Department of Health and Human Services January 2008 – Federal Register Recent Federal Regulation Documents

The Health Resources and Services Administration (HRSA) is requesting nominations to fill vacancies on the Advisory Committee on Organ Transplantation (ACOT). The ACOT was established by the Amended Final Rule of the Organ Procurement and Transplantation Network (OPTN) (42 CFR part 121) and, in accordance with Public Law 92-463, was chartered on September 1, 2000.

Under the provisions of section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, the National Institute of Child Health and Human Development (NICHD), the National Institutes of Health (NIH) has submitted to the Office of Management and Budget (OMB) a request for review and approval of the information collection listed below. This proposed information collection was previously published in the Federal Register on November 19, 2007, pages 65047-8, and allowed 60 days for public comment. One comment was received questioning the utility of the proposed data collection. The purpose of this notice is to allow an additional 30 days for public comment. The National Institutes of Health may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number. Proposed Collection: Title: Formative Research and Pilot Studies for the National Children's Study. Type of Information Collection Request: New. Need and use of information collection: The NICHD seeks to obtain OMB's generic approval to conduct formative research and pilot studies to be used in the development of instruments, materials, and procedures for the National Children's Study (NCS). The NCS is a long-term cohort study of environmental influences on child health and development authorized under the Children's Health Act of 2000. Further details pertaining to the NCS background and planning, including the NCS Research Plan, can be found at: https://nationalchildrensstudy.gov. The proposed data collection program will include community outreach materials, medical provider and participant materials, questionnaires and measures, use of technology such as Interactive Voice Recognition (IVR), and other aspects related to data collection. Activities will include small focused studies to test data collection items and methods on a specific or targeted population, validation of questionnaires for targeted populations, focus groups within the NCS communities to test forms and procedures, cognitive interviews to test data items, and the use of materials on targeted populations such as medical providers and hospitals, and materials translated into other languages. These activities will be conducted over the life of the study to develop procedures and materials for each stage of data collection. The results of these pilot tests will be used to maximize the efficiency of study procedures, materials, and methods for community outreach, engagement of the medical community, for recruiting and retaining study subjects prospectively across study visits and to ensure that data collection methodologies are efficient and valid for all potential participants. Without this information, NCS will be hampered in its efforts to effectively publicize the NCS, gain public and professional support, and effectively recruit and retain respondents and collect data over the life of the Study. Affected entities: Individuals. Types of respondents: People potentially affected by this action are pregnant women or women of childbearing age, their husbands or partners, health care professionals, and community leaders. The annual reporting burden is as follows: Estimated Number of Respondents: 3,150. Frequency of Response: On occasion (see Burden table). The Estimated Number of Responses per Respondent: 1. Average Burden Hours Per Response: Varies with study type. Estimated Total Annual Burden Hours Requested: 5,825. The estimated annualized cost to respondents is $114,250 (based on rates listed in the burden table). There are no Capital Costs to report. There are no Operating or Maintenance Costs to report.

The Food and Drug Administration (FDA) is announcing the availability of the guidance entitled ``Recommendations for Clinical Laboratory Improvement Amendments of 1988 (CLIA) Waiver Applications for Manufacturers of In Vitro Diagnostic Devices.'' FDA is issuing this guidance to recommend approaches for determining whether a laboratory test may be performed by laboratories with a certificate of waiver under CLIA.

This notice announces the 23rd meeting of the American Health Information Community Population Health and Clinical Care Connections Workgroup in accordance with the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App.).

This notice announces the 21st meeting of the American Health Information Community Electronic Health Records Workgroup in accordance with the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App.)

This notice announces the 22nd meeting of the American Health Information Community Chronic Care Workgroup in accordance with the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App.)

This notice announces the 17th meeting of the American Health Information Community Confidentiality, Privacy, and Security Workgroup in accordance with the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App.).

This proposed rule would update the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs). In addition, we are proposing to consolidate the annual July 1 update for payment rates and the October 1 update for Medicare severity long-term care diagnosis related group (MS-LTC-DRG) weights to a single fiscal year (FY) update. In this proposed rule, we are also clarifying various policy issues. This proposed rule would also describe our evaluation of the possible one-time adjustment to the Federal payment rate.

The Health Resources and Services Administration published a meeting notice for the National Advisory Council on the National Health Service Corps in the Federal Register of January 15, 2008 (FR Doc. E8- 581), on page 2510. The beginning date of the meeting has changed.

The Food and Drug Administration (FDA) is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act of 1995 (the PRA), Federal agencies are required to publish notice in the Federal Register concerning each proposed collection of information, including each proposed extension of an existing collection of information, and to allow 60 days for public comment in response to the notice. This notice solicits comments on the notification and recordkeeping requirements for persons exporting human drugs, biological products, devices, animal drugs, food, and cosmetics that may not be marketed or sold in the United States.

The Food and Drug Administration (FDA) is announcing that a collection of information entitled ``Survey of Food Safety and Nutrition Information Provided to Pregnant Women by Health Care Providers and WIC Educators'' has been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995.

This notice announces the request for nominations for consideration for membership on the Medicare Evidence Development and Coverage Advisory Committee (MedCAC). We are requesting nominations for both voting and nonvoting members to serve on the MedCAC. Nominees are selected based upon their individual qualifications and not as representatives of professional associations or societies. We have a special interest in ensuring that women, minority groups, and physically challenged individuals are adequately represented on the MedCAC. Therefore, we encourage nominations of qualified candidates from these groups. The MedCAC reviews and evaluates medical literature, reviews technology assessments, and examines data and information on the effectiveness and appropriateness of medical items and services that are covered or eligible for coverage under Medicare. The MedCAC advises the Secretary of the Department of Health and Human Services (the Secretary) and the Administrator of the Centers for Medicare and Medicaid Services (CMS), as requested by the Secretary, whether medical items and services are reasonable and necessary under Title XVIII of the Social Security Act.

The following represents a series of respondents' comments and the Health Resources and Services Administration's (HRSA) responses to the comments regarding the Federal Register notice (FRN): September 19, 2006 (71 FR 54829). The FRN proposed strategies to support health information technology (HIT) among safety net providers, and requested comments on HIT topic areas addressing quality improvement, collaboration, general network-related issues, specific health center controlled network (HCCN) related issues, sustainability and building HIT capacity. HRSA received a total of 53 comments from a broad range of stakeholders, including State health departments, non-profit organizations, individual healthcare providers and the health information technology industry. HRSA's responses reflect activities within the Office of Health Information Technology (OHIT) that include, but are not limited to, the development of an HRSA HIT strategic plan, technical assistance resources including the establishment of the HRSA HIT virtual community, the development of HIT online toolboxes tailored to the needs of various HRSA programs, a TA resource center, and the development of funding opportunities. The comments have helped, in part, to shape the direction and activities of OHIT.

The Food and Drug Administration (FDA) is requesting nominations for voting consumer representatives to serve on the Cellular, Tissue, and Gene Therapies Advisory Committee and the Allergenic Products Advisory Committee in the Center for Biologics Evaluation and Research (CBER). Nominations will be accepted for vacancies that will occur through August 31, 2008.

The NIOSH, National Personal Protective Technology Laboratory (NPPTL), is currently reevaluating its limitations on and precaution for safe use of positive-pressure closed-circuit self-contained breathing apparatus. As stated in the Federal Register (Vol. 50, No. 222, pages 47456-47457 dated Monday, November 18, 1985) NIOSH's position on this topic is that:

The inventions listed below are owned by an agency of the U.S. Government and are available for licensing in the U.S. in accordance with 35 U.S.C. 207 to achieve expeditious commercialization of results of federally-funded research and development. Foreign patent applications are filed on selected inventions to extend market coverage for companies and may also be available for licensing.

Under the provisions of Section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, the National Cancer Institute (NCI), the National Institutes of Health (NIH), has submitted to the Office of Management and Budget (OMB) a request to review and approve the information collection listed below. This proposed information collection was previously published in the Federal Register on November 6, 2007 (Vol. 72, No. 214, p. 62660) and allowed 60-days for public comment. One public comment was received on November 6, 2007 which questioned why AARP was not funding this study as opposed to using NIH funds. An e-mail response was sent on January 14, 2008 stating, ``We received your comment. We will take your comments into consideration''. The purpose of this notice is to allow an additional 30 days for public comment. The National Institutes of Health may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number. Proposed Collection: Title: NIH-American Association for Retired Persons (AARP) Short Follow-Up Questionnaire 2008 (NCI). Type of Information Collection Request: New. Need and Use of Information Collection: The purpose of this short 2-page questionnaire is to obtain information on 18 different medical conditions, several medical procedures, and lifestyle characteristics from 513,225 participants of the NIH-AARP Diet and Health Study. The questionnaire will support the ongoing examination between cancer and nutritional exposures. This questionnaire adheres to The Public Health Service Act, Section 412 (42 U.S.C. 285a-1) and Section 413 (42 U.S.C. 285a-2), which authorizes the Division of Cancer Epidemiology and Genetics of the National Cancer Institute (NCI) to establish and support programs for the detection, diagnosis, prevention and treatment of cancer; and to collect, identify, analyze and disseminate information on cancer research, diagnosis, prevention and treatment. Frequency of Response: Once. Affected Public: Individuals. Type of Respondents: U.S. adults (persons aged 50-85). The annual reporting burden is as follows: Estimated Number of Respondents: 513,225; Estimated Number of Responses per Respondent: 1; Average Burden Hours Per Response: .0668; and Estimated Total Annual Burden Hours Requested: 34,283. The annualized cost to respondents is estimated at: $302,158. There are no Capital Costs, Operating Costs, and/or Maintenance Costs to report.

The inventions listed below are owned by an agency of the U.S. Government and are available for licensing in the U.S. in accordance with 35 U.S.C. 207 to achieve expeditious commercialization of results of federally-funded research and development. Foreign patent applications are filed on selected inventions to extend market coverage for companies and may also be available for licensing.

The inventions listed below are owned by an agency of the U.S. Government and are available for licensing in the U.S. in accordance with 35 U.S.C. 207 to achieve expeditious commercialization of results of federally-funded research and development. Foreign patent applications are filed on selected inventions to extend market coverage for companies and may also be available for licensing.

The inventions listed below are owned by an agency of the U.S. Government and are available for licensing in the U.S. in accordance with 35 U.S.C. 207 to achieve expeditious commercialization of results of federally-funded research and development. Foreign patent applications are filed on selected inventions to extend market coverage for companies and may also be available for licensing.

This Federal Register notice seeks the input and recommendations of interested parties as OIG revises the compliance program guidance (CPG) for nursing facilities, especially those serving Medicare, Medicaid, and other Federal health care program beneficiaries. The nursing home industry has experienced a number of changes since OIG first published a CPG in this area (65 FR 14289; March 16, 2000). Additionally, the subsequent years of enforcement and compliance activity in the nursing home industry has allowed OIG to address more fully the various risk areas in nursing home compliance. In evaluating the contents of the nursing facility CPG, OIG is soliciting comments, recommendations, and other suggestions from concerned parties and organizations on how best to revise the nursing facility CPG to address relevant compliance issues. Specifically, OIG seeks comments addressing any changes to existing risk areas and introducing any new risk areas.

The Food and Drug Administration (FDA) is amending the animal drug regulations to reflect approval of an abbreviated new animal drug application (ANADA) filed by Novopharm Ltd. The ANADA provides for the veterinary prescription use of clindamycin hydrochloride oral capsules in dogs for the treatment of various infections due to susceptible bacterial pathogens.

The Department of Health and Human Services (HHS) gives notice of a determination concerning a petition to add a class of employees at the Y-12 Plant, Oak Ridge, Tennessee, to the Special Exposure Cohort (SEC) under the Energy Employees Occupational Illness Compensation Program Act of 2000 (EEOICPA), 42 U.S.C. 7384q. On December 14, 2007, the Secretary of HHS determined that the following employees do not meet the statutory criteria for addition to the SEC as authorized under EEOICPA:

Notice is hereby given that the Office of Research Integrity (ORI) and the Assistant Secretary for Health have taken final action in the following case: Scott E. Monte, Huntington Memorial Hospital: Based on the findings of an investigation conducted by Huntington Memorial Hospital (HMH) and information obtained by the Office of Research Integrity (ORI) during its oversight review, the U.S. Public Health Service (PHS) found that Scott E. Monte, L.V.N., former Clinical Research Associate, HMH, engaged in scientific misconduct by knowingly and intentionally falsifying and fabricating clinical research records in HMH cancer prevention and treatment protocols supported by National Cancer Institute (NCI), National Institutes of Health (NIH), awards U10 CA69651, U10 CA12027, U10 CA32012, and U10 CA86004. Specifically, Mr. Monte knowingly and intentionally: (1) Entered falsified and fabricated laboratory data or physical examination results on five (5) research protocol case report forms (CRFs); (2) Falsified a gynecological examination report in a physician's progress note and entered the falsified document in the patient's research chart; and (3) Fabricated progress notes for four patients and a case report form for one of these patients. ORI has implemented the following administrative actions for a period of three (3) years, beginning on January 7, 2008: (1) Dr. Monte is debarred from any contracting or subcontracting with any agency of the United States Government and from eligibility or involvement in nonprocurement programs of the United States Government pursuant to HHS' implementation of the OMB Guidelines to Agencies on Governmentwide Debarment and Suspension at 2 CFR Part 376; and (2) Dr. Monte is prohibited from serving in any advisory capacity to PHS, including but not limited to service on any PHS advisory committee, board, and/or peer review committee, or as a consultant.

This notice provides an update of the HHS poverty guidelines to account for last calendar year's increase in prices as measured by the Consumer Price Index.

The Food and Drug Administration's (FDA's) Center for Biologics Evaluation and Research (CBER) is reannouncing the invitation for participation in its Regulatory Site Visit Training Program (RSVP). This training program is intended to give CBER regulatory review, compliance, and other relevant staff an opportunity to visit biologics facilities. These visits are intended to allow CBER staff to directly observe routine manufacturing practices and to give CBER staff a better understanding of the biologics industry, including its challenges and operations. The purpose of this notice is to invite biologics facilities to contact CBER for more information if they are interested in participating in this program.

The Food and Drug Administration (FDA) is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act of 1995 (the PRA), Federal agencies are required to publish notice in the Federal Register concerning each proposed collection of information, including each proposed extension of an existing collection of information, and to allow 60 days for public comment in response to the notice. This notice solicits comments on the proposed collection of information resulting from the guidance to manufacturers of veterinary and human drugs, including human biological drug products, on how to resolve disputes of scientific and technical issues relating to current good manufacturing practice (CGMP).

This interim final rule with comment period implements the continuation of the revisit user fee program for Medicare Survey and Certification activities, in accordance with the statutory authority in the Continuing Appropriations Resolution entitled, ``Making further continuing appropriations for the fiscal year 2008, and for all other purposes,'' Public Law 110-137 (``Continuing Resolution'') passed by the Congress and signed by the President on December 14, 2007. On September 19, 2007, we published a final rule that established a system of revisit user fees applicable to health care facilities that have been cited for deficiencies during initial certification, recertification or substantiated complaint surveys and require a revisit to confirm that previously-identified deficiencies have been corrected.

This proposed rule provides guidance to States that want to administer self-directed personal assistance services through their State plans.

The Food and Drug Administration (FDA) is amending the animal drug regulations to reflect approval of supplemental new animal drug applications (NADAs) filed by Fort Dodge Animal Health, Division of Wyeth. The supplemental NADAs provide for revisions to the labeling of two cephapirin sodium products administered by intramammary infusion to lactating cows for the treatment of mastitis.

The Food and Drug Administration (FDA) is issuing this notice to inform companies that the Direct-to-Consumer (DTC) television advertisement user fee program will not commence because the necessary user fees for the program were not ``provided in advance in appropriations Acts'' as required by the Food and Drug Administration Amendments Act of 2007 (FDAAA) and the previously issued notice establishing user fee rates for the program for fiscal year (FY) 2008 is being withdrawn.

The Food and Drug Administration (FDA) is amending the animal drug regulations to reflect approval of a supplemental abbreviated new animal drug application (ANADA) filed by Norbrook Laboratories, Ltd. The supplemental ANADA provides for the veterinary prescription use of flunixin meglumine solution by intravenous injection in lactating dairy cattle for control of pyrexia associated with acute bovine mastitis.

In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, for opportunity for public comment on proposed data collection projects, the National Institute of Child Health and Human Development (NICHD), the National Institutes of Health (NIH), will publish periodic summaries of proposed projects to be submitted to the Office of Management and Budget (OMB) for review and approval. This is a request for renewal of an information collection request that was approved (OMB Clearance 0925-0543) following publication in the Federal Register on January 9, 2004, page 1589 and December 2, 2004, page 70153. Proposed Collection: Title: Longitudinal Investigation of Fertility and the Environment Study. Type of Information Collection Request: Renewal of OMB Clearance 0925-0543. Need and Use of Information Collection: This study will assess the relation between select environmental factors and human fecundity and fertility. This research originally proposed to recruit 960 couples who are interested in becoming pregnant and willing to participate in a longitudinal study. Fewer than expected couples were enrolled during the first three years of the project (n=350), predominantly due to the fact that more couples were ineligible for participation than had been originally estimated. In light of this fact, the revised study plan is to enroll a total of 500 couples (i.e., 150 additional couples), a sample size that will not compromise the main study objectives. Fecundity will be measured by the time required for the couples to achieve pregnancy, while fertility will be measured by the ability of couples to have a live born infant. Couples who are unable to conceive within 12 months of trying or who experience a miscarriage also will be identified and considered to have fecundity-related impairments. The study's primary environmental exposures include: Organochlorine pesticides and polychlorinated biphenyls; metals; fluorinated compounds; phytoestrogens; and phthalates. A growing body of literature suggests these compounds may exert effects on human reproduction and development; however, definitive data are lacking serving as the impetus for this study. Couples will participate in a 20-30 minute baseline interview and be instructed in the use of home fertility monitors and pregnancy kits for counting the time required for pregnancy and detecting pregnancy. Blood and urine samples will be collected at baseline from both partners of the couple for measurement of the environmental exposures. Two semen samples from male partners and two saliva samples from female partners also will be requested. Semen samples will be used to assess male fecundity as measured primarily by sperm concentration and morphology. Saliva samples will be used for the measurement of cortisol levels as a marker of stress among female partners so that the relation between environmental factors, stress and human reproduction can be assessed. The findings will provide valuable information regarding the effect of environmental contaminants on sensitive markers of human reproduction and development, filling critical data gaps. Moreover, these environmental exposures will be analyzed in the context of other lifestyle exposures, consistent with the manner in which human beings are exposed. Frequency of Response: Following the baseline interview, couples will each complete a five-minute daily diary on select lifestyle factors. Women will perform daily fertility testing and pregnancy testing at day of expected menses using a dipstick test in urine. Each test will require approximately five minutes for completion. This testing and diary reporting is required only up to the time women become pregnant, which on average should be in 2-3 months. Men will provide two semen samples, a month apart, requiring approximately 20 minutes for each collection, and women will collect two saliva samples, a month apart, requiring approximately five minutes. Participating couples will be given a choice to submit their information by mail or to send it electronically to the Data Coordinating Center. This option will be available throughout data collection in the event couples change their minds about how they would like to submit information. Bio-specimens will be collected by study participants and research nurses, where appropriate, and forwarded in prepaid delivery packages to the study's laboratories. Affected Public: Individuals from participating communities. Type of Respondents: Men and women aged 18-40 years. Revised Estimated Number of Respondents: 1,000. Revised Estimated Number of Response Sets per Respondent: 6 per women and 3 per men over approximately two years. Average Burden Hours per Response: .1947 for women and .31975 for men. Revised Estimated Total Annual Burden Hours Requested: 1,658 for women and 889 for men. The revised burden estimates represent a 48 percent reduction in the originally requested burden. There is no cost to respondents. There are no Capital Costs to report. There are no Operating or Maintenance Costs to report. Request for Comments: Written comments and/or suggestions from the public and affected agencies are invited on one or more of the following points: (1) The necessity of the proposed collection of information for the proper performance of the function of the agency, including the practical utility of the information; (2) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

The Food and Drug Administration (FDA) is announcing that a collection of information entitled ``Patent Term Restoration, Due Diligence Petitions, Filing, Format, and Content of Petitions'' has been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995.

The Food and Drug Administration (FDA) is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act of 1995 (the PRA), Federal agencies are required to publish notice in the Federal Register concerning each proposed collection of information, including each proposed extension of an existing collection of information, and to allow 60 days for public comment in response to the notice. This notice solicits comments on the procedures by which sponsors of orphan drugs may request eligibility for the incentives by implementing a program as outlined in the Orphan Drug Act and the joint adoption by FDA and the European Medicines Agency (EMEA) of the Common EMEA/FDA Application Form for Orphan Medicinal Product Designation (form FDA 3671).

The Food and Drug Administration (FDA) is announcing a tentative schedule of forthcoming meetings of its public advisory committees for 2008. During 1991, at the request of the Commissioner of Food and Drugs (the Commissioner), the Institute of Medicine (the IOM) conducted a study of the use of FDA's advisory committees. In its final report, one of the IOM's recommendations was for the agency to publish an annual tentative schedule of its meetings in the Federal Register. This publication implements the IOM's recommendation.

This document corrects typographical errors identified in the final rule that appeared in the January 3, 2008 Federal Register (73 FR 404). The final rule delayed until January 1, 2009 the applicability of the anti-markup provisions in Sec. 414.50, as revised at 72 FR 66222, except with respect to the technical component of a purchased diagnostic test and with respect to any anatomic pathology diagnostic testing services furnished in space that is utilized by a physician group practice as a ``centralized building'' (as defined at Sec. 411.351) for purposes of complying with the physician self-referral rules and does not qualify as a ``same building'' under Sec. 411.355(b)(2)(i) of this chapter.

The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.

The Health Resources and Services Administration (HRSA) is seeking comments from the public on its plan to institute a permanent deviation from a policy in the Department of Health and Human Services (HHS), Grants Policy Directive (GPD) 3.01 governing indirect cost recovery for one of its grant programs. The GPD states ``HHS considers activities conducted by grantees that result in indirect charges a necessary and appropriate part of HHS grants, and HHS awarding offices must reimburse their share of these costs.'' Although HRSA typically reimburses grantees for their full share of administrative overhead represented in approved indirect cost rates (which can be up to 50 percent or higher), the Agency believes, in the case of its Small Rural Hospital Improvement Grant Program (SHIP), that full recovery of overhead expenditures would be detrimental to the ability to adequately conduct the activities mandated in the authorizing legislation. The purpose of the SHIP grant program is to assist eligible small rural hospitals in implementing Prospective Payments Systems (PPS), compliance with the Health Insurance Portability and Accountability Act (HIPAA) regulations, and to reduce medical errors and to support quality improvement. Funding for the SHIP grant program is routed first through the State Offices of Rural Health (SORH); they are then distributed evenly by the SORH to the individual hospitals. This process creates efficiencies because of the large number of eligible hospitals and relatively small size of each award. In fiscal year 2007, $14,508,691 was awarded to 1,622 hospitals (approximately $8,945 each) in 46 States. Thus, the SORH is the official grantee of record for the State, as the recipient of the award and fiscal intermediary for the Federal government in distributing the funds. It is in the best interest of the SHIP grant program to limit the total administrative cost recovery to 5 percent of the Federal award, thereby allowing 95 percent of available grant funds to be used to carry out the required program activities. Since the SHIP grant program began in FY 02, through FY 07, the administrative costs have been restricted. Indirect costs were not allowed and there was a five percent maximum of other costs, for administrative costs, within the grant guidance. The SORHs voluntarily decided to limit these cost categories. For FY 07, the average administrative charge was only 3.64 percent. Thus, the cap on administrative costs has worked well. Limiting administrative costs is necessary because 20 percent of SHIP grantees are located in academic settings that have established indirect cost rates in the range of 30 to 50 percent. Without a limitation on the amount of grant funds allocated for administrative costs, the SORH grantee could potentially charge its full indirect cost rate and the grant awards would be significantly less for each small rural hospital. As much as 50 percent of the grant award could be consumed by indirect costs, depending upon the host institution's indirect cost rate. This would significantly reduce the amount of funds available to initiate and maintain the activities of the grant. A limitation on administrative costs will ensure that each hospital, not an unintended source, receives the maximum amount of funding. The limitations placed on these cost categories will ensure that the majority of funding is routed to the small rural hospitals, to be used for the prescribed intents and purposes of the grant program. A continued limitation on administrative costs for future SHIP grant cycles will help to assure that small rural hospitals receive the appropriated support, necessary to carry out the objectives of the grant program. The limitation would be applicable to all grantees of the Small Rural Hospital Improvement Grant Program.