FEMA’s Duplication of Benefits Review: Key Considerations for Providers
Background on FEMA’s Duplication of Benefits Review Process and Implications for Providers and COVID-19 PA Recipients Across the Country
Health care providers in New York have recently become the targets/subjects of Federal Emergency Management Agency (FEMA) Duplication of Benefits (DOB) reviews related to COVID-19 Public Assistance (PA) reimbursements. In some instances, these DOB reviews have resulted in FEMA denying hospital systems previously obligated funds, and, in others, FEMA has requested hospital systems repay funds previously distributed. This alert summarizes the high-level issues FEMA PA recipients, including health care organizations, states, local governments and private nonprofit organizations, should be aware of and outlines immediate steps providers should take upon receiving a DOB memorandum.
The FEMA Public Assistance Program was activated on March 13, 2020, in response to the COVID-19 Public Health Emergency (PHE) and following nationwide emergency and major disaster declarations under the Stafford Act. The PA program provided federal funding to states, as well as local, tribal and territorial governments, and certain eligible private nonprofit organizations such as hospitals and health systems, to reimburse expenses for emergency protective measures undertaken in response to the PHE. Assistance focused primarily on Category B emergency protective measures, including actions necessary to save lives, protect public health and ensure safe operation of essential facilities.
Eligible costs for reimbursement include purchase and distribution of personal protective equipment (PPE), testing, cleaning and disinfection, screening and related operational measures. FEMA coordinated extensively with the Department of Health and Human Services, the Centers for Disease Control and Prevention and other federal partners to avoid duplication of benefits, emphasizing that funding could not duplicate support received from other federal programs.
Under federal law, FEMA is prohibited from funding costs already reimbursed through another source. During the COVID-19 emergency, hospitals and health systems received support from multiple federal programs including Provider Relief Funds, Paycheck Protection Program loans and other state or federal initiatives, as well as patient revenue. FEMA is now reviewing PA claims to ensure there was no “double counting” of reimbursed expenses.
A DOB memorandum and accompanying documentation typically outlines:
- Identification of the specific projects under review and the associated FEMA-approved costs
- Findings identifying potential duplication
- Repayment amounts FEMA believes are owed
- Deadlines for providing documentation and filing an appeal
Steps for Providers and Organizations that Received FEMA PA Funding for COVID-19
Organizations receiving a DOB memorandum should consider the following actions:
- Carefully review the memorandum
- Engage with the appropriate state intermediary for any assistance they can provide
- Assemble complete documentation, including project applications and backup
- Consult internal or external experts
- Confirm deadlines for filing an appeal with FEMA and/or state intermediary
Why Providers and PA Recipients Across the Country Should Prepare Now
The experience of New York-based health care providers that have received DOB memos indicates that New York’s situation is likely a preview of what other states may face. FEMA’s review strategy is evolving, and any organizations that received COVID-19-related FEMA PA funding may find themselves subject to similar scrutiny in the near future.
How Manatt Can Help
Manatt’s multidisciplinary team has the capabilities, connections and experience to guide clients through a wide range of issues related to FEMA policies and regulations. Our bi-coastal team is made up of both legal and consulting professionals. For more information on how your organization can prepare, please contact , , and . Our team is actively engaged with health care providers in responding to FEMA Duplication of Benefits reviews, assisting clients with:
- Understanding FEMA’s DOB review process
- Communicating with FEMA and state intermediary
- Assessing exposure and preparing documentation
- Developing appeal strategies
- Navigating the DOB appeals process
- Next steps, including potential arbitration before Civilian Board of Contract Appeals (CBCA) if appeal is denied
Please reach out to Manatt to discuss assistance with FEMA’s DOB appeal process.
