Grant Filing: COVID-19 and FEMA
Apr 6, 2020
As a result of the disruption of hospitals, healthcare systems and physician groups caused by the coronavirus, the main concern and focus is on patients, their families, and employees during this tremendously difficult time.
During this process, it is necessary to get as much funding as possible to cover additional costs incurred by the extra time and effort put forth including the larger quantity of supplies being utilized. The recent passage of the Federal Stimulus Bill had three relief packages, the third of which is The Coronavirus Aid, Relief and Economic Security (CARES) Act, passed on March 25th. Under this package, healthcare organizations have the opportunity to submit their incremental costs to obtain relief funding. These are costs that are in addition to the normal operating costs that are either “COVID-19 related” or “COVID-19 induced”. For example, extra PPE supplies fall into the former and opening new units to cohort non-COVID-19 patients would fall into the latter category.
The good news is that substantial funding is available. However, governmental rules and requirements around this funding will require an extreme degree of specificity, documentation, organization, and comprehensiveness – in order to actually receive this relief funding. This is somewhat akin to clinical documentation. If organizations don’t record their expenditures with sufficient specificity and have the backup data to support the claims, they will not be paid the correct amount, the amount they deserve.
Withum has the expertise, knowledge and references, including a former healthcare CFO with FEMA experience, to assist with disaster recovery funding in order to make this as easy as possible on those that are performing the work, but also sufficient to support the process of accumulating costs accurately in order to secure bank loans against promised federal support, through business interruption insurance claims and other funding mechanisms. The sole function of our internal team will be to organize the effort and perform the detailed accumulation and paperwork, with the assistance of the healthcare organization, by following these guidelines or instructions.
- Daily time records will need to be developed and kept for employees generating incremental costs of labor due to the incident.
- This will include OT of non-exempt staff caused by COVID-19, hired per diem or non-exempt staff to backfill a paid non-productive employee, new hires to fill COVID-19 responsibilities or to backfill due to the impact of COVID-19, or extra activities of non-exempt staff (e.g. pharmacy staff time to compound/mix medications that cannot be purchased pre-mixed, the time of IT staff to set up laptops for work at home, staff to man ED tent triaging, added security staff time due to visitor policy change, etc.)
- Will need to keep logs of activities individuals are performing. It will not be enough to only state “COVID-19 related” or “caused by COVID-19”.
- We do NOT recommend tracking time for Directors, Managers, VPs—who are paid 80 hours per cycle regardless of hours worked (salaried employees) as these are not incremental costs.
- Tracking of any donated labor resources to a similar level of detail.
- Kronos (or alike payroll system) approvals, accompanied with additional comments or comment codes, should be the trigger or means by which to identify the individuals to pursue (immediately upon the close of each pay cycle), the detail of hours worked by day on COVID-19 related matters, or induced by the COVID-19 incident. Need to use a “best-efforts” basis to recall and notate this specificity, working with employees and supervisor/timekeepers, and also garner further helpful supporting documentation such as activity logs kept by schedulers or the employee.
Supplies & Other COVID-19 Caused Expenses
- Any PPE and/or specific medical supplies related to the incident should be charged to a newly created COVID-19 cost center.
- Any other supply item or service (handwashing agents, remote working technology, contracted labor, etc.) associated with a COVID-19 matter, or incurred to support patient care or patient/employee safety during this event—should be charged to this same newly created COVID-19 cost center. Further examples:
- Tent rental
- Newly hired or re-hired staff employed temporarily as contracted labor/on 1099
- Computers purchased for work from home mandate
- Licensing of telehealth IT platform
- Tracking of any donated supplies or equipment to a similar level of detail.
- Maintaining procurement files—POs, copies of invoices, associated with COVID-19 procured services, equipment, supplies or other purchases.
- Supplies from stock will be quantified to determine incremental level of spend vs. historical norms.
The “Surge Hospital” – or Opened New Units
- The full operating costs for this facility or these designated new units, as it is, or they are, being renovated and operated to separate non-COVID-19 patients from those that require the more intensive and isolated care.
- Actual renovation and preparation costs for units.
Lost Revenues/Business Interruption
- Impact of COVID-19 on elective procedure revenue.
- An analysis to perform and evaluate drops in volumes occurring in surgery, cardiac, orthopedics…and other services (relative to historic norms), and quantify impact using average payment rates and payer mix.
- Further guidance under the CARES Act still forthcoming.
Resources for this Work
- Internal Resource is needed.
- Withum will be the external resource with FEMA expertise or disaster cost recovery experience to accumulate, organize and report on this data as will be required by FEMA.
- These costs would be offset by FEMA-funded management assistance fee of 4-5%.
- Time period covered is January 20, 2020, to 30 days after President declares the disaster is “over”.
Author: Domenic Segalla | email@example.com