Public Assistance for Healthcare Nonprofits Responding to COVID-19 Pandemic

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On March 13, 2020, President Trump issued a formal Declaration of a National Emergency as of March 1, 2020, based on the pandemic of COVID-19. In this Declaration, the president states that “[t]he spread of COVID-19 within our Nation’s communities threatens to strain our Nation’s healthcare systems. . . . It is incumbent on hospitals and medical facilities throughout the country to assess their preparedness posture and be prepared to surge capacity and capability.”

Also on March 13, the Federal Emergency Management Agency (FEMA) issued a fact sheet stating that the president’s National Emergency Declaration would allow certain nonprofits to apply for public assistance under section 502 of the Stafford Act. FEMA stated:

In accordance with section 502 of the Stafford Act, 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. FEMA will not duplicate assistance provided by the Department of Health and Human Services (HHS), including the Centers for Disease Control and Prevention, or other federal agencies. This includes necessary emergency protective measures for activities taken in response to the COVID-19 incident. FEMA assistance will be provided at the 75 percent Federal cost share.

What Does This Mean for Healthcare Entities That Are Mobilizing to Respond to the Pandemic?

Nonprofit healthcare entities (those that are qualified under §501(c), (d), or (e) of the Internal Revenue Code or state equivalents) may be eligible for reimbursement of 75% of costs incurred starting March 1, 2020, for “emergency protective measures” taken to respond to the pandemic “at the direction or guidance of public health officials.” Emergency protective measures must be undertaken to “eliminate or lessen immediate threats to lives, public health, or safety” and include the following items of medical care:

  • Triage and medically necessary tests and diagnosis.
  • Treatment, stabilization, and monitoring.
  • Durable medical equipment.
  • Consumable medical supplies.
  • Temporary facilities, such as tents or portable buildings for the treatment of those affected.
  • Leased or purchased equipment for use in temporary medical care facilities.
  • Security for temporary medical care facilities.

FEMA will not provide Public Assistance funding for:

  • Long-term medical care.
  • Any costs covered by private insurance, Medicare, Medicaid or a pre-existing private payment agreement.
  • Costs covered by any other federal agency.
  • Medical care costs incurred once a survivor is admitted to a medical facility on an inpatient basis.
  • Administrative costs associated with the treatment of patients.

Nonprofit healthcare entities that are interested in pursuing such funding from FEMA must file a Request for Public Assistance within 30 days of the president’s Declaration of a National Emergency (by April 12, 2020). Under FEMA regulations, each state is required to develop plans for the administration of the Public Assistance program, which include conducting briefings about the application progress and assisting FEMA in determining applicant eligibility. Nonprofits seeking public assistance from FEMA also will be required to carefully document their expenses, including their necessity and reasonableness and that they are not eligible for reimbursement under other private or public funding sources.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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