Rural Health Grant Compliance Requirements

The FORHP Compliance Framework

FORHP grantees operate within a multi-layered compliance framework. At the foundation is 2 CFR 200 (Uniform Guidance), which governs all federal grant recipients. On top of that are HRSA-wide standard terms and conditions that apply to all HRSA awards. And above those are program-specific conditions unique to each FORHP program. Understanding all three layers is essential for maintaining compliance throughout your project period.

Non-compliance with any layer can result in consequences ranging from corrective action plans to funding suspension or termination. HRSA takes a progressive approach to compliance issues, typically offering opportunities to remediate before taking adverse action, but persistent or severe non-compliance can result in immediate funding consequences.

Rural Designation Maintenance

Your rural designation is not a one-time determination. Census data updates, OMB designation changes, and RUCA code revisions can affect whether your service area continues to qualify as rural. While FORHP generally does not revoke funding mid-award due to designation changes, maintaining awareness of your rural status is important for continuation applications and new funding opportunities.

What Can Change Your Rural Status

• Decennial Census updates: New census data every 10 years can reclassify census tracts and counties, potentially moving your area from nonmetro to metro designation
• OMB CBSA revisions: OMB periodically revises metropolitan statistical area boundaries, which can absorb previously nonmetropolitan counties
• RUCA code updates: RUCA codes are recalculated when new census and commuting data become available, potentially reclassifying census tracts
• Population growth: Rapid growth in your service area can push population thresholds past the rural cutoff

Best practice: Re-verify your rural designation using the HRSA Rural Health Grants Eligibility Analyzer annually, particularly when census or OMB updates are released. Document the results for your compliance files and continuation applications.

Network Agreement and Consortium Governance

For consortium-based FORHP grants, the network agreement is a living compliance document, not a filing cabinet artifact. HRSA expects active network governance throughout the project period, and your compliance documentation should reflect ongoing consortium activity.

Required Governance Elements

• Signed network agreement: Must define roles and responsibilities of each member, decision-making authority, financial arrangements (including sub-awards), data sharing protocols, and conflict resolution procedures
• Regular governance meetings: Documented consortium meetings with agendas, attendance records, and minutes. Most FORHP programs expect at least quarterly consortium governance meetings.
• Member contribution tracking: Documentation that each consortium member is fulfilling their committed role and providing the resources (financial, in-kind, staff time) described in the application
• Member changes: If a consortium member withdraws or is replaced, you must notify your HRSA Project Officer and update the network agreement. Significant changes in consortium composition may require a scope change request.

Sub-Award Compliance

When FORHP grant funds flow to consortium members through sub-awards, the lead applicant is responsible for sub-recipient monitoring per 2 CFR 200.332. This includes:

• Executing formal sub-award agreements with all required federal provisions
• Assessing sub-recipient risk at the time of the sub-award and periodically thereafter
• Reviewing sub-recipient financial reports and progress reports on a regular schedule
• Ensuring sub-recipients comply with all applicable federal requirements including the Single Audit threshold
• Verifying sub-recipients have active SAM.gov registrations and are not debarred or suspended

Service Area Documentation

FORHP grantees must maintain accurate documentation of their service area throughout the grant period. This includes the geographic boundaries (counties, census tracts, or ZIP codes) that define where services are delivered, the population served within that area, and documentation that the service area meets the applicable rural definition.

If your project serves multiple communities across a service area, track activity by location to demonstrate that grant-funded services are actually reaching the rural populations described in your application. Service delivery concentrated in a single non-rural community within a nominally rural service area will raise compliance concerns.

Telehealth Compliance Requirements

Telehealth grants and any FORHP project using telehealth modalities face additional compliance requirements that go beyond standard grant conditions. These requirements address the intersection of federal grant compliance, state health care licensing, and technology regulations.

Licensing and Credentialing

• State licensure: Providers delivering telehealth services must be licensed in the state where the patient is located at the time of service, not just the state where the provider is located. This is the most common telehealth compliance violation in multi-state network grants.
• Credentialing by proxy: CMS allows a hospital or CAH receiving telehealth services to use the credentialing decision of the distant-site hospital, but specific conditions must be met and documented
• Interstate compacts: Some states participate in interstate medical, nursing, or psychology licensure compacts that facilitate multi-state telehealth. Know which compacts apply in your service area.

HIPAA and Technology Compliance

• Telehealth platform requirements: All telehealth technology must comply with HIPAA Security Rule requirements for electronic protected health information (ePHI). This includes encryption in transit and at rest, access controls, and audit logging.
• Business Associate Agreements: BAAs must be in place with any third-party telehealth technology vendor before patient data flows through their systems
• Informed consent: Patients must provide informed consent for telehealth services, with documentation maintained in the medical record. State laws may impose specific consent requirements beyond federal minimums.
• Technology backup: Document your contingency plan for technology failures during patient encounters. How will you complete the clinical encounter if the connection drops?

CAH Conditions of Participation

Critical Access Hospitals receiving FORHP funding (particularly SHIP or Flex Program funds) must maintain compliance with the CAH Conditions of Participation (CoPs) established by CMS at 42 CFR 485 Subpart F. Loss of CAH CoP compliance affects not only the hospital's Medicare certification but can also impact FORHP grant standing.

Key CoP Areas for FORHP Compliance

Quality Improvement Requirements

FORHP grantees are expected to implement quality improvement processes that use performance data to improve service delivery and health outcomes. This is not a passive expectation — your performance reports will be evaluated for evidence that you are using data to drive improvement, not just collecting it to satisfy reporting requirements.

• Performance measure tracking: Maintain ongoing data collection for all required performance measures, not just at reporting time. Quarterly review of performance data against targets allows mid-course correction.
• Quality improvement documentation: Document what you found in your data analysis, what changes you made in response, and whether those changes improved performance. HRSA expects a Plan-Do-Study-Act (PDSA) or similar improvement methodology.
• Consortium-level QI: For network grants, quality improvement should occur at both the individual member level and the network level, with data sharing and collaborative improvement activities.

HRSA Site Visit Preparation

HRSA conducts site visits to FORHP grantees to verify compliance and assess program implementation. Site visits may be scheduled (typically with 30+ days notice) or, in rare cases, triggered by compliance concerns. While not every grantee receives a site visit during each project period, you should be prepared at all times.

What HRSA Reviewers Examine

• Programmatic compliance: Are you implementing the activities described in your approved work plan? Are you meeting performance targets? Are services reaching the target population and geographic area described in your application?
• Financial compliance: Are grant funds being spent in accordance with the approved budget? Is there adequate documentation for all expenditures? Are time and effort reports maintained? Are sub-recipients being properly monitored?
• Consortium function: Is the consortium actively meeting and collaborating, or is it a paper partnership? Are consortium members fulfilling their committed roles? Is the governance structure functioning as described?
• Data systems: Can you demonstrate your data collection methodology? Can you reproduce the numbers reported in your performance reports? Are data systems secure and compliant?

Site Visit Preparation Checklist

• Current Notice of Award (NoA) and all special terms and conditions readily accessible
• Approved work plan with documentation of progress on each milestone
• Consortium agreement, meeting minutes, and attendance records
• Financial records: general ledger, expenditure detail by budget category, time and effort documentation
• Sub-award agreements and sub-recipient monitoring documentation
• Performance data source documentation showing how reported numbers were calculated
• Quality improvement documentation: data analysis, improvement plans, and results
• Rural designation verification (current HRSA Eligibility Analyzer output)
• Key personnel resumes and documentation of required qualifications

Maintain these documents in a centralized, organized compliance file throughout the grant period. Scrambling to assemble documentation when a site visit is announced is a sign that your ongoing compliance processes need strengthening. See our Reporting guide for details on the specific performance reports HRSA expects.

Scope Changes and Prior Approval

FORHP grants are awarded based on a specific scope of work. Changes to that scope during the project period require HRSA prior approval. Common changes that require prior approval include:

• Change in project scope, aims, or methods from the approved application
• Change in key personnel (Project Director, principal investigator)
• Budget transfers exceeding 25% between approved budget categories
• Addition of new consortium members or withdrawal of existing members
• Changes in the approved service area
• No-cost extension requests

Submit prior approval requests through HRSA EHBs with adequate lead time. Your HRSA Project Officer is your primary point of contact for questions about whether a specific change requires prior approval.