A coalition of universities, medical centers and other research institutions have pitched proposals on new funding models for how the federal government covers indirect costs that support research projects.
Five notes:
1. The proposals were developed by the Joint Associations Group — a coalition of 10 national organizations, including the Association of American Medical Colleges — and presented during a June 12 webinar.
The effort represents a proactive step by research institutions to collaborate with federal officials and shape the future of indirect cost reimbursement. It aims to head off a proposed 15% cap on overhead reimbursements, which the National Institutes of Health introduced in February and institutions have warned would significantly undercut research capacity.
2. The group devised two potential reimbursement models for indirect costs. Under the first model, payments for overhead costs — which include lab space, utilities and administrative support — would vary based on the type of institution and the type of research a grant is covering, with different types of institutions and research each having assigned adjustment factors.
For example, if a hospital has a proposed adjustment factor of 35% and the type of research is a clinical trial with a 7% factor, the total overhead reimbursement would be calculated at 42% of the total grant budget. These percentages are illustrative only. The coalition said figures for a formal proposal will be shaped by feedback from the broader research community as institutions test the model and submit input.
3. The second model would require research support costs to be specified as line items in every grant proposal. Instead of relying on a negotiated indirect rate, this model breaks out support functions — such as grants management, regulatory compliance and facilities — as distinct cost categories. A small fixed percentage would still be applied to cover administrative costs that cannot be directly attributed to a specific project.
4. While the proposals are distinct, they “both create an audible and transparent process for covering essential research costs,” the coalition said. They differ markedly from the current facilities and administrative cost reimbursement model, in which reimbursements for overhead costs are based on rates research institutions have negotiated with the federal government.
The group is currently soliciting input on the proposed models from the broader research community to help inform a single, finalized proposal, which it plans to formally submit to federal lawmakers by the end of the month.
5. Medical schools, teaching hospitals and other research institutions have warned that the NIH’s plan to impose a 15% cap on reimbursements for indirect research costs would significantly limit research activity nationwide, reducing access to clinical trials and stall scientific progress on medical breakthroughs. A federal judge has issued a permanent injunction to block the cap, which the Trump administration plans to appeal.
