What happens if an RHTP subrecipient falls out of compliance?

What CMS counts as noncompliance

The funding notice lists violations including (CMS Notice of Funding Opportunity CMS-RHT-26-001 (via Grants.gov)):

• Using funds for unapproved or restricted activities
• Not following through on state policy commitments
• Failing to submit required reports
• Failing to follow through on other actions in the approved application
• Violating award terms and conditions
• Improperly managing or using funds, including fraud, waste, abuse and criminal activity

How CMS responds

• 90 days to remedy after notice, which may include a remediation plan.
• If not remedied, CMS may recover past payments and withhold future payments of both baseline and workload funding.
• For violations tied to a technical score, withholding or recovery is proportional to the funding that score earned. Other violations are case-by-case, and all prior and future payments become eligible for withholding or recovery.
• Withheld or recovered amounts are returned to the U.S. Treasury, as required by Public Law 119-21 (CMS Notice of Funding Opportunity CMS-RHT-26-001 (via Grants.gov)).
• The statute bars administrative or judicial review of amounts withheld, reduced or recovered (Public Law 119-21, Section 71401 (statutory text, CMS)).
• CMS may also suspend or terminate an award under 2 CFR 200.340 (CMS Notice of Funding Opportunity CMS-RHT-26-001 (via Grants.gov)).

Unspent money is also at risk

Money a state has not spent by the end of the following fiscal year is redistributed. Funds that are earmarked but not paid out do not count as spent (CMS Notice of Funding Opportunity CMS-RHT-26-001 (via Grants.gov)). States are therefore pushing subrecipients to obligate and spend on schedule.

What this means for a rural subrecipient

States are accountable for subrecipient compliance (CMS Notice of Funding Opportunity CMS-RHT-26-001 (via Grants.gov)), and the Uniform Guidance gives pass-through entities remedies for noncompliance, including withholding payments, disallowing costs and suspending or terminating subawards (2 CFR 200.339; eCFR). The specific consequences for your organization are set by your subaward agreement, so read it closely. Typical risks are disallowed costs you must repay, delayed reimbursement and weaker standing for later funding rounds.

Common questions

How long does a state have to fix RHTP noncompliance?

90 days after CMS notifies it of a violation, according to the CMS funding notice. Remediation may include a remediation plan.

Where does recovered RHTP money go?

To the U.S. Treasury, as required by Public Law 119-21. It is not returned to the state.

Can a subrecipient have to repay RHTP funds?

Possibly. Under its subaward and 2 CFR 200.339, a state can disallow costs and seek repayment, withhold payments, or suspend or terminate a subaward.

Sources

1. CMS Notice of Funding Opportunity CMS-RHT-26-001 (via Grants.gov)
2. Public Law 119-21, Section 71401 (statutory text, CMS)
3. eCFR: 2 CFR Part 200 (Uniform Guidance), incl. 200.101(b)(1), 200.332, 200.339, 200.501

More from the RHTP Guide

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HealthRoots.ai is independent and is not affiliated with or endorsed by CMS or any state agency. This page is general information, not legal advice; always confirm requirements in your own award documents and with your state RHTP office.