Legal Update, December 2019

Legal Update


Starting January 1, 2020, Elizabeth ‘Issie’ Karan will embark on a new phase in her relationship with the Hemophilia Alliance and its member HTCs. Issie will continue to provide services to members but under her own newly formed law firm, the Karan Legal Group PLLC. Michael B. Glomb also will continue in his role but remain a partner at Feldesman Tucker Leifer Fidell LLP. Members can contact Issie at and Mike at The legal team looks forward to many productive conversations with members in 2020.

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Foundations for Grant Compliance: Rules Exist Even When Ignored
By Elizabeth “Issie” Karan

As 2019 draws to a close, rather than rehashing the myriad of grant-related questions that members asked the legal team, we would like to reiterate the primary sources for understanding appropriate expenditures in the Hemophilia Treatment Center (HTC) grant program. Often, the legal team utilizes these resources to answer grant-related inquires and interpret compliance concerns.

All grants begin with an authorizing statute. Section 501(a)(2) of the Social Security Act authorizes the HTC program as a special project of regional and national significance (SPRANS). The statute authorizes funding for:

“Research, and training with respect to maternal and child health and children with special health care needs (including early intervention training and services development), for genetic disease testing, counseling, and information development and dissemination programs, for grants (including funding for comprehensive hemophilia diagnostic treatment centers) relating to hemophilia without regard to age, and for the screening of newborns for sickle cell anemia, and other genetic disorders and follow-up service.” (emphasis added)

The language of the statute is further interpreted by guidance from the Maternal and Child Health Bureau (MCHB), such as the Notice of Funding Opportunity (NOFO). Core Regional HTCs respond to the NOFO in order to receive grant funding. The NOFO provides insight into MCHB’s perspective on how HTCs should operate and the purposes of the program.

MCHB issues a Notice of Funding Award (NOFA) to each Core Regional HTC. The NOFA functions as the agreement between MCHB and the Core Regional HTC regarding the requirements for grant expenditures. Typically, the NOFA identifies conditions for expenditure of grant funds, time periods for expenditures, reporting obligations, and other requirements. Each Regional Core HTC’s application for funding also functions as part of their agreement with MCHB governing how funds will be expended.

Most HTCs participate in the program as subrecipients of grant funds under an agreement with their Regional Core HTC. These agreements are often referred to as “sub-awards” or “sub-recipient agreements.” HTCs must abide by the terms of their contract with the Regional Core HTCs. Often Regional Core HTCs incorporate their NOFA into this agreement.

All grants made by the Department of Health and Human Services are governed by the Uniform Grants Guidance at 45 CFR Part 75 (UGG). Importantly, the UGG includes the Cost Principles at Subpart E, which identify specific items of costs that may or may not be allowed under the rules. Additionally, the UGG defines program income, sets standards for procurement, and identifies restrictions on obtaining real property.

The Hemophilia Treatment Center Manual for 340B Participation (Manual), written by MCHB and available on the Hemophilia Alliance website, provides background information and practical advice on how HTCs can operate in compliance with 340B policy and related HTC program policy. Notably, the Manual contains information on program income, stating it must be used for “patient care and supportive services necessary to provide comprehensive care to patients.” The Manual also states that the grants awarding office may, on a case-by-case basis, allow a grantee to use the income for eligible costs that might not be expressly allowable costs under the terms and conditions of the award. Such cases require prior written approval from the grants awarding office. For HTCs, MCHB is the grants awarding office. Since most HTCs do not have a contract directly with MCHB, they must rely on their Core Regional HTC for prior written approval of expenditures. For example, the UGG’s Cost Principles do not allow the expenditure of grant funds for international travel. As such, prior to undertaking such an expense, HTCs must obtain prior written approval from their Core Regional Center, which likely will need to get approval from MCHB.

We recommend that HTCs keep these documents readily available and consult them as issues arise. As always, the legal team is available to help HTCs understand these resources and provide guidance.

Also in this Issue…

Notes from Joe
· 2019 Recap

Payer Update

Washington Update

Notes from the Community
· Emergency Guides Available

Alliance Update
· Reminder: 2020 340B Program HRSA Grantee Recertification Period Begins in January
· Operations Update
· 2020 Meeting Schedule