In June of 2020, Husch Blackwell alerted non-profit healthcare organizations and higher education institutions of the availability of FEMA Public Assistance (PA) Program disaster relief funds pursuant to then published FEMA Guidance. We have been assisting clients with navigation of their FEMA fund requests, and due to newly published Guidance, we recommend that such organizations closely evaluate potential claims depending upon when the expenses arise to understand which guidance applies.
FEMA recently released an interim policy to clarify eligible work under the PA program in response to the COVID-19 pandemic. This policy applies to work performed on or after September 15, 2020 while the earlier policy applies to expenses incurred before this date. Notably, this policy supersedes prior guidance discussed in earlier blogs including Covid-19 Medical Care Costs Eligible for FEMA Public Assistance, FEMA Funds Available for Higher Education Institutions, and Covid-19 FEMA Funds for Nonprofit Healthcare and Higher Education Institutions. Generally, the guidance seeks to limit reimbursable costs to those necessary to deal with Covid-19 treatment and prevents reimbursement for costs related to fighting community spread.
Only work associated with the performance of emergency protective measures specifically listed in the policy are eligible for Public Assistance. Eligible emergency work is defined below:
- Medical care, in accordance with COVID-19 specific policy or subsequent updates.
- Purchase and distribution of food, in accordance with COVID-19 specific policy or subsequent updates.
- Non-congregate medical sheltering, in accordance with COVID-19 specific policy or subsequent updates.
- Operation of Emergency Operations Centers to direct and coordinate resources and response activities for COVID-19 declarations.
- Communications to disseminate public information regarding health and safety measures and provide warnings about risks and hazards.
- Mass casualty management, including storage of human remains and mass mortuary services, as necessary to manage fatalities caused by COVID-19.
- Purchase and distribution of Personal Protective Equipment (PPE) that is directly related to the performance of otherwise eligible emergency work, or is provided to healthcare workers, patients with confirmed or suspected COVID-19 infection, and first responders.
- Funding for stockpiling a supply of eligible PPE is limited to a supply that is projected for up to 60 days from date of purchase.
- Funding for storing eligible PPE is limited to what is necessary to store a projected 60-day PPE supply.
Additionally, the following are eligible for funding only when necessary to perform the above eligible emergency work.
- Purchase and distribution of face masks, including cloth facial coverings, provided to persons conducting eligible emergency work and/or in facilities where eligible emergency work is performed.
- Temperature scanning, including purchase and distribution of hand-held temperature measuring devices and associated supplies, in facilities where eligible emergency work is performed.
- Disinfection, in accordance with CDC guidance, in facilities where eligible emergency work is performed, including purchase and provision of necessary supplies and equipment, and in excess of current operating costs.
- Acquisition and installation of temporary physical barriers, such as plexiglass barriers, in facilities where eligible emergency work is conducted.
- Law enforcement and security.
- Training and technical assistance specific to the declared event.
- Reimbursement for force account overtime costs, costs related to hiring temporary employees, and contract labor costs associated with performance of eligible emergency protective measures.
- Movement of equipment and supplies, including transportation and storage.
- Other work and costs delineated within FEMA’s COVID-19 policies.
Private Non Profit (“PNP”) Education Organizations
The new guidance is frankly an unfortunate development for PNP educational organizations. Under the prior guidance, PNP educational organizations had strong claims for the reimbursement of facility disinfection, PPE and the construction of temporary physical barriers to enforce social distancing generally. Under the new guidance, such activities are only reimbursable if they are connected with other eligible work, namely Medicare. The one significant cost that still remains eligible are costs related to Covid-19 communications. These costs include electronic communications as well as the supplies and materials to produce flyers or install permanent signs.
Due to the significant restrictions placed on the expenses commonly incurred by PNP education organizations, we recommend PNP educational organizations carefully track the timing of their expenses as expenses incurred before September 15, 2020 are still subject to the earlier policy.
PNP Healthcare Organizations
While a blow to PNP education organizations, this new guidance is a win for PNP healthcare organizations. Although it does not expand reimbursable expenses for PNP healthcare organizations, the focus in the Guidance on medical care and healthcare workers illustrates a clear shift in FEMA policy to favor such entities.
Due to this new guidance, we strongly recommend PNP healthcare organizations to continue to be strategic about how they apply funds by understanding the items that each funding source covers. For example, the CARES Act Provider Relief Funds may cover health care related expenses or lost revenues attributable to COVID-19. There is some overlap between items covered by Provider Relief Funds and FEMA PA funds, but there are also items only covered by one or the other. For instance, “lost revenues” for Provider Relief Funds include revenue losses associated with fewer outpatient visits, canceled elective procedures or services, and increased uncompensated care. Moreover, FEMA PA funds can be applied towards triage, testing, and medical treatment, including prescription costs, for uninsured confirmed and suspected cases. As such, there is overlap on certain uncompensated care costs covered by both programs, but each program covers other items that the other does not cover, which highlights the importance of intentional allocation.