COVID-19 FEMA Funds For Nonprofit Healthcare & Higher Education: Track Your Costs Carefully And Choose Your Funding Source Wisely

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Patient health insurance claim form in doctor or nurse hands for medicare coverage and medical treatment from illness, accident injury and admitted in hospital ward

By Tom Shorter, David Human, Karin Jacoby and David Human, Jr.

On March 13, 2020 the COVID-19 pandemic was declared a National Emergency by President Trump. This declaration set in motion the availability of FEMA Public Assistance (PA) disaster relief funds to support nonprofit healthcare and higher education organizations, among others, during the recovery. On March 27, 2020, additional FEMA PA disaster relief funds of approximately $45 billion were appropriated through the CARES Act to address the public health emergency. Further, many of the longstanding FEMA policies and procedures are being loosened to streamline and expedite funding for nonprofit healthcare organizations such as hospitals and hospice, as well as certain higher education institutions.

It is important to note that costs and expenses a provider allocates as covered by Provider Relief Funds or other government funds cannot be reimbursed by FEMA PA funds. Hence, the decision regarding allocation of the different federal funds to eligible entity COVID-19 costs and expenses is an important one. Careful advance planning is strongly recommended to ensure maximum appropriate reimbursement from all available federal funds, including FEMA PA funds.

Set forth below are the eligibility requirements, as well as the costs and expenses eligible for reimbursement, and the immediate steps can be taken to strategically prepare for receiving FEMA PA relief funds.

Eligible Organizations

Private, for-profit healthcare and higher education organizations are not eligible for assistance from FEMA PA relief funds.  However, private nonprofit (“PNP”) organizations are eligible and must satisfy two requirements:

  1. A PNP applicant must show that it has:
    • A ruling letter from the Internal Revenue Service granting tax exemption under sections 501(c), (d), or (e) of the Internal Revenue Code of 1954; or
    • Documentation from the state substantiating that the non-revenue producing organization or entity is a nonprofit entity or doing business under state law.
  2. A PNP must own or operate a facility that provides emergency, medical or custodial care services.

Additionally, covered state, local, tribal or territorial entities are eligible for FEMA PA, including those that own and/or operate medical care or education facilities.

Eligible Assistance

FEMA may provide PA funds for costs and expenses for emergency protective measures including, but not limited to, the following:

1. Management, control and reduction of immediate threats to public health and safety:

  • Emergency Operation Center costs;
  • Training specific to the declaration of the COVID-19 event;
  • Disinfection of eligible public facilities;
  • Technical assistance to state, tribal, territorial or local government on emergency management and control of immediate threats to public health and safety; and
  • Overtime labor expenses.

2. Emergency medical care activities under the COVID-19 declarations include:

  • Triage and medically necessary tests and diagnosis related to COVID-10 cases;
  • Emergency medical treatment of COVID-19 patients;
  • Prescription costs related to COVID-19 treatment;
  • Use or lease of specialized medical equipment necessary to respond to COVID-19 cases;
  • Purchase of PPE, durable medical equipment, and consumable medical supplies necessary to respond to COVID-19 cases;
  • Medical waste disposal related to eligible emergency medical care;
  • Emergency medical transport;
  • Temporary medical facilities and expanded medical care facility capacity for COVID-19 for facilities overwhelmed by COVID-19 cases and/or quarantine patients infected or potentially infected by COVID-19; and
  • Temporary facilities and expansions may be used to treat COVID-19 patients or non-COVID-19 patients, as appropriate.

3. Medical Sheltering related to patient surges:

  • Sheltering must follow HHS/CDC guidelines for social distancing;
  • Non-congregate medical sheltering may be eligible, subject to prior approval by FEMA, for example:

– COVID-19 patients that do not need hospitalization, but do need isolation;
– Patients exposed to COVID-19 who do not need hospitalization; and
– Asymptomatic high-risk individuals needing social distancing as a precautionary measure, such as people over 65 or with certain underlying health conditions.

4. Other Eligible Costs

  • Purchase and distribution of food, water, ice, medicine, and other consumable goods;
  • Household pet sheltering and containment actions;
  • Security and law enforcement;
  • Communications of general health and safety information to the public;
  • Public and health and safety communications;
  • Search and rescue to locate and recover members of the population requiring assistance; and
  • Reimbursement for state, tribe, territory and/or local government force account for responding to COVID-19.

Additional information about eligible emergency protective measures can be found in the recently updated Coronavirus (COVID-19) Pandemic: Eligible Emergency Protective Measures Fact Sheet, March 19, 2020.

Take Immediate Steps To Prepare For FEMA PA Relief Funds

Historically, FEMA required PA fund requests to be submitted within 30 days of the disaster declaration. FEMA recognized this was an unrealistic timeframe given the ongoing nature of the COVID-19 public health emergency and consequently, extended the deadline for COVID-19 Requests for Public Assistance (RPA) to 30 days after the end of the declared disaster period.

Although the final deadline for an RPA has not yet been established, healthcare and higher education organizations should nonetheless immediately begin to implement processes to secure a successful cost recovery:

1. Create an account through the PA Grants Portal to initiate your organizations RPA and subsequent COVID-19 Streamlined Project Application. Recovery grant programs typically have extended timelines, often upwards of 18 -24 months, so creating this portal, sooner rather than later, is an important initial step.

2. Develop and implement an organized process for recording and saving all documentation, invoices and proof of payments of costs. All reimbursable expenses require detailed documentation. Be prepared to answer the five W questions (who, what, when, where, and why). Nonprofit healthcare and higher education organizations are well experienced in working with federal programs which require documentation to receive reimbursement, FEMA PA relief funds are no different.

3. Develop and implement a written procurement policy that complies with FEMA standards. Please be aware that any purchases in excess of $250,000 require competitive bidding unless a procurement policy is put in place that allows for procurement under exigent circumstances.

4. FEMA PA will be provided at a 75 percent federal cost share for approved costs and expenses in addition to any percentage reimbursed by States.

5. Prioritize which funds to submit for reimbursement to the FEMA PA relief program. FEMA does not allow for duplicative reimbursement with other federal funding options. Therefore, it is important to apply for all FEMA PA funds, listed in the Eligible Assistance section, prior to allocating costs and expenses to other federal funding programs. Specifically:

  • FEMA provides funding assistance under PA only if it is not covered by another funding source.
  • FEMA provides funding assistance only when it is not provided by HHS, including the CDC or other federal agencies.
  • FEMA provides PA funding for emergency medical care costs if it is not covered by another source, including private insurance, Medicare, Medicaid, or a pre-existing private payment agreement.

6. FEMA PA awards an additional 5% of an applicant’s total PA Award for legal guidance to navigate through the FEMA PA process. If your organization happens to be one of the many which has not had experience working with FEMA, consider contacting Husch Blackwell to discuss how our team of FEMA experienced attorneys can assist your organization through this process.

Work With FEMA Successfully

Most nonprofit healthcare and higher education organizations have little experience working with FEMA. When communicating with FEMA it is imperative to offer clear and concise explanations of the day-to-day organizational operations to be successful in securing funding

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