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COVID-19 is the first major federal disaster declaration for a medical event causing a public health emergency. As such, this marks the first time emergency protective measures are eligible for reimbursement through the Federal Emergency Management Agency (FEMA) Public Assistance Program. $45 billion is available from FEMA for eligible applicants and is exclusive to emergency and major disaster declarations for the COVID-19 pandemic. 

Eligible emergency protective measures taken to respond to the COVID-19 emergency at the direction or guidance of public health officials may be reimbursed under the program. On March 19, 2020, FEMA released the COVID-19 Emergency Protective Measures Fact Sheet, which outlines the types of emergency protective measures that may be eligible under the program in accordance with the COVID-19 Emergency Declaration.

Healthcare finance leaders must develop a plan for capturing COVID-19 related costs as they seek financial aid - such systems will facilitate eligible organizations in applying for FEMA aid through the program. The following reiterates general guidance in tracking COVID-19 expenses, and also addresses FEMA-specific information.

General guidance
  • Set up new general ledger accounts, by department, to track COVID-19 expenditures
  • Establish project/activity codes for COVID-19 activities, e.g., treatment of patients including testing and triage, emergency operations and coordination, tracking hours by employee and by date with time entries describing work performed
  • Document agencies which the organization will utilize for contracted labor to provide additional coverage for employees unable to work due to COVID-19 related issues (such as employee or family member illness, lack of child care, etc.)
  • Comply with all federal, state and local procurement requirements, and ensure appropriate contracts are in place
  • Ensure invoices received for eligible expenses include all supporting documentation to clearly articulate that the cost was incurred for purposes of addressing and responding to the public health emergency
  • Establish systems to track supplies used in COVID-19 related activities
  • Establish systems to track equipment purchases used for COVID-19 related activities; for previously owned equipment, establish system to track usage for COVID-19 activities
  • Establish methodology to track infrastructure related enhancements due to responding to COVID-19 pandemic
FEMA specific guidance

Funding process: Summary of the key steps within the FEMA COVID-19 delivery model process

1.      Information provided to potential applicants by state, local, tribal and/or territorial government entities

2.      Applicant creates account at Public Assistance grants portal

3.      Applicant submits Request for Public Assistance (RPA)

4.      Applicant submits COVID-19 Project Worksheet and documentation

5.      FEMA and state (recipient) review documents

6.      Sign final grant

7.      Receive funding

Eligibility: FEMA has specified four tiers of eligibility, all of which must be met in order to qualify as an eligible applicant and corresponding eligible expense. The four tiers of eligibility are as follows:

  • Eligible applicants
  • Eligible facilities
  • Eligible work
  • Eligible costs

Eligible applicants include:

  • State Agencies
  • Local Governments
  • Federally Recognized Native American nations
  • Certain Types of Private Nonprofit Organizations

Eligible facilities must be legally responsible for the cost, and include:

  • Any publically or private nonprofit organization owned building, works, system, or equipment
  • For municipalities, costs may be services provided to public in response to COVID-19
  • Private nonprofit organizations must operate an eligible facility (e.g., hospital, clinic); each facility requesting public assistance must meet all eligibility requirements

Eligible work includes emergency protective measures related to COVID-19. Some additional information about this work is as follows:

  • Must be direct result of declared emergency
  • Legal responsibility of eligible Applicant
  • Completed within regulatory time limits

Eligible costs include:

  • Labor
  • Equipment/Materials
  • Contracts
  • Management Costs (administrative costs) – capped at max of 5% of Applicant total obligated project costs
  • Eligible costs must be 1) necessary and reasonable, 2) compliant with Federal, State and Local procurement requirements, and 3) reduced by any applicable credits (e.g., insurance, other funding sources).
  • In March, FEMA published eligible emergency protective measures (refer to above link); this is not an exhaustive list. FEMA is working on providing more specificity as to what costs and activities are feasible and necessary in this unique situation.
  • FEMA has historically compensated for costs that are incurred due to the disaster. FEMA reimburses for incremental costs as they relate to the emergency, not what would have been expended regardless of the emergency.
  • Ensure that distinct cost centers track what is payable or reimbursable according to FEMA guidance and define what will be included in each.
  • Do not overlook smaller expenditures which are incremental costs related to responding to the COVID-19 pandemic, such as meals for clinicians providing care in isolation units; although all these expenses might not be eligible for reimbursement, it is still important to cast a broad net to ensure you are not missing potentially eligible expenses.
  • Note that payments from Health and Human Services (HHS) can be used to pay for direct expenses as well as lost revenues but FEMA does not pay for lost revenues (documented lost revenues should be submitted to other provider relief funding sources).
  • The federal cost share is 75% with local cost share of 25%, which can be covered through in-kind donations that meet certain criteria.
  • FEMA is the payer of last resort, and costs compensated from other programs cannot be submitted to FEMA (i.e., cannot “double-dip”).

Each state has a designated state administrative agency (SAA) that works with FEMA. Baker Tilly recommends that you contact your local state agency to make contact as a potential applicant, register with the SAA and provide the required eligibility documentation.

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