A federal appeals court on Monday upheld a lower-court order blocking the National Institutes of Health from imposing a 15% cap on indirect-cost reimbursement for research grants. The First Circuit concluded the NIH violated statutes and its own procedures when it tried to set a blanket overhead rate, preserving the negotiated reimbursement system many research universities rely on. The decisions cite Supreme Court precedent and a line of litigation that forced courts to consider whether agency-wide funding policies belong in district court. Judges on the panel pointed to prior rulings distinguishing challenges to agency policy from disputes over withheld contract funds. Universities, the Association of American Medical Colleges and other plaintiffs argued the cap would cripple research infrastructure—labs, IT, compliance and patient-safety systems—at large medical centers. The appeals court’s action keeps billions in indirect‑cost support on the table while litigation proceeds. Institutions and research leaders now face a short-term reprieve but remain attentive to potential appeals and future agency rulemaking that could try to achieve similar savings through other mechanisms.