounds bad, but does the law bite?
What has the Regulatory Fairness Program achieved in its first year and a half of existence?
Since the start of the program, the National Ombudsman and Fairness Board members have convened 10 regional public hearings across the country, in which more than 100 small business owners have testified. In 1997, more than 50 businesses filed Appraisal Forms. Of the 50 comments filed, the Small Business Regulatory Enforcement Fairness Act of 1996 was applicable to 33, meaning they involved enforcement or compliance activity by a federal regulatory agency with regard to a small business.
Of the 17 comments that were not covered by the Regulatory Enforcement Fairness Act, eight did not involve enforcement actions, four were state agency actions, one was referred to SBA's Office of Advocacy, one was referred to the IRS Taxpayer Advocate, one did not report a problem, one did not wish to pursue its complaint, and one was anonymous.
Reign of terror endsSmall business owners filed complaints about 13 agencies in 1997. The IRS and the Environmental Protection Agency topped the list with eight and seven complaints respectively. One complaint was filed against the Health Care Financing Administration (HCFA).
There have been some real life successes reported by the national ombudsman's office. Kathy Diaz, a restaurant owner in Albuquerque, NM, complained about the "five-year reign of terror" of an IRS agent and succeeded in getting the agent replaced.
But does complaining about federal regulatory unfairness work? National Ombudsman Peter Barca thinks so, even though his office does not intervene directly in disputes. Still, the gathering of complaints about federal agencies has influence. "No agency wants to be recognized as the worst small business agency in government," he says.
After analyzing appraisals and testimony, the ombudsman's office identified four common themes. they are:
· Federal agencies change their rules in the middle of the game.
· Federal agencies disregard the economic or other consequences of their actions on small businesses.
· Small businesses often get ensnared in conflicting regulatory requirements when two federal agencies' jurisdictions overlap.
· Small businesses fear agency retaliation.
These themes apply to home health care agencies, says health care attorney John C. Gilliland II of Crestview Hills, KY, who has been campaigning for the industry to work through the SBA for relief.
"Obviously, with their many problems with HCFA, intermediaries, and survey agencies, home health agencies and hospices have much to say concerning regulatory unfairness. Virtually every provider who has dealt with HCFA and its agents has examples of arbitrary decisions, inconsistencies, lack of due process, no meaningful remedies for payment delay, and attempts to enforce nonexistent regulatory requirements."
As an example of the latter, Gilliland points to the homebound status regulation, which HCFA has enforced but has not yet clearly defined. It is still being studied.
In his initial report to Congress last December, Barca issued 10 key policy recommendations as identified by the fairness boards and his office. The five top recommendations are as follows:
· Agencies should be more aggressive in informing small businesses when they change or amend the rules, processes, or regulations that affect small businesses specifically.
· Agencies should develop an expedited review process in circumstances where their actions may have a severely negative impact or threaten the small business' survival.
· Agencies should build on the administration's policy to evaluate federal agency employees based on their efforts to ensure small business's compliance with federal regulations, rather than on the number of fines they collect.
· Agencies must adopt and follow policies and procedures that make it clear to small businesses that they will not face retaliation for raising concerns about agency compliance and enforcement activities. While the National Ombudsman can assure small businesses that he will not reveal their identities when dealing with federal agencies, small businesses seeking resolution directly from an agency should be equally assured that no retaliation will be taken.
· All agencies should place an executive summary on the cover of every major notice sent to small businesses to make them immediately aware of whether action is required or whether the notice is informational, the purpose of the publication, and to which businesses or industries it applies.
"If all agencies implemented just this one recommendation," says Barca, "they would lower the collective blood pressure of every small business owner in the country."
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