By: Allen Pinn, Manager, Policy 

Federal grants support research, education, outreach, navigation, and other programs designed to improve health and well-being. For patient organizations, this funding helps ensure that the experiences and needs of people with chronic diseases and disabilities are reflected in research, public health initiatives, and other federally supported programs. 

On July 13, the National Health Council (NHC) submitted comments to the Office of Management (OMB) and Budget’s proposed rule, Regulation for Federal Financial Assistance. The proposal would make changes to the policies governing federal assistance, including how funding opportunities are structured, how applications are reviewed, and how federal agencies make and administer grant awards. It generated over 500,000 responses from nonprofit, research, and public health communities, underscoring how consequential these changes could be for organizations and the people they serve. 

The proposed rule is currently slated to take effect Oct. 1, 2026, if finalized, but its implementation has also become part of ongoing government funding negotiations. A continuing resolution passed by the Senate would delay implementation until Dec. 11, 2026, while the version passed by the House of Representatives would not. The NHC continues to monitor developments as Congress considers how to proceed. 

What the Proposed Rule Could Change 
The proposed rule could reshape nearly every stage of the federal grantmaking process. Of particular concern, it could expand agencies’ discretion to terminate or suspend awards for reasons unrelated to recipient noncompliance, including changing agency priorities or broad national-interest determinations, while providing recipients limited opportunities to object or appeal. 

It would also increase senior political appointees’ involvement in award review in ways that could undermine scientific, merit-based, and patient-centered review. These changes could create significant uncertainty for nonprofits and research institutions seeking and managing federal awards. 

NHC Key Recommendations 
The NHC recommended that OMB withdraw the proposed rule. If OMB moves forward, it should address several significant concerns. 
 
Preserve peer review, patient engagement, and science-based decision-making. The NHC recommends revising § 200.205 to clarify that pre-issuance review may confirm legal compliance, consistency with the notice of funding opportunity, availability of funds, and documented programmatic fit. It should not introduce unpublished selection criteria or rely on vague policy standards that could override established review processes. 

Protect equity, disability inclusion, language access, and patient engagement. The final rule should comply with federal civil rights law and avoid provisions that could discourage grant recipients from engaging underserved populations or collecting valuable information from a broad range of patients and communities. 

Protect patient organizations’ ability to participate in federal programs. Patient organizations are a critical part of the research and public health infrastructure. Federal award recipients rely on these organizations to form community partnerships and fulfill commitments to patients. If award status can change unexpectedly, organizations may become less willing to accept federal funds, weakening networks of trusted partners and the programs they support. 

More of the NHC’s recommendations are available in its full comments to OMB. 

Keep Patients at the Center 
Federal grantmaking policy may be technical, but its consequences are real. Decisions about how grants are awarded and administered can influence which organizations participate in federal programs, what research moves forward, and what services and resources remain available in communities across the country. 

As OMB and Congress consider the future of the proposed rule, the NHC urges policymakers to carefully assess its effects on nonprofit organizations and the patients and communities they serve. Federal grantmaking should promote accountability and innovation while preserving scientific integrity and meaningful participation by organizations with the expertise necessary to help federal programs succeed.