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FEMA is in the process of updating and formalizing its approach regarding the duplication of
benefits for hospitals under the COVID-19 disaster declarations. On September 6, 2022, FEMA
released its proposed approach to resolving the potential duplication of benefits of patient
care revenue with Public Assistance funding. Previously, FEMA’s position on this issue was that
applicants were responsible for ensuring that they were not receiving duplicate payment for
projects and that they simply had to self-certify the same.

The proposed approach identifies projects as either “low-risk” or “high-risk” and establishes
different review thresholds for each to protect against duplication of benefits:

  • Low-risk projects are ones that fall under FEMA’s small projects threshold (less than $1
    million) and/or represents work for which the hospital does not receive patient care revenue.
    Applicants who only have low-risk projects will have to describe their approach to protecting
    against duplication and certify that they have deducted any amounts already received from
    their request for FEMA Public Assistance.

  • High-risk projects, in contrast, are ones for which the hospital has received patient
    care revenue and that exceed the FEMA large project threshold (over $1 million). FEMA
    has proposed that applicants who have at least one high-risk project would have the
    responsibility of completing a thorough review of cost and revenue information to determine
    whether these hospitals are receiving any duplication of benefits. These applicants have two
    options for this review:
  1. The applicant may propose its own methodology for identifying and addressing the
    duplication of benefits, or
  2. The applicant may choose to let FEMA conduct its own analysis. For projects totaling less than $25 million, the applicant may provide its operating costs and revenue, or FEMA will use publicly available financial information. For projects totaling more than $25 million, the applicant must provide detailed financial information. In either case, the Homeland Security Operational Analysis Center (HSOAC) will review the documentation to determine potential duplications. FEMA will then make the anticipated reduction.

DCMC Partners encourages its clients to determine and submit their own methodology for

high-risk projects, as waiting on HSOAC reviews could lead to substantial project delays. FEMA
expects to publish its final approach and process at the end of September and will commence
project reviews on October 1, 2022.

DCMC’s recovery experts are available immediately to assist all of their hospital clients in
evaluating their options and developing a methodology for high-risk projects. Please contact your
assigned Project Manager for more information.