COVID-19: Health Care Districts, Nonprofits and FEMA Emergency Assistance
What Costs May or May Not Be Eligible for Funding
Government agencies, including special and health care districts, as well as some nonprofits, are eligible for Federal Emergency Management Agency assistance under President Trump’s COVID-19 pandemic emergency declaration. Last week’s emergency order under the Stafford Act allows FEMA to provide funding in response to the COVID-19 outbreak.
What types of entities are eligible for assistance?
State and local government entities eligible for assistance include counties, municipalities, cities, towns, local public authorities, school districts and special districts (which include health care districts). Eligible nonprofit entities include nonprofit hospitals, clinics, outpatient services, hospices, nursing homes, rehabilitation centers that provide medical care, and facilities for the aged and disabled. In addition, nonprofit entities that own or operate buildings, structures, equipment or systems used to provide emergency services, such as ambulances, are eligible for assistance.
Assistance to eligible entities will require execution of an agreement between the Governor, acting for the State, and FEMA. The agreement will set the period of time for which assistance will be made available, the type and extent of the federal assistance to be made available, and the commitment of the State with respect to the amount of funds to be expended in alleviating damage and suffering caused by the emergency.
What costs might be eligible for assistance?
At this time, FEMA has not published guidance on which costs are, and are not, eligible for assistance, other than stating that “eligible emergency protective measures taken to respond to the COVID-19 emergency at the direction or guidance of public health officials may be reimbursed under Category B of the agency’s Public Assistance program.” However, in 2018, FEMA published guidance on which costs are, and are not, eligible for assistance when “the emergency medical delivery system within a declared area is destroyed, severely compromised or overwhelmed.” Such guidance states that eligible medical care includes, but is not limited to:
- Triage and medically necessary tests and diagnosis
- Treatment, stabilization and monitoring
- First-aid assessment and provision of first aid
- A one-time 30-day supply of prescriptions for acute conditions or to replace maintenance prescriptions
- Vaccinations for survivors and emergency workers to prevent outbreaks of infectious and communicable diseases
- Durable medical equipment
- Consumable medical supplies
- Temporary facilities, such as tents or portable buildings for treatment of survivors
- Leased or purchased equipment for use in temporary medical care facilities
- Security for temporary medical care facilities
- Use of ambulances for distributing immunizations and setting up mobile medical units
What costs might not be eligible for assistance?
FEMA’s 2018 guidance states that ineligible costs include:
- Medical care costs incurred once a survivor is admitted to a medical facility on an inpatient basis
- Costs associated with follow-on treatment of survivors beyond 30 days of the declaration
- Administrative costs associated with the treatment of survivors
- Costs underwritten by private insurance, Medicare, Medicaid or a pre-existing private payment agreement
What about lost revenues?
The social distancing and shelter-in-place measures ordered to slow COVID-19 transmission will substantially reduce economic activity and will result in substantial losses in fee and tax revenue. Many health care facilities eligible for assistance are already experiencing substantial losses in patient care revenue due to social distancing guidelines and the cancellation of elective medical procedures, and health care districts that own medical office buildings are in danger of losing rental income needed to support the health needs of their communities. However, FEMA’s Public Assistance Program generally does not fund increased operating expenses or lost revenue from reduced fees or taxes generated from economic activity.
How should an eligible entity prepare and document for cost recovery?
Eligible entities should frequently consult with their local and state authorities regarding their needs and coordinate response efforts and resources. The entity’s County Office of Emergency Services is the primary local coordination agency for emergencies and disasters affecting government operations in the county and should be able to share critical and up-to-date information regarding the federal response and available resources and programs.
In addition, eligible entities should document all work performed and costs incurred (including volunteer assistance) in connection with the outbreak to demonstrate that its claimed costs were actually incurred and are reasonable. Documentation of all associated costs (e.g., labor, equipment, supplies or materials), including copies of all receipts and time logs, will be required to support claims to FEMA for additional assistance.
If you have any questions about these requirements or how COVID-19 impacts your agency, please contact the author of this Legal Alert listed at the right in the firm’s Health Care practice group or your BB&K attorney.
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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.
