HHS’s end of voluntary comment periods hit grantees hardest and Medicare providers least
By rescinding the Richardson Waiver, HHS stopped offering notice and comment where the law did not require it. The loss of warning fell unevenly: heavily on grant recipients, moderately on contractors, and lightly on Medicare providers, whose statute still requires comment.
Looking Back revisits one week at a time, from January 2020 to today, and asks what it meant for the banks, health systems and public agencies we serve. The series was written in 2026, with the benefit of hindsight, and each article says which week it looks back on.
The week
On March 3, 2025, HHS published in the Federal Register a policy statement, signed by Secretary Robert F. Kennedy Jr. on February 28, rescinding the Richardson Waiver. That 1971 policy had committed the department to use notice-and-comment rulemaking voluntarily for matters relating to grants, benefits, contracts, loans and public property, even though the Administrative Procedure Act exempts those matters. HHS said it would follow the text of the Act and use notice and comment only where legally required, effective immediately. A month earlier, NIH had capped indirect cost rates on research grants at 15 percent in a notice issued without comment and effective almost at once. A federal court in Massachusetts had blocked it. Commentators noted that Medicare rules were largely unaffected, because the Medicare statute separately requires notice and comment for most substantive regulations.
A change to rulemaking procedure rarely reaches a boardroom. This one should have. Notice and comment gives regulated organizations two things: a chance to shape a rule, and warning that a rule is coming. For decades the Richardson Waiver had extended both to parts of HHS’s work where the law did not require them. Its rescission removed them there, but not everywhere, and the difference is the useful part.
A health organization relates to HHS in up to three ways, and each carries a different level of procedural protection after the change. As a grant recipient, it lost most of its warning. As a contractor or vendor, it was always governed mainly by contract and procurement law, so it lost less. As a provider or plan in Medicare, it kept most of its warning, because a separate statute requires it. Medicaid sits in between. Mapping an organization’s revenue across these three relationships shows how much of it is now exposed to change without comment.
Grant recipients: the largest loss of warning
Academic medical centers, research institutes, community health centers and public health departments depend on HHS grants and cooperative agreements. Grant terms, indirect cost policy, allowable costs, eligibility and priorities can now change through notices and policy statements with immediate effect. The NIH indirect cost notice showed what that looks like: a change worth large sums to research institutions, announced on a Friday and effective the next business day.
The practical consequence is less lead time, so planning has to substitute for it. Research finance teams can model the effect of plausible changes, such as lower indirect cost rates or new certification conditions, on each department and on the institution’s cash position. They can identify which grant-funded positions and commitments would be hardest to unwind, and decide in advance what bridge funding, if any, the institution would provide. Legal challenges remain available, and courts proved receptive to some in 2025, but litigation is slow and its outcome uncertain. Counsel should advise on what procedural protections still apply to specific programs, since some program statutes impose their own requirements.
Comment still has a role where it is offered. Some grant-making components continued to publish requests for information, and associations still met with agency staff. The difference is that participation became optional for the agency, so influence shifted toward relationships and data. An institution that can quickly show, with its own figures, how a proposed change would affect patients, trainees or research output gives its association something concrete to bring to those meetings. Preparing that evidence before a change is announced, for the policies most likely to move, is the closest substitute for a formal comment period.
Contractors and vendors: exposure through the contract, not the rule
Health IT firms, consultancies, research organizations and service providers that contract with HHS agencies were less dependent on the waiver to begin with. Their rights sit mainly in their contracts and in federal procurement law, which continued to apply. What changed in early 2025 was the policy environment around contracts. Agencies reviewed and terminated contracts across government as part of a broad effort to cut spending, and new conditions could be attached to awards with little notice.
For contractors, the controls are commercial. Review termination-for-convenience provisions and what costs they allow to be recovered. Track which contracts depend on discretionary priorities rather than statutory mandates, since the latter are harder to cancel. Shorten planning horizons for renewals and diversify the customer base where possible. A contractor that serves both HHS and states running HHS-funded programs should map how a federal change would flow through to its state work, because state agencies often adjust within weeks.
Medicare providers and plans: protected by statute, with a Medicaid gap
Hospitals, physicians and health plans in Medicare are the best protected. The Medicare statute requires notice and comment for most rules that set or change substantive standards for payment and coverage. The annual payment rules continued to move through proposed and final stages, with comment periods intact. For a hospital, the fee schedules and payment systems that drive most Medicare revenue still arrive with months of warning.
Medicaid is different. It runs through federal-state partnership and relies heavily on guidance, state plan amendments, waivers and letters to state officials, much of which was never subject to notice and comment. Providers with large Medicaid populations therefore need to watch guidance and waiver decisions as closely as formal rules, and to follow their state Medicaid agency, where federal changes take effect.
Across all three relationships, early warning now depends more on the organization’s own monitoring. In many health organizations, government relations, compliance, the research office and finance each watch a different part of HHS. Combining those signals into a short monthly executive briefing, organized by relationship and revenue at stake, turns scattered awareness into planning and gives the board a single view of regulatory exposure.
With hindsight
The rescission stood through 2025. HHS changed many grant terms during the year, attached new conditions tied to administration priorities and terminated grants in deprioritized areas, often with little notice. Many of those actions were challenged in court with mixed results. The NIH indirect cost cap did not survive: a federal district court permanently blocked it in April 2025, and in January 2026 the First Circuit affirmed, relying in part on an appropriations rider and on HHS’s own regulations. Medicare payment rules kept moving through notice and comment as the statute requires. The pattern matched the exposure map here. Grant-dependent organizations, particularly academic medical centers and community-based providers, faced the most abrupt changes; Medicare-dominated providers had the most notice; Medicaid-heavy providers found the decisive changes arriving through legislation and state implementation.