Time Extension-Appeal, Support Documentation, Duplication of Benefits, Private Nonprofit

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	FEMA-4085
Applicant	Chevra Hatzalah
Appeal Type	Second
PA ID#	047-UC9JE-00
PW ID#	2651 and 2654
Date Signed	2017-03-15T00:00:00

Conclusion:  The Applicant failed to timely file its second appeal and thus its appeal rights lapsed.  Even if the appeal was timely, the Applicant did not document that 1) ambulance operation costs resulted directly from the disaster and 2) it pursued recovery of available insurance.

Summary Paragraph

During an incident period from October 27 to November 8, 2012, Hurricane Sandy impacted New York City.  The Applicant, which is a Private Nonprofit ambulance service, operates within the metropolitan area.  FEMA prepared PW 2651 to document the Applicant’s ambulance operation costs, but determined the Applicant failed to establish those costs were a direct result of the disaster and did not award funding.  FEMA also prepared PW 2654, which documented costs for damaged ambulances, medical supplies, and electronics.  FEMA awarded funding but insurance proceeds, both received and anticipated, were deducted from the overall award.  Through two separate first appeal letters dated September 30, 2016, the Applicant appealed FEMA’s determinations, requesting reimbursement of costs documented on PW 2651 and the anticipated insurance proceeds not funded through PW 2654.  The Applicant asserted ambulance operation costs were previously determined eligible by FEMA personnel, and it never received anticipated insurance proceeds, asserting its insurance carrier had paid the “maximum allowable” under the policy.  FEMA’s Region II Regional Administrator denied the appeals through two separate letters dated December 4 and 8, 2015, finding the Applicant did not document that the ambulance operation costs were for eligible work and that it pursued the maximum insurance recovery.  The Applicant received the decisions on December 21, 2015 and filed a second appeal for both PWs, in an April 1, 2016 letter, reasserting its first appeal requests and arguments.

Authorities and Second appeals

• Stafford Act §§ 312, 403, and 423.
• 44 C.F.R. §§ 204.62(a), 206.201(a),(b), (c)(1),  206.206, 206.223(a)(1), 206.250. 
• PA Guide, at 54.
• DAFS, DAP9580.104, Public Assistance for Ambulance Services, at 1.
• DAP9525.3 Duplication of Benefits, at 2.
• DAFS, DAP9580.3, Insurance Considerations for Applicants, at 2.
• Public Health Trust of Miami-Dade, FEMA-3259-EM-FL, at 2.
• Broward County School Board, FEMA-1609-DR-FL, at 2.

Headnotes

• Stafford Act § 423, as implemented by 44 C.F.R. § 206.206(c)(1), allows an applicant 60 days to file an appeal upon receipt of notice of an appealable action.
  • The Applicant received notice of FEMA’s decision denying its first appeals on December 21, 2015.  It filed its second appeal on April 1, 2016—100 days after it received notice and 40 days past the 60 day deadline.  Thus, the appeal was not timely filed.
• Pursuant to Stafford Act § 312 and 44 C.F.R. § 206.250, FEMA must reduce the amount of assistance provided to an applicant by the amount of financial assistance the Applicant will receive from insurance.
  • The Applicant failed to provide documentation establishing it pursued the maximum insurance recovery available.  As such, FEMA cannot verify that the losses were not covered by insurance.         

 

Appeal Letter

Appeal Analysis

Background

During an incident period from October 27 to November 8, 2012, Hurricane Sandy impacted New York City.  Chevra Hatzalah (Applicant), a Private Nonprofit ambulance service provider, operates within the metropolitan area. 

Project Worksheet (PW) 2651

Emergency service providers in the New York City metropolitan area were deployed to perform emergency evacuations as part of a mutual aid agreement with the Regional Emergency Medical Services Council of New York City, Inc. (REMSCO).  The Applicant was not activated by REMSCO but responded to an increased number of emergency response medical calls because other service providers were performing evacuation work.  The Applicant requested Public Assistance (PA) funding for ambulance operation costs it claimed were associated with the use of its ambulances during Hurricane Sandy.  These costs included increased gas and maintenance.  In response to the Applicant’s request, FEMA prepared PW 2651 and estimated ambulance operation costs of $37,960.00.1]

FEMA subsequently determined these costs were not eligible for funding, and notified the New York State Division of Homeland Security and Emergency Services (Grantee) through an August 6, 2013 e-mail.[2]  FEMA found the Applicant’s documentation insufficient to demonstrate the work performed was a direct result of the disaster.  Specifically, FEMA noted that the Applicant had not provided call logs detailing activities it performed and for which it sought reimbursement.  As such, FEMA concluded the $37,960.00 in estimated costs to be ineligible increased operating expenses.

PW 2654

In addition, the Applicant requested PA funding for costs associated with three flood-damaged ambulances, units B-03, SG-1, and RL-704.  FEMA prepared PW 2654, which documented costs to 1) replace units B-03 and RL-704, 2) repair unit SG-1, and 3) replace medical supplies and electronics located in units B-03 and RL-704.[3]  Costs documented on the PW totaled $438,037.94.  FEMA deducted $284,695.90 for actual insurance proceeds received and $73,256.48 for anticipated insurance proceeds the Applicant’s insurance policy would later reimburse.  Eligible funding totaled $80,085.56.

With regard to unit RL-704, FEMA determined the Applicant’s insurance policy would cover the replacement costs up to the insured value.  FEMA reimbursed the difference between unit RL-704’s estimated replacement cost of $162,375.50 and its $150,000.00 insured value, a difference of $12,375.50.[4]  The PW documents $87,273.00[5] in actual insurance proceeds and $62,727.00 in anticipated insurance proceeds, which together total $150,000.00.[6]  The PW noted unit RL-704 was damaged beyond repair.

Regarding the damaged medical supplies, FEMA determined the Applicant’s insurance policy covered 100 percent of the replacement value for medical supplies and did not award funding, reducing the overall award by $70,962.73.[7]  The PW noted that the Applicant had received $60,433.25 in insurance proceeds for damaged medical supplies,[8] and was entitled to additional insurance proceeds totaling $10,529.48[9] to meet the total value of damaged medical supplies.

First Appeals

PW 2651

Through a September 30, 2013 letter to the Grantee, the Applicant filed its first appeal and requested reimbursement of the $37,960.00 in ambulance operation costs estimated on PW 2651.  The Applicant argued that FEMA “team crews” indicated “vehicle usage time” and “gas” costs were eligible.[10]  The Grantee forwarded the appeal to the Region II Regional Administrator (RA) through a November 14, 2013 transmittal letter.  The Grantee did not support the Applicant’s appeal and attached a memorandum to its transmittal letter explaining its position.  The Grantee asserted the requested costs were ineligible increased operating expenses, noting the Applicant had not provided call logs detailing activities. 

On April 29, 2015, FEMA sent a Final Request for Information (Final RFI) for documentation describing in detail the underlying nature of the emergency response medical calls and the type of assistance provided.  The Applicant responded in a July 17, 2015 letter and asserted that it previously supplied detailed call log information, which FEMA subsequently lost, and that FEMA representatives previously told the Applicant the costs were eligible.[11]

On December 4, 2015, the RA denied the first appeal.[12]  In the response, the RA explained that the Applicant did not document that the costs resulted from work directly related to the disaster, and without such represented ineligible increased operating costs.  The Applicant received the notification on December 21, 2015.[13]

PW 2654

In a separate letter, also dated September 30, 2013, the Applicant filed a first appeal related to PW 2654, requesting the $73,256.48 in anticipated insurance proceeds subtracted from the award.  The Applicant asserted that its insurance carrier had paid the maximum allowable amount under the policy and requested FEMA reimburse the entire replacement cost of the damaged medical supplies and ambulances.[14]  The Applicant requested FEMA reimburse the costs deducted from the overall award as anticipated insurance proceeds.

The Grantee forwarded the appeal to the RA on January 16, 2014 and included a memorandum supporting the Applicant’s claim for unit RL-704.  In its memorandum, the Grantee noted that although the Applicant’s insurance carrier deemed unit RL-704 to be repairable it was unusable due to salt contamination.  The Grantee requested FEMA reimburse $62,727.00, representing the anticipated insurance proceeds for unit RL-704.  In support of its position, the Grantee 1) offered a letter from an auto supply company, which suggested unit RL-704 was damaged beyond repair due to saltwater damage,[15] 2) asserted unit RL-704 was in fact replaced, and 3) stated that no additional insurance proceeds were forthcoming. 

The Grantee did not support the Applicant’s claim for the medical supplies in the amount of $10,529.48.  The Grantee explained its position by noting that the Applicant’s insurance policy is a replacement value policy covering medical supplies and the insurance carrier held back additional funding pending the actual replacement of the medical supplies.

FEMA sent a Final RFI dated April 29, 2015, requesting documentation demonstrating the Applicant made reasonable efforts to maximize its recovery for the medical supplies and contested its insurance carrier’s determination that unit RL-704 was repairable.  FEMA also requested any documentation that would establish insurance coverage was not available for the Applicant’s losses.  The Applicant’s July 17, 2015 RFI response argued that it attempted to maximize its recovery from its insurance carrier, but did not include additional documentation to support this position.

The RA denied the appeal on December 8, 2015.[16]  The RA determined the Applicant failed to demonstrate that it had 1) disputed the insurance carrier’s settlement amount for unit RL-704, and 2) pursued additional insurance funding for the medical supplies.[17]  The Applicant received notification of the denial on December 21, 2015.[18]

Second Appeal

In a letter dated April 1, 2016, the Applicant submitted a consolidated second appeal for PWs 2651 and 2654 and requested a total of $111,216.48 in additional funding.[19]  With respect to the operation costs estimated in PW 2651, the Applicant argues FEMA representatives orally approved the claim and it had provided all the documentation required to substantiate it.  Regarding the damages documented in PW 2654, the Applicant contends: 1) the insurance paperwork provided to FEMA demonstrates that the insurance policy did not fully cover its loss and 2) it contested the insurance coverage with its insurance provider.  The Grantee separately forwarded the two appeals on April 11, 2016 but did not provide any argument in support of the appeal.

Discussion

Timeliness

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) § 423, as implemented by Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.206, allows an eligible applicant to appeal any PA eligibility determination within 60 days of receiving notice of the appealable action.[20]  Neither the Stafford Act nor 44 C.F.R. § 206.206 provide FEMA with the authority to grant time extensions for filing appeals.[21] 

In this instance, the RA sent the Applicant notice of the first appeal decisions through separate letters dated December 4, 2015 and December 8, 2015.  The Applicant received both decisions on December 21, 2015.[22]  In each first appeal response, the RA explicitly advised the Applicant that it could file a second appeal in accordance with the requirements and procedures set forth in 44 C.F.R. § 206.206 within 60 days from the date of receipt of the letter.  The Applicant filed its second appeal through a letter dated April 1, 2016—100 days after receipt of the letters on December 21, 2015.  Accordingly, the second appeal was not filed within the statutory or regulatory timeframes. 

Documented Justification

When an applicant files an appeal of a PA determination, 44 C.F.R. § 206.206(a) requires the applicant to provide documented justification supporting its position.  That subsection also requires the applicant to specify the provisions in federal law, regulation, or policy with which the applicant believes the action was inconsistent.[23]

The Applicant’s first appeals for PWs 2651 and 2654 consisted of two separate one page letters. Both appeals lacked documentation supporting the Applicant’s positions.  Neither appeal specified the provisions in federal law, regulation, or policy with which the Applicant believed FEMA’s actions were inconsistent.[24]  Although FEMA subsequently sent two Final RFIs, requesting documentation specific to each of Applicant’s appeals, the Applicant did not provide the required documentation.[25]  As such, the Applicant did not provide documented justification to support its appeal.

Work Eligibility

Stafford Act § 403 authorizes Federal agencies, including FEMA, to provide assistance essential to meet immediate threats to life and property resulting from a major disaster, including work that “reduce[s] immediate threats to life, property, and public health and safety.”[26]  Emergency work is defined as work which must be done immediately to save lives and to protect improved property and public health and safety, or to avert or lessen the threat of a major disaster.[27]  Moreover, such work must “[b]e required as the result of the emergency or major disaster event.”[28]  While FEMA policy on ambulance services includes a non-exhaustive list of eligible services, such as evacuation and rescue operations, the services must still result from an immediate threat caused directly by the disaster.[29] 

Regarding PW 2651, the Applicant did not demonstrate how the individual emergency response calls resulted directly from the disaster or were for evacuation or rescue operations resulting from the disaster.  Examples of such documentation might have included call logs or dispatch records describing underlying reasons for individual calls.[30]  Without such, FEMA is precluded from awarding the $37,960.00 of requested funding.

While the Applicant correctly asserts that FEMA representatives calculated the duration of calls and documented the distance ambulances would travel to respond to calls, these were estimates to establish a cost value but do not supplant the Applicant’s obligation to document actual costs tied to work caused by the disaster.  Accordingly, these estimates are not sufficient to establish that emergency calls resulted directly from the disaster. 

Duplication of Benefits

The Stafford Act § 312(a) states that no entity will receive assistance for any loss for which financial assistance has already been received from any other program, insurance, or other source to address the same purpose.[31]  Both regulation and policy prohibit disaster assistance for damages covered by insurance.[32]  Accordingly, an applicant, before receiving a PA award, must first seek out and maximize the potential benefits from applicable insurance policies.[33]  The amount of any grant will be reduced by amounts available for the same purpose.[34]

To support the Applicant’s first appeal regarding PW 2654, the Grantee provided a letter from an auto supply company—wherein it was concluded that the cost to repair unit RL-704 would exceed its value because the unit was contaminated by saltwater.[35]  However, this letter does not demonstrate that the Applicant pursued a higher settlement for the total insured value of unit RL-704.  It merely represents the opinion of the letter’s author.  As for the damaged medical supplies, the Applicant did not demonstrate it pursued reimbursement for full replacement costs or that there was no coverage available for full replacement value.  Supporting documentation might have included correspondence demonstrating coverage was not available for the loss or that the Applicant pursued supplemental claims for the medical supplies or a higher settlement by disputing its insurance company’s determination that RL-704 was repairable. 

Without such documentation, the Applicant has not demonstrated it maximized the potential benefits from available insurance.  As FEMA cannot verify insurance coverage was not available, the requested costs of $73,256.43 are not eligible for PA.

Conclusion

The Applicant failed to timely file its second appeal.  Regardless, even if the appeal was timely, the Applicant did not document that ambulance operation costs resulted directly from the disaster, nor that it pursued the maximum insurance recovery available.  Accordingly, this appeal is denied.

 

 

[1] FEMA averaged the number of calls taken in 2009, 2010, and 2011, calculating an average of 4,433.  This figure was subtracted from 6,769, the number of calls responded to in 2012, to reach a “call increase” figure of 2,336.  Based on a sampling of drive distances, FEMA also determined an average travel time of 31 minutes per call.  Multiplying 31 (FEMA used “.5” in the calculation to represent 31 minutes (i.e. one half hour)) minutes by 2,336 (the “call increase”) totaled 1,168 hours, which was multiplied by $32.50 (FEMA cost code 8041, Ambulance up to 210 horsepower, allocates $32.50 per hour) to calculate $37,960.00 in ambulance operation costs.  Project Worksheet 2651, Chevra Hatzalah, Version 0, at 3 (July 23, 2013).

[2] Email from Pub. Assistance Group Supervisor, FEMA, to Representative, N.Y. State Dept. of Homeland Sec. & Emergency Servs. (Aug. 6, 2013, 11:18 EST).

[3] The damaged medical supplies and electronics were located inside damaged ambulances. 

[4] FEMA determined the Applicant’s insurance reimbursed $120,000.00 the insured value of ambulance unit B-03.  As such, FEMA reimbursed $34,535.00 the difference between the $120,000.00 insured value and a $154,535.00 replacement cost.  Accordingly, actual insurance proceeds of $120,000.00 were subtracted from the overall award.

[5] This figure corresponds to an estimated repair cost.

[6] Both of these figures are part of the larger reduction of $284,695.90 for actual insurance proceeds and $73,256.48 for anticipated insurance proceeds, respectively.  The PW notes the total replacement cost for unit RL-704 was $240,520.50 (a replacement cost of $162,375.50, damaged electronics for $26,125.00, and medical supplies for $52,020.00). 

[7] $52,020.00 for unit RL-704 and $18,942.73 for unit B-03.

[8] $43,471.25 for unit RL-704 and $16,962.00 for unit B-03.

[9] $8,548.75 for unit RL-704 and $1,980.73 for unit B-03.

[10] Letter from Executive Administration, Chevra Hatzalah, to Disaster Assistance Officer, N.Y. State Pub. Assistance (Sept. 30, 2013).

[11] Letter from Administrator, Chevra Hatzalah, to FEMA, Pub. Assistance, at 1 (July 17, 2015) [hereinafter Final RFI Response].  This letter is titled second appeal response but responded to both the Final RFI for PW 2651 and PW 2654.

[12] The RA sent the December 4, 2015 denial letter to both the Applicant and Grantee.

[13] FEMA confirmed a December 21, 2015 delivery to the Applicant by using UPS tracking number 1Z4015W71290118191.

[14] Letter from Executive Administration, Chevra Hatzalah, to Disaster Assistance Officer, N.Y. State Pub. Assistance (Sept. 30, 2013).

[15] Letter from Principal, See Neville Auto Supply Inc., to Chevra Hatzalah, (Dec. 3, 2013) [hereinafter Neville Auto Supply Letter].

[16] The RA sent the December 8, 2015 denial letter to both the Applicant and Grantee.

[17] The RA, through the first appeal decision, also reduced the award by $12,375.50.  The RA determined that unit RL-704 was repairable and eligible damage was fully covered by insurance.  As such, he determined the $12,375.50 was not eligible because it was awarded with the understanding the vehicle was a total loss. 

[18] FEMA confirmed a December 21, 2015 delivery to the Applicant by using UPS tracking number 1Z4015W71290118191.

[19] $37,960.00 for PW 2651 and $73,256.48 for PW 2654.  Although not stated directly, the language of the Applicant’s appeal implies the Applicant also is appealing the RA’s reduction of the award by $12,375.50.

[20] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 423(a), 42 U.S.C. § 5189a (2007); Title 44 Code of Federal Regulations (44 C.F.R.) § 206.206(c)(1) (2012).

[21] FEMA Second Appeal Analysis, Public Health Trust of Miami-Dade, FEMA-3259-EM-FL, at 2

(Mar. 27, 2015); FEMA Second Appeal Analysis, Broward County School Board of Florida, FEMA-1609-DR-FL, at 2 (Sep. 4, 2014).

[22] The December 4, 2015 letter referred to PW 2651, and the December 8, 2015 letter referred to PW 2654.  Both letters were sent via the same UPS parcel, tracking number 1Z4015W71290118191, and delivered to the Applicant on December 21, 2015.

[23] 44 C.F.R. § 206.206(a).

[24] While the Grantee did provide a memorandum supporting part of the Applicant’s claim regarding PW 2654, the memorandum did not specify the provisions in federal law, regulation, or policy with which it believed the action was inconsistent.  FEMA acknowledges, the Grantee attached to the memorandum a letter from an auto supply company, wherein it was asserted unit RL-704 was not repairable.

[25] As a general condition, applicants must also provide FEMA with access to documents and records pertinent to the awards.  2 C.F.R. § 215.52(e).

[26] Stafford Act § 403(a).

[27] 44 C.F.R. § 206.201(b).

[28] Id. § 206.223(a)(1).

[29] FEMA Disaster Assistance Fact Sheet, Disaster Assistance Policy DAP9580.104, Public Assistance for Ambulance Services, at 1 (Jan. 2, 2009).

[30] The Applicant contends FEMA lost its calls logs, but offers no support thereof.  Nevertheless, the Applicant was required to retain all documentation supporting its claim for no less than three years.  This is a condition of the grant stated in the PW.  PW 2651, Chevra Hatzalah, (Version 0); Moreover, federal regulation requires that supporting documents pertinent to an award shall be retained for a period of three years from the date of the final expenditure report.  44 C.F.R. § 215.53(b).

[31] Stafford Act § 312(a).

[32] 44 C.F.R. § 204.62(a); Disaster Assistance Policy DAP9525.3 Duplication of Benefits, at 2 (July 24, 2007).

[33] Disaster Assistance Fact Sheet Disaster Assistance Policy DAP9580.3, Insurance Considerations for Applicants, at 2 (May. 29, 2008).

[34] 44 C.F.R. § 204.62(a).

[35] Neville Auto Supply Letter.