Work Eligibility
Appeal Brief
Appeal Letter
Appeal Analysis
Citation: FEMA-1498-DR-CA; Palomar Pomerado Health
Cross-reference: Increased Administrative and Operating Costs, Extraordinary Medical Care Expenses
Summary: As a result of wildfires Palomar Pomerado Health (Applicant) requested funding for costs associated with the activation of its Code Yellow disaster plan, staffing up its facilities to handle potential additional patient activity due to the fires, and for air monitoring and smoke and ash cleanup. FEMA prepared a draft Project Worksheet (PW) on January 15, 2004, in the amount of $160,280 to fund the costs requested. FEMA returned the draft PW to the State on February 26, 2004, stating that the majority of the costs were ineligible in accordance with Policy 9525.4 Medical Care and Evacuations. Accordingly, FEMA requested that the Applicant review its costs and resubmit the PW by March 30th with only eligible costs. On June 8, 2004, the State submitted a request for PW with a draft PW for reconsideration, and FEMA treated the submittal as a first appeal. FEMA denied the Applicants first appeal of the request for PW because increased operating costs and costs associated with the provision of medical care are not eligible for funding in accordance with Policy 9525.4. At the time the Applicant had not provided sufficient information to determine if the cost for monitoring air quality, and smoke and ash cleanup were eligible. FEMA also stated that the request for PW was submitted past the March 30, 2004, deadline for the submittal of new PWs. In its Second Appeal, the Applicant contends that FEMA denied eligibility of its costs in a mistaken belief that it was a PNP. The Applicant requests reimbursement for the work associated with the Code Yellow Alert ($97,704) and with the smoke and ash cleanup ($62,577).
Issues: (1) Are the extraordinary costs associated with the Code Yellow alert eligible?
(2) Do extenuating circumstances exist which would allow for a late submittal of the PW Request?
(3) Are the costs associated with ash and smoke cleanup eligible?
Findings: (1) No, increased administrative and operational costs are not eligible.
(2) Yes.
(3) Yes.
Rationale: Recovery Division Policy Number 9525.4, Medical Care and Evacuations
As a result of wildfires occurring between October 21, 2003, and February 2, 2004, Palomar Pomerado Health (Applicant), which owns and operates hospitals and other medical care facilities in San Diego and Riverside Counties, activated its Code Yellow disaster plan, staffing up its facilities to handle potential additional patient loads due to the fires. The Applicant also hired contractors and used force account labor, materials, and rental equipment to perform air monitoring and to clean its air filters, carpets, flooring, and counters of smoke and ash. The Applicant requested assistance from the Federal Emergency Management Agency (FEMA) for the force account labor costs associated with the mobilization of additional staff and the costs associated with the cleanup.
FEMA prepared a draft Project Worksheet (PW) on January 15, 2004, in the amount of $160,280 to fund the labor costs associated with mobilization of staff in response to the Code Yellow alert and the costs associated with the cleanup of ash and fire-related debris.
However, during PW review, FEMA determined that the increased operating costs associated with the Code Yellow alert were not eligible. On February 3, 2004, FEMA prepared a memorandum requesting that the Applicant resubmit the claim by March 30, 2004, to include only those costs eligible for FEMA assistance.
In preparing the draft PW FEMA misclassified the Applicant as a Private Non Profit (PNP) organization. However, on February 5, 2004, the FEMA Office of General Counsel (OGC) at the JFO determined that the Applicant was, in fact, a Special District organized under Californias Local Healthcare District Law, and not a PNP. On February 26, 2004, FEMA asked the State to convey to the Applicant its February 3rd memorandum concerning ineligible costs and the OGCs February 5th memorandum concerning applicant eligibility.
Request for PW/First Appeal
On June 8, 2004, the State requested, on behalf of the Applicant, that FEMA prepare a new PW for labor, materials, contract work, and rental equipment for cleaning air filters and vents, carpets, and flooring; performing air monitoring and particle counts; and for costs of implementing a Code Yellow disaster plan for six days. Due to the fact that the requested PW would include the same ineligible work and costs as the PW earlier submitted and rejected by FEMA, and differed only in that it listed the Applicant as a Special District, FEMA treated the request as a First Appeal.
On October 8, 2004, FEMA denied the Applicants first appeal of the request for a new PW because the increased operating costs and costs associated with the provision of medical care were not eligible for funding in accordance with Recovery Division Policy #9525.4, Medical Care and Evacuations. The first appeal response stated that the reasonable costs for monitoring air quality and smoke and ash cleanup may have been considered eligible, but the Applicant had not provided sufficient detail to determine which portion of the total cost was associated with the eligible work. Further, the appeal response stated that FEMA had established a March 30, 2004, deadline for submittal of a new PW and that the State had not submitted its request until June 8, 2004. The State informed the Applicant of the FEMA decision in a letter dated November 30, 2004.
On December 1, 2004, the Applicant submitted a written request to the State for reconsideration of FEMAs denial of its request to prepare a new PW. The State conveyed the Applicants request to FEMA in a letter dated May 17, 2005. In its letter the State resubmitted the Applicants draft PW of June 8, 2004, alleging that FEMAs earlier belief that the Applicant was a PNP had led FEMA to deny costs that otherwise would have been eligible if FEMA had treated the Applicant as a Special District.
On July 5, 2005, FEMA responded to the Applicants request for reconsideration stating that the regulations and policies applicable to the eligibility of this PW apply equally to PNPs and public agencies. In the letter, FEMA reminded the State that the Applicant had not submitted the information required to determine which portion of the total cost was eligible by the March 30, 2004, deadline and did not request a time extension for submitting the documentation.
Second Appeal
The Applicant submitted a second appeal of the FEMA determination to the State on July 12, 2005, which was transmitted by the State to FEMA in a letter dated September 9, 2005. The Applicant asserted again that FEMA had not reimbursed otherwise eligible costs due to the error in classifying it as a PNP. The Applicant requested that FEMA reimburse it for the costs associated with the cleanup of ash and smoke and its increased Code Yellow operating costs. The Applicant separated the cost of the smoke and ash cleanup from the costs associated with the staff mobilization due to the Code Yellow alert and provided documentation with its appeal in support of all costs, totaling $160,281.
In its letter, the State conceded that the extraordinary costs claimed by the Applicant for mobilization of medical staff were not eligible for FEMA funding, but recommended that costs in the amount of $62,577 for smoke and ash cleanup and abatement were eligible.
DISCUSSION
In its appeal, the Applicant states that the denial of cost eligibility was based on FEMAs incorrect determination that the Applicant was a PNP. Recovery Division Policy #9525.4 prohibits FEMA from reimbursing increased administrative or operations costs to hospitals, even as a result of increased patient loads. This prohibition applies uniformly to all eligible applicants, including Special Districts and PNP applicants. Therefore, the increased costs associated with the Code Yellow alert incurred by the Applicant in the mobilization of additional staff are not eligible for FEMA assistance.
In support of its appeal, the Applicant separated the costs associated with the smoke and ash cleanup and abatement from the Code Yellow alert costs. The smoke and ash cleanup and associated air monitoring are eligible emergency protective measures, as the work was necessary to eliminate or lessen an immediate threat to public health. The Applicant is claiming total costs of $62,577 for these measures. However, two adjustments to the Applicants claim for emergency protective measures were required, as follows
1. $210 was deducted for food provided to the Applicants staff. The provision of meals to staff is ineligible, because it is not necessary to accomplish the eligible work.
2. Errors totaling $446 were discovered in transposing numbers from the backup documentation to the summary sheet.
As a result of these adjustments, the total eligible cost for the smoke and ash cleanup and air monitoring is $61,921.
The Grantee submitted the request for PW to FEMA on June 8, 2004. While this did not meet the March 30, 2004, deadline for submittal of new PWs, the Applicant did meet the requirements outlined in 44 CFR §206.202(d)(1)(ii). A draft PW was prepared on January 15, 2004, within 60 days of the date of the Kick-Off Meeting, which was held on December 12, 2003. Technically, the request for PW submitted on June 8, 2004, was not a request for a new PW, as the PW had already been through a substantial level of review by the FEMA Project Officer. The Project Officer had worked with the Applicant, and the Applicant had prepared three versions of the draft based on input from the Project Officer. The PW was returned to the State on February 26, 2004. The PW was resubmitted after the Applicant understood that it was in fact an eligible applicant. It is reasonable to consider the confusionn >
The increased operating costs incurred by the Applicant associated with the Code Yellow alert are not eligible under FEMAs authorities. However, the smoke and ash cleanup and air monitoring are eligible emergency protective measures. The FEMA Regional Office will prepare a PW in the amount of $61,921 to reimburse the Applicant for these costs. The Applicants appeal is partially granted.
Appeal Brief
| Disaster | FEMA-1498-DR |
| Applicant | Palomer Pomerado Health |
| Appeal Type | Second |
| PA ID# | 073-U20OT-00 |
| PW ID# | N/A |
| Date Signed | 2006-04-17T04:00:00 |
(2) Do extenuating circumstances exist which would allow for a late submittal of the PW Request?
(3) Are the costs associated with ash and smoke cleanup eligible?
(2) Yes.
(3) Yes.
Appeal Letter
April 17, 2006
Mr. Paul Jacks
Governors Authorized Representative
Governors Office of Emergency Services
Post Office Box 419023
Rancho Cordova, California 95741-9023
Re: Second Appeal Palomar Pomerado Health, PA ID 073-U20OT-00,
Work Eligibility, FEMA-1498-DR-CA
Dear Mr. Jacks:
This letter is in response to the referenced second appeal transmitted by your letter dated September 9, 2005. In its appeal, Palomar Pomerado Health (Applicant) requested that the Federal Emergency Management Agency reimburse it for the work associated with staffing up its facilities to handle potential additional patient activity due to the fire, in the amount of $97,704, and for air monitoring and smoke and ash cleanup, in the amount of $62,577.
As explained in the enclosed analysis, we have reviewed the information provided and concluded that the increased operating costs associated with staffing its facilities to handle the potential additional workload are not eligible for reimbursement in accordance with Recovery Division Policy Number 9525.4. However, the air monitoring and smoke and ash cleanup are eligible emergency protective measures. The eligible costs of emergency protective measures is $61,921. Therefore, the Applicants appeal is partially granted.
Please inform the Applicant of this decision. This determination constitutes the final decision on this matter pursuant to 44 CFR §206.206.
Sincerely,
/S/
David Garrett
Acting Director of Recovery
Federal Emergency Management Agency
Enclosure
cc: Karen E. Armes
Acting Regional Director
FEMA, Region IX
Mr. Paul Jacks
Governors Authorized Representative
Governors Office of Emergency Services
Post Office Box 419023
Rancho Cordova, California 95741-9023
Re: Second Appeal Palomar Pomerado Health, PA ID 073-U20OT-00,
Work Eligibility, FEMA-1498-DR-CA
Dear Mr. Jacks:
This letter is in response to the referenced second appeal transmitted by your letter dated September 9, 2005. In its appeal, Palomar Pomerado Health (Applicant) requested that the Federal Emergency Management Agency reimburse it for the work associated with staffing up its facilities to handle potential additional patient activity due to the fire, in the amount of $97,704, and for air monitoring and smoke and ash cleanup, in the amount of $62,577.
As explained in the enclosed analysis, we have reviewed the information provided and concluded that the increased operating costs associated with staffing its facilities to handle the potential additional workload are not eligible for reimbursement in accordance with Recovery Division Policy Number 9525.4. However, the air monitoring and smoke and ash cleanup are eligible emergency protective measures. The eligible costs of emergency protective measures is $61,921. Therefore, the Applicants appeal is partially granted.
Please inform the Applicant of this decision. This determination constitutes the final decision on this matter pursuant to 44 CFR §206.206.
Sincerely,
/S/
David Garrett
Acting Director of Recovery
Federal Emergency Management Agency
Enclosure
cc: Karen E. Armes
Acting Regional Director
FEMA, Region IX
Appeal Analysis
BACKGROUNDAs a result of wildfires occurring between October 21, 2003, and February 2, 2004, Palomar Pomerado Health (Applicant), which owns and operates hospitals and other medical care facilities in San Diego and Riverside Counties, activated its Code Yellow disaster plan, staffing up its facilities to handle potential additional patient loads due to the fires. The Applicant also hired contractors and used force account labor, materials, and rental equipment to perform air monitoring and to clean its air filters, carpets, flooring, and counters of smoke and ash. The Applicant requested assistance from the Federal Emergency Management Agency (FEMA) for the force account labor costs associated with the mobilization of additional staff and the costs associated with the cleanup.
FEMA prepared a draft Project Worksheet (PW) on January 15, 2004, in the amount of $160,280 to fund the labor costs associated with mobilization of staff in response to the Code Yellow alert and the costs associated with the cleanup of ash and fire-related debris.
However, during PW review, FEMA determined that the increased operating costs associated with the Code Yellow alert were not eligible. On February 3, 2004, FEMA prepared a memorandum requesting that the Applicant resubmit the claim by March 30, 2004, to include only those costs eligible for FEMA assistance.
In preparing the draft PW FEMA misclassified the Applicant as a Private Non Profit (PNP) organization. However, on February 5, 2004, the FEMA Office of General Counsel (OGC) at the JFO determined that the Applicant was, in fact, a Special District organized under Californias Local Healthcare District Law, and not a PNP. On February 26, 2004, FEMA asked the State to convey to the Applicant its February 3rd memorandum concerning ineligible costs and the OGCs February 5th memorandum concerning applicant eligibility.
Request for PW/First Appeal
On June 8, 2004, the State requested, on behalf of the Applicant, that FEMA prepare a new PW for labor, materials, contract work, and rental equipment for cleaning air filters and vents, carpets, and flooring; performing air monitoring and particle counts; and for costs of implementing a Code Yellow disaster plan for six days. Due to the fact that the requested PW would include the same ineligible work and costs as the PW earlier submitted and rejected by FEMA, and differed only in that it listed the Applicant as a Special District, FEMA treated the request as a First Appeal.
On October 8, 2004, FEMA denied the Applicants first appeal of the request for a new PW because the increased operating costs and costs associated with the provision of medical care were not eligible for funding in accordance with Recovery Division Policy #9525.4, Medical Care and Evacuations. The first appeal response stated that the reasonable costs for monitoring air quality and smoke and ash cleanup may have been considered eligible, but the Applicant had not provided sufficient detail to determine which portion of the total cost was associated with the eligible work. Further, the appeal response stated that FEMA had established a March 30, 2004, deadline for submittal of a new PW and that the State had not submitted its request until June 8, 2004. The State informed the Applicant of the FEMA decision in a letter dated November 30, 2004.
On December 1, 2004, the Applicant submitted a written request to the State for reconsideration of FEMAs denial of its request to prepare a new PW. The State conveyed the Applicants request to FEMA in a letter dated May 17, 2005. In its letter the State resubmitted the Applicants draft PW of June 8, 2004, alleging that FEMAs earlier belief that the Applicant was a PNP had led FEMA to deny costs that otherwise would have been eligible if FEMA had treated the Applicant as a Special District.
On July 5, 2005, FEMA responded to the Applicants request for reconsideration stating that the regulations and policies applicable to the eligibility of this PW apply equally to PNPs and public agencies. In the letter, FEMA reminded the State that the Applicant had not submitted the information required to determine which portion of the total cost was eligible by the March 30, 2004, deadline and did not request a time extension for submitting the documentation.
Second Appeal
The Applicant submitted a second appeal of the FEMA determination to the State on July 12, 2005, which was transmitted by the State to FEMA in a letter dated September 9, 2005. The Applicant asserted again that FEMA had not reimbursed otherwise eligible costs due to the error in classifying it as a PNP. The Applicant requested that FEMA reimburse it for the costs associated with the cleanup of ash and smoke and its increased Code Yellow operating costs. The Applicant separated the cost of the smoke and ash cleanup from the costs associated with the staff mobilization due to the Code Yellow alert and provided documentation with its appeal in support of all costs, totaling $160,281.
In its letter, the State conceded that the extraordinary costs claimed by the Applicant for mobilization of medical staff were not eligible for FEMA funding, but recommended that costs in the amount of $62,577 for smoke and ash cleanup and abatement were eligible.
DISCUSSION
In its appeal, the Applicant states that the denial of cost eligibility was based on FEMAs incorrect determination that the Applicant was a PNP. Recovery Division Policy #9525.4 prohibits FEMA from reimbursing increased administrative or operations costs to hospitals, even as a result of increased patient loads. This prohibition applies uniformly to all eligible applicants, including Special Districts and PNP applicants. Therefore, the increased costs associated with the Code Yellow alert incurred by the Applicant in the mobilization of additional staff are not eligible for FEMA assistance.
In support of its appeal, the Applicant separated the costs associated with the smoke and ash cleanup and abatement from the Code Yellow alert costs. The smoke and ash cleanup and associated air monitoring are eligible emergency protective measures, as the work was necessary to eliminate or lessen an immediate threat to public health. The Applicant is claiming total costs of $62,577 for these measures. However, two adjustments to the Applicants claim for emergency protective measures were required, as follows
1. $210 was deducted for food provided to the Applicants staff. The provision of meals to staff is ineligible, because it is not necessary to accomplish the eligible work.
2. Errors totaling $446 were discovered in transposing numbers from the backup documentation to the summary sheet.
As a result of these adjustments, the total eligible cost for the smoke and ash cleanup and air monitoring is $61,921.
The Grantee submitted the request for PW to FEMA on June 8, 2004. While this did not meet the March 30, 2004, deadline for submittal of new PWs, the Applicant did meet the requirements outlined in 44 CFR §206.202(d)(1)(ii). A draft PW was prepared on January 15, 2004, within 60 days of the date of the Kick-Off Meeting, which was held on December 12, 2003. Technically, the request for PW submitted on June 8, 2004, was not a request for a new PW, as the PW had already been through a substantial level of review by the FEMA Project Officer. The Project Officer had worked with the Applicant, and the Applicant had prepared three versions of the draft based on input from the Project Officer. The PW was returned to the State on February 26, 2004. The PW was resubmitted after the Applicant understood that it was in fact an eligible applicant. It is reasonable to consider the confusionn >
The increased operating costs incurred by the Applicant associated with the Code Yellow alert are not eligible under FEMAs authorities. However, the smoke and ash cleanup and air monitoring are eligible emergency protective measures. The FEMA Regional Office will prepare a PW in the amount of $61,921 to reimburse the Applicant for these costs. The Applicants appeal is partially granted.
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