GAO Decision Faults HHS for Illegally Letting More Than $78 Million in Health Care Quality Research Funds Expire

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AHRQ is a small agency, but its work reaches ordinary hospital care. It funds research on preventing medication errors, infections, and diagnostic mistakes; runs the Medical Expenditure Panel Survey, which tracks what Americans spend on health care; and supports the U.S. Preventive Services Task Force, which issues recommendations on screenings and other preventive care.

Congress gave AHRQ a $369 million lump-sum appropriation for fiscal 2025. According to GAO, the agency obligated about $290 million of it, including $75 million for 185 grants. More than $78 million was still unobligated when the money expired on Sept. 30, 2025.

GAO linked the shortfall to an HHS reduction in force that removed much of AHRQ’s grant staff. After HHS announced the layoffs in spring 2025, AHRQ slowed its grantmaking and dropped peer review sessions that had been scheduled for May and June. Its grant obligations fell to zero in May 2025, compared with about $20 million in May 2024. Obligations stopped again in July and did not resume until Sept. 10, 2025, about three weeks before the funds expired.

GAO found that HHS withheld the funds “without submitting a special message to Congress.” When Congress provides money as a lump sum, GAO wrote, an agency has broad discretion over how to spend it but “does not have the discretion to withhold funds from obligation or expenditure altogether.”

In an April 24, 2026, letter to GAO, HHS argued that most of the unused balance resulted from a court order and that any slowdown was a permissible programmatic delay. On Sept. 29, 2025, a federal court in Maryland ordered AHRQ to set aside $70 million while litigation continued. GAO responded that the order could excuse withholding only after that date and that the staff cuts were an elective decision, not an unavoidable delay.

HHS and AHRQ did not respond to Inside Higher Ed’s requests for comment on the decision.

Under the Impoundment Control Act, the executive branch may withhold money Congress has appropriated only after sending Congress a special message proposing a deferral or rescission. GAO said HHS sent no such message. A GAO spokesperson told Inside Higher Ed that if an agency does not release improperly withheld funds, the comptroller general may file a civil lawsuit to compel their use. GAO did not rule on separate claims under the Administrative Procedure Act, which researchers are pursuing in federal court in Maryland in Society of General Internal Medicine v. Kennedy.

The decision is not GAO’s first finding against HHS under the law. In 2025, GAO also found that HHS violated the act in withholding Head Start funds and National Institutes of Health grant funds.

Sen. Patty Murray of Washington, the top Democrat on the Senate Appropriations Committee, said in a statement responding to the GAO decision that AHRQ’s work is “research that has saved tens of thousands of lives and saved billions of dollars in health care costs.” Aaron Carroll, president and CEO of AcademyHealth, a health services research organization, framed the issue more narrowly. “This is ultimately about whether appropriated funds are used the way that Congress directed,” he told Inside Higher Ed about the ruling.

The problems did not end with fiscal 2025. AJMC reported on the AHRQ grant freeze in July that AHRQ staff had fallen from about 300 in early 2025 to 74, and that a July 15 letter halted at least 104 grants, many focused on patient safety. Congress appropriated $345 million for AHRQ in fiscal 2026. Grant Witness, which tracks federal grant data, estimates that AHRQ spent $41.3 million on grants that year, according to Inside Higher Ed. HHS has said AHRQ is “strengthening its grants process.”

The U.S. Preventive Services Task Force, whose recommendations help determine which preventive services many insurers must cover without cost sharing, had not met since March 2025 and was down to six of its 16 members as of July. In September, AHRQ named eight new members to the task force, restoring it to 16, though the panel has not held a formal meeting since 2025.

Hospitals use AHRQ-funded tools to reduce falls, infections, and medication errors. When that research stalls, safer practices can take longer to reach patients. AHRQ’s existing public guides on preventing medical errors and preparing questions for medical appointments remain available.

What did GAO decide? GAO concluded that HHS violated the Impoundment Control Act by withholding more than $78 million in fiscal 2025 AHRQ funds, which expired unspent on Sept. 30, 2025.

What is AHRQ? AHRQ is the federal agency that funds research on health care quality and patient safety, runs the Medical Expenditure Panel Survey, and supports the U.S. Preventive Services Task Force.

How did HHS respond? HHS told GAO that most of the unused balance stemmed from a court order and that any slowdown was a routine programmatic delay. GAO rejected both arguments.

Does this affect patients directly? Not immediately, but fewer studies on infections, medication errors, and diagnostic mistakes can slow improvements in hospital safety.

Can the money be recovered? The fiscal 2025 funds have expired. A GAO spokesperson said the comptroller general may file a civil lawsuit when an agency does not release improperly withheld funds.

What happens next? Congress will set AHRQ’s fiscal 2027 funding, and a related lawsuit continues in federal court in Maryland.