Federal government changes its mind to reimburse New York for $ 860 million spent by the city to fight COVID-19

The U.S. Federal Emergency Management Agency (FEMA) has refused to reimburse the New York City hospital system for more than $ 860 million in emergency costs related to coronavirus for several months. According to the city's authorities, this is happening “because of a senseless payment formula incompatible with the real world,” reports NYDailyNews.

NYC Health + Hospitals (H + H), the organization that oversees the city's 11 public hospitals, filed a $ 864 million claim with the Federal Emergency Management Agency back in October 2020. The costs, according to the document, were associated with hiring additional medical personnel during the peak of the pandemic last year.

However, according to Mitchell Katz, head of H + H, FEMA denied the city's request for a refund in March this year. The department said it could not provide the indicated amount of reimbursement because H + H combined the cost of expanding coronavirus-related hospitals, which are reimbursable, with routine hospital operations that are not reimbursable.

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In June 2021, Katz wrote a letter to the head of FEMA, Dianne Criswell, in which he emphasized that the cost recovery protocols adopted by the department did not make much sense during the pandemic, because in 2020 all departments and medical workers in public hospitals in the city worked only for patients with COVID- 19, "especially during the dire months of March to August 2020."

He noted that many patients who were admitted to hospital for reasons unrelated to COVID-19 during this period ended up testing positive for coronavirus during hospitalization as the pandemic has spread everywhere.

For this reason, the staff “acted on the assumption” that every patient in a public hospital in the city was at risk at the time, and took “COVID precautions in their treatment,” Katz writes, justifying Health + Hospitals' request for federal compensation.

“FEMA's distinction between COVID and non-COVID areas is artificial and does not reflect the actual operating and clinical conditions and needs faced by H + H hospitals,” Katz wrote.

In addition to staffing, the H + H costs submitted for FEMA reimbursement relate to patient care and hospital equipment, according to a city official familiar with the matter.

Criswell, who served as New York City's Emergency Management Officer during 2020 before becoming head of FEMA in April 2021, found herself unaware of the situation. And after receiving the letter, Katz emphasized that the request for reimbursement of H + H expenses could not be denied.

“I don’t have the specific details of the waiver you are talking about, but such costs are reimbursable,” Criswell replied. At the same time, she stressed that she worked “hand in hand” with H + H in her previous position, and 2020 “was the most difficult year that I have experienced in my life.”

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A spokesperson for the FEMA Region-2 office, which covers New York, said the agency is now "re-examining the issue."

However, Katz said NYC Health + Hospitals held several meetings with FEMA officials from Region 2 back in April in hopes of fixing the problem, but they were all unsuccessful, and he does not believe that anything will change now.

Mitchell Katz stressed that it has been more than eight months since H + H first filed a refund request. He said the long delay has led to a dire financial situation in the city's public hospitals, which could jeopardize their "social safety net."

As a result, the Health + Hospitals chief demanded that FEMA immediately consider providing H + H with a $ 354 million reimbursement check that would cover the most pressing economic gaps in the hospital system pending the completion of a full request.