On November 18, 2025, the U.S. Department of Health and Human Services (HHS) released updates to its adoption of Federal grant regulations in the Uniform Guidance at 2 C.F.R. Part 300. As noted in the Federal Register last year (89 FR 80055), HHS continues its phased transition away from 45 C.F.R. Part 75 toward the government-wide Uniform Guidance. As of October 1, 2025, HHS fully adopted 2 C.F.R. Part 200 in place of Part 75.

Below is a summary of key HHS-specific modifications and additions to the Uniform Guidance released on November 18:

Funded Research: Updated Conflict of Interest Requirements − § 300.112

HHS adopts and cross-references the government-wide Conflict of Interest rule at 2 C.F.R. § 200.112, which requires agencies to establish conflict-of-interest policies for Federal awards and requires disclosures from grant recipients. In addition, HHS now directs its constituent funding agencies to issue specific policies addressing “outside activities, relationships or financial interests,” including when such interests are permissible or impermissible.

Among new requirements, grantees should provide funding agencies advance notification of outside activities and interests. Grantees should expect HHS funding agencies to define what constitutes “advance” notice and to outline related administrative reporting expectations. Moreover, HHS also directs agencies to align conflict-of-interest policies with Public Health Service research integrity regulations in 42 C.F.R. Part 50, Subpart F.

For-Profit Entities − § 300.218

For-profit organizations remain prohibited from earning profit on Federal grants, except for Small Business Innovation Research and Small Business Technology Transfer Research (SBIR/STTR) grants, where limited profit is permissible. In addition, the updated rule provides two audit options for for-profit grantees, described in terms familiar to nonprofit grantees under Subpart F of the Uniform Guidance: (1) a financial-related audit conducted in accordance with Generally Accepted Government Auditing Standards (“GAGAS”), if all Federal awards are from HHS programs; or (2) an audit that meets the requirement of 2 CFR 200, Subpart F.

National Policy Requirements − § 300.300

HHS rule cross-references 2 C.F.R. § 200.300(a), which requires agencies to implement awards consistent with the U.S. Constitution, applicable Federal statutes and regulations. The new regulation reiterates longstanding Federal policy prohibiting discrimination in the participation in HHS programs, “to the extent doing so is prohibited by Federal statute.”

Notably, the new rule requires that HHS must “follow all applicable Supreme Court decisions” in administering its programs. The regulation also states that HHS must “follow all applicable Supreme Court decisions” in administering its programs. Although largely declaratory, this provision is notable for its silence concerning lower federal court rulings, which remain binding unless overturned.

The new rule also reaffirms that sex discrimination includes discrimination based on sexual orientation and gender identity, consistent with the Supreme Court’s decision in Bostock v. Clayton County, 590 U.S. 644 (2020).

Moreover, the new rule specifies procedures for grantees to seek exemption, under Federal religious freedom or conscience protections, from application of regulations to “specific contexts, procedures, or services” that “the applicant asserts will violate their religious or conscience beliefs.” While grantee’s exemption request is under consideration, HHS will not undertake investigation or enforcement activity or will pause any such activity already commenced, predicated on allegations that grantee’s practice is contrary to law or regulation.

HHS Grants and States Cash Management − § 300.305

If not otherwise addressed in a State’s agreement with Treasury pursuant to the Cash Management Improvement Act, States must expend program income, rebates, refunds, audit recoveries, and interest before requesting additional Federal cash payments under grants.

Intangible Property and Funded Inventions in Educational Purposes Grants − § 300.315

This provision reaffirms an HHS grant recipient’s right to secure patent rights in funded inventions under 2 C.F.R. §200.315(c), 37 C.F.R. Part 401, and the Patent and Trademark Law Amendments Act (“Bayh-Dole Act”). It also clarifies that recipients are able to retain exclusive rights to inventions (free of Federal agency rights) made under scholarships, fellowships, training grants, or other awards made primarily for educational purposes.

Allocating Costs Among Independent and Sponsored Research − § 300.477

The new rule, previously codified at 45 CFR 75.476, directs HHS funding agencies to allocate indirect costs to independent research and development on the same basis as indirect costs are allocated to Federally sponsored research and development. This clarification reiterates cost principles that a grantee’s cost allocation practices must treat federally financed and other grantee activities uniformly. See, e.g., 2 C.F.R. § 200.403(c).

Costs for R&D in Hospital Grants: Appendix IX to Part 300

Appendix IX, which governs cost principles for research and development funded through hospital grants, remains substantively unchanged from its predecessor in Part 75.

Feldesman LLP will continue to monitor and assess regulatory and judicial developments impacting HHS awards.  If you have any questions, please contact Phillip Escoriaza or Adam Oppenheim.

Stay current on key federal grants updates by joining Feldesman’s Monthly Briefings for Federal Grantees: Key Updates and Developments webinar. The next session will take place on December 16, 2025 at 1 p.m. ET.