[Federal Register Volume 73, Number 10 (Tuesday, January 15, 2008)]
[Notices]
[Page 2512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-551]



[[Page 2512]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Resources and Services Administration


State Offices of Rural Health Grant Program

AGENCY: Health Resources and Services Administration, HHS.

ACTION: Notice; request for public comment.

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SUMMARY: The Health Resources and Services Administration (HRSA) is 
seeking comments from the public on its plan to institute a permanent 
deviation from a policy in the Department of Health and Human Services 
(HHS), Grants Policy Directive (GPD) 3.01 governing indirect cost 
recovery for one of its grant programs. The GPD states ``HHS considers 
activities conducted by grantees that result in indirect charges a 
necessary and appropriate part of HHS grants, and HHS awarding offices 
must reimburse their share of these costs.'' Although HRSA typically 
reimburses grantees for their full share of administrative overhead 
represented in approved indirect cost rates, the agency believes, in 
the case of its State Offices of Rural Health (SORH) Grant Program, 
that full recovery of overhead expenditures would be detrimental to the 
SORH grantees' ability to adequately conduct all the activities 
mandated in the authorizing legislation. Limiting indirect cost 
recovery is necessary because eleven of fifty SORH grantees are located 
in academic settings that have established indirect cost rates in the 
range of 30 to 50 percent or even higher. It is in the best interest of 
the program to limit the indirect cost recovery to not more than 15 
percent of allowable total direct costs, thus leaving 85 percent of the 
grant funds to conduct the activities required by the grant program. 
This limitation would be applicable to all awardees of the State 
Offices of Rural Health Grant Program.

DATES: If you wish to comment on any portion of this notice, HRSA must 
receive comments by February 14, 2008.

ADDRESSES: You may submit comments by any of the following methods:
     E-mail: [email protected]. Include ``State Offices of 
Rural Health Grant Program'' in the subject line of the message.
     Mail: Keith Midberry, Office of Rural Health Policy, 
Health Resources and Services Administration (HRSA), 5600 Fishers Lane, 
Room 9A-42, Rockville, MD 20857.
     Hand Delivery/Courier: Keith Midberry, Office of Rural 
Health Policy, Health Resources and Services Administration (HRSA), 
5600 Fishers Lane, Room 9A-42, Rockville, MD 20857.
    Docket: For access to the docket to read background documents or 
comments received, go to the Office of Rural Health Policy, Health 
Resources and Services Administration (HRSA), 5600 Fishers Lane, Room 
9A-42, Rockville, Maryland, 20857, weekdays between the hours of 8:30 
a.m. and 5 p.m. To schedule an appointment to view public comments, 
phone (301) 443-2669.

FOR FURTHER INFORMATION CONTACT: Keith Midberry, at the above address, 
telephone number 301-443-2669.

SUPPLEMENTARY INFORMATION: The HRSA State Offices of Rural Health 
(SORH) Grant Program is authorized by Section 338J of the Public Health 
Service Act (42 U.S.C. 254r). The purpose of the SORH grant program is 
to assist States in strengthening their rural health care delivery 
systems by helping to support a focal point for rural health within 
each State. The program provides funding for an institutional framework 
that links rural hospitals, providers and communities with State and 
Federal resources to help develop long term solutions to rural health 
problems. The law provides for a Federal-State partnership, requiring a 
State funding match of $3 for each $1 of Federal funding. Over the past 
16 years, this program has leveraged in excess of $175 million in State 
matching funds for rural health. The average annual award for each 
State is $150,000.
    The SORH program issues one award to a single grantee from each of 
the 50 States. The law requires that the governor designate the entity 
that will serve as the State's SORH. Currently, 37 of the Offices are 
located in State health departments, 10 in academic settings (9 
universities and 1 junior college) and 3 are non-profit organizations. 
Grant funds enable each State grantee to conduct the following 
activities:
    (1) Establish and maintain within the State a clearinghouse for 
collecting and disseminating information on--
    (A) Rural health care issues;
    (B) Research findings relating to rural health care; and
    (C) Innovative approaches to the delivery of health care in rural 
areas;
    (2) Coordinate the activities carried out in the State that relate 
to rural health care, including providing coordination for the purpose 
of avoiding duplication in such activities;
    (3) Identify Federal, State, and nongovernmental programs regarding 
rural health, and provide technical assistance to public and nonprofit 
private entities regarding participation in such programs;
    (4) Encourage, but not directly fund, the recruitment and retention 
of health professionals in rural areas; and
    (5) Assist in strengthening State, local and Federal partnerships 
in rural health.
    Since 2001, SORH grant guidance has limited indirect cost recovery 
to not more than 15 percent of the Federal award regardless of whether 
the grantee has a higher negotiated rate agreement. The grant program 
initiated this limitation on the recoverable indirect costs because 
some grantees are located within universities that have established 
indirect cost rate agreements in the range of 30 to 50 percent. In 
adhering to the existing GPD policy, as much as 50 percent of grants 
funds could be consumed for administrative and other purposes by the 
host institution, which would significantly reduce the amount of funds 
available to carry out the objectives of the authorizing legislation 
and grant program. Maintaining an indirect cost limitation will enable 
awardees to continue to invest 85 percent (or more) of their grant 
funds for activities that help improve health care in rural 
communities. Not restricting indirect cost recovery would reduce the 
amount of funds available to improve rural health care and erode 
sixteen years of SORH success.
    To maintain the limit on indirect costs in the 2008 grant funding 
opportunity guidance, a request to deviate from the Department of 
Health and Human Services (DHHS) Grants Policy Directive (GPD) 3.01, 
Indirect Costs and Other Cost Policies was required. Such a request was 
submitted and approved by the HHS, Office of Grants Policy, Oversight 
and Evaluation, Assistant Secretary for Resources and Technology in 
November, 2007.

Public Comment

    HRSA invites public comment on its intent to indefinitely limit 
indirect cost recovery to not more than 15 percent of the total 
allowable direct costs for awardees of the State Offices of Rural 
Health Grant Program.

    Dated: January 7, 2008.
Elizabeth M. Duke,
Administrator.
 [FR Doc. E8-551 Filed 1-14-08; 8:45 am]
BILLING CODE 4165-15-P