Article
What OMB proposed
The Office of Management and Budget and other agencies have proposed revisions to the Uniform Grants Regulation, which governs most federal financial assistance. As summarized by hospital groups, the changes would give agencies broader discretion to change award conditions, add requirements during the life of an award and suspend or end funding based on evolving agency priorities or “national interest” determinations, except where a statute directs how the money must be used.
In a July 13 letter, the American Hospital Association, America’s Essential Hospitals, the Catholic Health Association, the Children’s Hospital Association and the National Association for Behavioral Healthcare urged OMB to drop the changes. They singled out the termination provision at 2 CFR 200.340, which they said would also eliminate existing appeal rights.
Where hospitals are exposed
Routine Medicare and Medicaid fee-for-service payments appear to be outside the rule. But hospitals rely on federal grants and cooperative agreements for medical research, emergency preparedness, rural health, behavioral health and public health work. The groups asked OMB to say plainly whether the rule reaches three other funding streams: the Medicare Rural Hospital Flexibility Program, CMS Innovation Center model agreements, and supplemental or capitation payments to Medicaid managed care plans.
The practical worry is about commitment. Many grant programs need investigators, staff, equipment and community partners in place for several years, and often require matching funds. If an award can end for reasons unrelated to performance, boards may hesitate to commit capital or matching dollars, and recruiting principal investigators becomes harder. The groups asked that awards generally not be changed or ended absent serious noncompliance, a change in law or other extraordinary circumstances defined in regulation.
Questions for the board
- How much is at stake? Ask for an inventory of federal grants and cooperative agreements by program, amount, end date and the staff positions they fund.
- What is the exit plan? For the largest awards, identify what happens to patients, employees and partners if funding stops midstream.
- Should our approval criteria change? Consider whether new grant applications that require matching funds or long-term hires need a higher bar or contingency reserves.
- Are we contributing to the record? Specific examples from your organization can strengthen association comments and later advocacy.
Archive entry for Jul 19, 2026, added Nov. 11, 2026.