Hospitals damaged by hurricanes or other disasters are leaving millions of dollars on the table by not realizing all of the reimbursement available to them from the Federal Emergency Management Agency (FEMA), according to Ryan Yokley, a vice president with Advis, a legal-based healthcare consulting firm.
Last year, Yokley worked with a client that owns and operates hospitals throughout the Gulf Coast. One or more of the hospitals in the system suffered damage from four recent hurricanes: Rita in 2005, Harvey in 2017, Gustav in 2008 and Ike in 2018. Three of these, Rita, Ike and Harvey, are among the 10 costliest hurricanes on record. Hurricane Harvey is right behind Katrina as the costliest. At No. 2, it racked up $34.8 billion in damages, according to USA Today.
Yokley was able to get his Gulf Coast client several million dollars from the FEMA public assistance program reimbursement for disaster-related expenses.
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"There is a lack of awareness from hospitals that this money is available," Yokley said.
Most people know that FEMA reimburses state and local governments. It also reimburses certain types of private nonprofit organizations for the cost of disaster-related debris removal, emergency protective measures to protect life and property, and permanent repair work to damaged or destroyed infrastructure, according to FEMA.
This covers expenses incurred leading up to a disaster, such as sandbagging and boarding up windows, and for repair and replacement.
The FEMA money does not fund items covered by insurance, but it may cover the deductible.
Two key factors: The FEMA money is available only after other sources of funds have been exhausted; and there is a short window for hospitals to apply. It must be within 30 days of a federal disaster declaration.
The hard part becomes identifying the expenses and documenting them within this 30-day window, said Yokley, who assists with the FEMA claims.
WHY THIS MATTERS
After a hurricane, hospital executives and staff are doing all they can to remain open and to treat the influx of incoming patients. There is no time to search for the receipts for the wood used to board up the windows or to document the overtime needed to get the job done.
Hospitals need to take the time needed to prepare for a disaster, said Yokley, who recommends five key preparations:
- Be familiar with the type of expenses eligible for reimbursement.
- Know the insurance policy deductible.
- Hospitals already have a disaster policy in place, but it needs to be reviewed based on the FEMA criteria. For example, what is the policy on emergency protective measures completed by staff, and is this at an overtime or special rate?
- Establish record-keeping procedures for disaster-related expenses in a separate cost center. This will assist with reimbursement.
- Establish a preapproved vendor list in accordance with FEMA requirements.
September is the peak of hurricane season, with an average season having 12 named storms and six hurricanes, according to the National Oceanic and Atmospheric Administration.
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