By Scott Cormier, Vice President of Emergency Management, Environment of Care and Safety, Medxcel
We have to be prepared when disaster strikes, and that includes preparing for the inevitable financial impact of the situation. Whether a tree falls on your home’s roof during a storm or a healthcare facility is damaged from a hurricane, we normally have insurance to try to make us whole and repair the damages after the fact.
But insurance alone doesn’t make us whole.
We typically don’t think about an insurance claim until after the event has occurred, and hospitals are no different. The prevailing mindset is to get through the disaster, then figure out filing insurance. Unfortunately, in the weeks following a disaster, healthcare facilities can lose receipts or take the wrong photos of damage or fail to procure help in the right way. The facility could lose thousands or even millions of dollars in potential insurance claims, unless they implement a program that starts the process early in the disaster, or even before the disaster strikes.
There are better ways to prepare your healthcare facility for disaster support and recovery:
In known events, where a severe storm or hurricane has been forecast and flooding is inevitable due to heavy rainfall, healthcare facilities need to have a plan of tracking the administrative documents they will need for filing insurance. Teams need to be trained for the important work of documenting pre-disaster conditions as well as preparation costs, damages and supplies purchased post-disaster to recover from the damages.
For unknown events, such as tornadoes, explosions or flash flooding, tracking expenses early in the process will ensure you are submitting every cost associated with the disaster. Here are a few tips to help track your costs:
- Create a disaster payroll code so all associates working on a disaster pay schedule can be tracked.
- Create a disaster key word for all expenses related to equipment and supplies purchased specifically in response to or recovering from the disaster.
- Track all travel expenses for team members that travel in support of the disaster.
- Take pictures, if possible, before the disaster of facility areas prone to damage or flooding from the event (review your hazard vulnerability analysis, flood emergency plans, and sewage emergency plans for vulnerabilities).
- Ensure contractors are keeping records for all costs, including receipts/tickets for debris removal.
- Educate your teams annually on the process and documentation required.
- Record the time of your expense project manager (if you use one).
FEMA Public Assistance Program
The Federal Emergency Management Agency, or FEMA, will help state, local, tribal and territorial governments, as well as certain private nonprofit organizations, respond to and recover from major disasters or emergencies. Any costs that private, not-for-profit healthcare systems incur following a disaster that are not covered by insurance can be provided by FEMA’s Public Assistance Program. Following disasters such as hurricanes, tornados, earthquakes or wildfires, FEMA will reimburse 75-100% of systems’ costs for services such as debris removal, overtime pay to workers, procurement of special equipment like chainsaws or generators, and repair to damaged equipment or infrastructure.
If your facility has kept proper documentation as noted above, you will be more successful in receiving FEMA’s full assistance, just as if you were filing insurance claims. If you experience enough disasters, you may consider having a full-time project manager to track, coordinate and file disaster expenses.
FEMA Hazard Mitigation Assistance Grants
For facilities that know they are at risk for damage from disasters, FEMA’s Hazard Mitigation Assistance Grants can provide funding for eligible mitigation measures to reduce disaster losses. When a facility can reduce or eliminate long-term risks to people and property from future disasters, they can also break the cycle of disaster damage, reconstruction and repeated damage. This is a long-term solution to benefit not just your physical facility, but your community as well. Similar to the Public Assistance Program, FEMA will pay 75% of the expenses to mitigate disasters.
For example, FEMA has provided $84 million to a hospital in Florida to mitigate the effects of hurricanes through flood walls and upgrading windows and roofs. Not only does this investment ensure the facility is available during a disaster, but it will also protect the facility’s infrastructure which can in turn help with insurance costs. By reducing risk, you can also reduce the cost of your policy.
Too many hospitals are missing out on this funding. Some hospitals don’t know the program exists (though, now you do!). Others think it’s too complicated to go through all the paperwork and apply, so they don’t pursue it. This is a missed opportunity. Facilities should already have receipts and photos and documents from their administrative preparation. Relaying these documents to a grant application (which can be outsourced) is not much more work than you already need to do to fully benefit from insurance policies.
Where do we start?
FEMA’s website has information on the Public Assistance Program and the Hazard Mitigation Assistance Grants to help you get started. FEMA works hand-in-hand with each state’s emergency management agency, so you should also work alongside state agencies as you pursue funding. Your local (county or city) emergency management agencies may also be able to assist in securing funding, so continue to build and cultivate your relationships with local agencies to both prepare for and mitigate disasters.
As climate change intensifies disasters across the country, it is imperative that healthcare facilities be prepared for the worst. Hospitals are vital in times of emergency, and every effort facilities can take to be ready for disasters, bounce back faster and avoid damage in the first place will help prepare the greater community to deal with emergencies.
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About the Author
Scott Cormier is the Vice President of Emergency Management, Environment of Care (EOC) and Safety at Medxcel, specializing in facilities management, safety, environment of care, and emergency management and provides healthcare service support products and drives in-house capabilities, saving and efficiencies for healthcare organizations that, in turn, improve the overall healing environment for patients and staff. Cormier leads the development and implementation of emergency management, general safety and accident-prevention programs for the national network of hospitals that Medxcel serves.