Disaster aftermath: Hospitals may have to fight for federal funds to rebuild

California wildfires
Hospitals recently damaged by the California wildfires and Hurricanes Harvey, Irma and Maria may not get enough federal funds to rebuild facilities, according to an AP analysis. (AP Photo/Jeff Chiu via Newscred)

Although the Department of Health and Human Services has declared public health emergencies in California due to raging wildfires and in Texas, Florida, Puerto Rico and the U.S. Virgin Islands for the hurricanes that caused widespread devastation, hospitals damaged in those disasters may not find the federal government will be as willing to provide all the funds they need to rebuild the facilities.

Indeed, over the last 10 years, the Federal Emergency Management Agency has paid out billions of dollars to help communities, but has also denied appeals for more than $1 billion requested by local governments and nonprofit groups to rebuild after major disasters, according to an analysis by The Associated Press that reviewed 900 final appeal rulings. And those findings may indicate what some healthcare organizations may face in the wake of the California wildfires and Hurricanes Harvey, Irma and Maria, the report noted.

Take for example the troubles that Henry Mayo Newhall Memorial Hospital in Santa Clarita has encountered after a 1994 earthquake on Southern California. The AP reports that the hospital requested $35 million to rebuild the facility to meet California’s new earthquake codes. FEMA did give the organization $21.5 million, but in 2004 asked for $2.1 million back, citing the lack of documentation to justify the costs. The hospital has filed for bankruptcy protection due to underfunding of the project but has lost two rounds of FEMA appeals. So far, it has yet to repay the agency.

"You’re struggling, you’re putting people on payment plans ... getting new loans at high interest rates, paying the bankruptcy costs," Hospital President and CEO Roger Seaver told the AP. "Then here comes the government back to help us again by taking back money."

Christopher Logan, FEMA’s public assistance director, told the publication that the agency has taken steps to reduce misunderstandings that have led to years of appeals and frustration. Among the changes: providing each applicant with a liaison who provides more information about the application and appeal process.

Common reasons for denials of disaster aid are that it doesn’t meet the agency’s definition of an “immediate threat” to life or property, disputes on whether damaged buildings should be replaced or repaired, and determination that the damage was caused by prior neglect, not by the actual disaster, the AP notes in a second story.

In recent years, hospitals damaged by natural disasters have rebuilt the facilities to withstand the elements. For example, after Hurricane Katrina, a Veterans Affairs facility in New Orleans planned to rebuild with emergency rooms at least 20 feet above base flood levels and moved kitchens, electronic components and emergency generators to upper floors. In Missouri, Mercy Hospital Joplin has incorporated safe rooms deep in the core of the building after a tornado destroyed the facility in 2012.