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Second Appeal Brief
PA ID# 005-UOFZF-00; Columbus Regional Hospital
PW ID# 56 PWs; Insurance
Citation: FEMA-1766-DR-IN, Columbus Regional Hospital, Multiple Project Worksheets
Reference: Duplication of Benefits
Summary: FEMA prepared 56 PWs for categories B and E projects for the hospital after the June 2008 flood. FEMA reduced the value of the PWs by $15,913,493 to reflect anticipated insurance. FEMA met with Columbus Regional Hospital (Applicant) on April 6, 2009 and explained that 36 percent (36%) of the $25 million insurance recovery ($9 million) would be attributable to the Applicant’s business income loss due to the flood. The remaining 64 percent (64%) or $16 million would be applied to FEMA eligible damages.
The Applicant submitted its first appeal on June 30, 2009, requesting that FEMA reconsider the insurance deductions taken from the PWs. It is the Applicant’s contention that the Stafford Act allowed it to apply the $25 million insurance recovery exclusively to its unreimbursed business income losses. The Acting Regional Administrator denied the first appeal on November 5, 2009, stating that the anticipated insurance proceeds were apportioned based on the ratio of eligible to ineligible damage as specified in Disaster Assistance Fact Sheet DAP9580.3, Insurance Considerations for Applicants. That same ratio was used to determine the amount of anticipated insurance proceeds cost and to be deducted from the 56 PWs for the eligible equipment replacement.
On December 30, 2009, the Applicant submitted its second appeal, reiterating its claim that the insurance proceeds should be applied entirely to its business interruption losses, therefore negating any potential duplication of benefits. The Applicant did not provide any additional documentation to support its claim with the second appeal. The State supports the Applicant’s appeal.
Issues: 1. Does Section 312 of the Stafford Act require FEMA to prevent duplication of benefits and reduce eligible assistance by the amount of anticipated insurance proceeds?
2. Does the Applicant have insurance coverage for the equipment in question?
Findings: 1. Yes.
Rationale: Stafford Act Section 312. Duplication of Benefits; 44 CFR §206.250(c); Disaster Assistance Directorate Fact Sheet DAP9580.3, Insurance Considerations for Applicants