Force Account Labor & Equipment Costs, Immediate Threat

Appeal Brief

Appeal Letter

Appeal Analysis

Background

The coronavirus (COVID-19) pandemic resulted in a major disaster declaration for the state of Georgia on March 29, 2020, with an incident period from January 20, 2020, to May 11, 2023.[1] Emory Healthcare, Inc. (Applicant), a Private Nonprofit (PNP) organization that operates a primary medical care facility, requested $114,138.00 in Public Assistance (PA) reimbursement for force account labor (FAL) critical premium pay and hazard pay (premium/hazard pay) incurred from March 1, 2020, through June 30, 2022. The Applicant stated it implemented premium/hazard pay for full-time employees from certain departments to guarantee that they could operate efficiently and effectively to deliver critical medical care to patients, thereby addressing the challenges posed by the pandemic. To support its claim, the Applicant provided a FAL summary, which included employee names with their job title, pay code, and associated hourly pay rates, along with its Premium Pay for Critical Staffing Policy with an effective date of March 12, 2020 (pay policy). FEMA prepared Grants Manager Project 697070 to document the Applicant’s claim.

On August 1, 2023, FEMA issued a Determination Memorandum denying the project. FEMA found that the Applicant’s premium and hazard pay was not eligible because the relevant pay policy was not in effect at the time of the disaster.

First Appeal

In a letter dated September 29, 2023, the Applicant submitted a first appeal and requested reimbursement of $114,138.00 in FAL premium/hazard pay costs. The Applicant claimed that its pay policy constituted a predisaster written labor policy because it was in effect before the President issued a disaster declaration for this event. The Applicant separately referenced a FEMA memorandum dated December 19, 2022, and stated that the memorandum permitted reimbursement based upon retroactive agreements that were legally sufficient and binding in nature. The Applicant provided its revised pay policy with a retroactive date of January 19, 2020 (revised pay policy), and asserted the revised policy provided a sufficient basis for project eligibility. In a letter dated November 22, 2023, the Georgia Emergency Management and Homeland Security Agency (Recipient) transmitted the first appeal to FEMA.

In a letter dated June 17, 2024, the FEMA Region 4 Regional Administrator denied the Applicant’s first appeal. FEMA found that the Applicant’s pay policy, which went into effect 52 days after the beginning of the incident period, did not constitute a predisaster written labor policy.[2] 

Second Appeal

In a letter dated August 1, 2024, the Applicant submits a second appeal, reiterating its first appeal arguments, and asserting that its reliance on the March 12, 2020 pay policy to meet FEMA’s predisaster labor requirement is consistent with previous second appeal decisions and a ruling from the Civilian Board of Contract Appeals.[3] The Applicant further contends it has provided documentation to support the eligibility of the claimed work. The Applicant’s documentation includes a spreadsheet with nearly 500 entries that contain information relating to the: (1) paid employees; (2) day upon which each the employee completed the work; (3) total premium/hazard hours paid; (4) hourly rate paid; and (5) category of pay (along with the accompanying pay code name). With its second appeal, the Applicant provides additional documentation referred to as payment advice files, which demonstrate that the employees received payments categorized using terminology such as “Support Staff Premium” or “Critical Staffing Premium.”[4] In a letter dated September 5, 2024, the Recipient transmitted the appeal to FEMA.

Discussion

FEMA is authorized to provide assistance for emergency protective measures to save lives and protect public health and safety.[5] For emergency protective measures to be eligible, the applicant is responsible for showing the work is required due to an immediate threat resulting from the declared incident.[6] In response to COVID-19, eligible emergency protective measures may include emergency and inpatient clinical care for patients with confirmed and suspected cases of COVID-19.[7] Certain labor costs associated with medical staff providing treatment to COVID-19 patients may be eligible.^[8] FEMA determines the eligibility of overtime, premium pay, and compensatory time costs based on the applicant’s predisaster written labor policy, provided the policy: (1) does not include a contingency clause that payment is subject to Federal funding; (2) is applied uniformly regardless of a Presidential declaration; and (3) has set non-discretionary criteria for when the Applicant activates various pay types.^[9] To be eligible, costs must be directly tied to the performance of eligible work and adequately documented.^[10] It is the applicant’s responsibility to provide documentation to substantiate its claim as eligible and to clearly explain how those records support its appeal.^[11] 

Here, the Applicant requests reimbursement of its premium/hazard pay and claims its pay policy constitutes a predisaster labor policy as required for eligibility under the PA program and asserts that its pay policy meets the “predisaster” requirement because it was issued prior to both the disaster declaration and the COVID-19 nationwide emergency declaration. However, FEMA has defined a predisaster labor policy to mean a policy that was in effect prior to the start of the incident period.[12] The incident period for this disaster began on January 20, 2020 and the Applicant’s pay policy was issued on March 12, 2020. Therefore, as the Applicant’s pay policy was not in effect prior to the start of the incident period, it does not constitute a predisaster written labor policy.[13] 

Additionally, the Applicant states that its revised pay policy may be retroactively applicable based on a December 19, 2022 FEMA memorandum, which addresses legal responsibility for emergency work between PNPs and state, local, tribal, or territorial governments and authorizes the limited use of retroactive mutual-aid agreements or contracts for eligible emergency work.[14] However, the Applicant’s revised pay policy is not a mutual-aid agreement or contract between the Applicant and other entities. Therefore, FEMA’s memorandum pertaining to retroactive agreements is not applicable to the Applicant’s revised pay policy.  

Finally, notwithstanding the above, the Applicant did not demonstrate that the claimed FAL premium/hazard pay costs are directly tied to the performance of eligible work. Although the Applicant submits a FAL spreadsheet with numerous line items and employee/pay data, the spreadsheet does not demonstrate that the hours claimed for the employees are associated with eligible work, such as emergency and inpatient clinical care for patients with confirmed and suspected cases of COVID-19. For example, the Applicant’s FAL spreadsheet identifies employees with their job title, such as Patient Care Assistant or Nurse Clinician II, but provides no information regarding the nature of the patient care. Likewise, the documentation referred to by the Applicant as payment advice files identifies the department where employees work, such as “441300-EHI Enterprise Staffing Pool” but does not provide information as to what specifically the personnel were doing in that department, nor does it tie those employees to specifically eligible activities such as providing treatment to COVID-19 patients. Therefore, the documentation does not substantiate that the claimed costs are directly tied to the performance of eligible emergency work in response to COVID-19.[15]     

Conclusion

FEMA finds the Applicant has not demonstrated its FAL premium/hazard pay costs are associated with a predisaster written labor policy or directly tied to the performance of eligible work. Therefore, this appeal is denied.