FEMA finds that the Applicant has neither demonstrated that its claimed FAL SOE incentive pay costs were provided under a predisaster labor policy that meets FEMA policy requirements nor established that the claimed costs were directly tied to the performance or eligible work. Appeal Letter SENT VIA EMAIL Jeff Smitherman, Director Alabama Emergency Management Agency 5898 County Road 41 Clanton, Alabama 35046 Mary Murray Moss, Director Mobile Infirmary Association 5 Mobile Infirmary Circle Mobile, Alabama 36607 Re: Second Appeal – Mobile Infirmary Association, PA ID 097-U1EYO-00 FEMA-4503-DR-AL, Grants Manager Project 711594, Force Account Labor & Equipment Costs Dear Jeff Smitherman and Mary Murray Moss: This is in response to Alabama Emergency Management Agency’s (Recipient) letter dated July 8, 2024, which transmitted the referenced second appeal on behalf of Mobile Infirmary Association (Applicant). The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of funding in the amount of $731,758.00 for force account labor (FAL) State of Emergency (SOE) incentive pay costs. As explained in the enclosed analysis, I have determined the Applicant has neither demonstrated that its claimed FAL premium pay costs were provided under a predisaster labor policy that meets FEMA policy requirements nor established that the claimed costs were directly tied to the performance or eligible work. Therefore, this appeal is denied. This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals. Sincerely, /S/ Robert M. Pesapane Director, Public Assistance Enclosure cc: Robert D. Samaan Regional Administrator FEMA Region 4 Appeal Analysis Background The coronavirus (COVID-19) pandemic resulted in a major disaster declaration for the state of Alabama on March 29, 2020, with an incident period from January 20, 2020, to May 11, 2023. The Mobile Infirmary Association (Applicant), a Private Nonprofit healthcare system that operates a medical center, requested Public Assistance (PA) reimbursement for force account labor (FAL) State of Emergency (SOE) incentive pay. It provided FAL SOE incentive pay for its employees that performed normal duties while exposed to varying levels of risk from COVID-19 between March 27, 2020, and June 30, 2022. Specifically, the Applicant provided its employees an increased rate of pay depending upon the employee’s COVID-19 “risk” level (e.g., employees in very high-risk positions and units like “frontline” workers received 1.5 times their normal rate of hourly pay for hours worked). FEMA prepared Grants Manager Project (GMP) 711594 to capture Applicant’s claimed costs totaling $731,758.00. In support of its claim, the Applicant provided a sampling of pay stubs showing it provided SOE incentive pay, along with SOE and COVID care spreadsheets showing personnel who worked in the various units. On December 19, 2023, FEMA issued a Determination Memorandum, denying the Applicant’s request for FAL SOE incentive pay. FEMA found that the Applicant’s claimed costs were not eligible as they were not included in a predisaster written labor policy. First Appeal The Applicant appealed FEMA’s denial, stating that due to the pandemic and staffing shortages, it provided SOE incentive pay to recognize frontline employees who were regularly exposed to COVID-19. The Applicant stated its predisaster pay policy outlined procedures for differential, incentive, and reward pay for situations like COVID-19. In its appeal, the Applicant included a copy of its March 31, 2016 pay policy and two charts tracking COVID-19-related premium pay, in which it based the pay on levels of exposure to COVID-19 positive patients. The Alabama Emergency Management Agency (Recipient) forwarded the appeal to FEMA on December 19, 2023, requesting FEMA reconsider its denial of all costs. The FEMA Region 4 Regional Administrator denied the Applicant’s first appeal in a letter signed May 7, 2024. FEMA found that the Applicant’s claimed FAL SOE incentive pay was not authorized by a written predisaster labor policy as it did not specify the premium pay provided in this case; and did not provide non-discretionary criteria for when the Applicant activates the pay. Additionally, FEMA found the Applicant had not demonstrated the claimed costs were related to the performance of eligible emergency protective measures. Second Appeal In a letter dated July 5, 2024, the Applicant appealed FEMA’s denial. First, the Applicant states its predisaster written policy addressed SOE incentive pay because it discusses differential, incentive, and production pay compensation. Second, the Applicant states that it had non-discretionary criteria to activate differential, incentive, or reward pay because the policy noted those types of pay should be invoked to “address [s]ystem needs, interests, or competitive environments.”[1] Finally, the Applicant attaches previously submitted documentation along with decisions by the Civilian Board of Contract Appeals, which it argues support its claim.[2] The Recipient submitted the appeal to FEMA on July 8, 2024, requesting reconsideration of the Applicant’s claim. Discussion Eligible emergency work includes emergency protective measures necessary to save lives and protect public health and safety.[3]In response to COVID-19, eligible emergency protective measures include emergency and inpatient clinical care for COVID-19 patients and certain labor costs associated with medical staff providing treatment to COVID-19 patients.[4]FEMA determines the eligibility of overtime, premium pay, and compensatory time costs based on the Applicant’s predisaster written labor policy, provided the policy: (1) does not include a contingency clause that payment is subject to Federal funding; (2) is applied uniformly regardless of a Presidential declaration; and (3) has set non-discretionary criteria for when the Applicant activates various pay types.[5] To be eligible, costs must be directly tied to the performance of eligible work.[6] It is the applicant’s responsibility to provide documentation to substantiate its claim as eligible and to clearly explain how those records support its appeal.[7] In this case, the Applicant provided SOE incentive pay to its employees depending on their level of exposure risk to COVID-19 patients. The predisaster pay policy, however, only provides a general description for all forms of compensation included in its policy such as base pay, incentive/production pay, call pay programs, differential, holiday pay, employee benefits and severance. It does not provide specificity on how or when differential or incentive/production pay applied. In contrast to prior second appeal decisions that have found criteria were non-discretionary when automatically triggered based on certain specific circumstances occurring,[8] the Applicant’s predisaster pay policy discussed invoking certain pay types based on the ambiguous language of “[s]ystem needs, interests, or competitive environments,”[9] which provides discretion to the Applicant on when to activate various pay types. Therefore, the Applicant has not demonstrated its predisaster written labor has non-discretionary criteria for when the Applicant activates various pay types.[10] Additionally, the Applicant states it elected to provide SOE incentive pay to recognize frontline employees who were regularly exposed to COVID-19. However, the documentation does not demonstrate that employees were conducting eligible emergency protective measures. For example, in the COVID Care Premium Summary spreadsheet submitted with the project, some employees are coded as being within the Emergency Department. This identifies where in the organization they work, but does not provide information as to what specifically the personnel were doing in that department, nor does it tie those employees to specifically eligible activities such as providing treatment to COVID-19 patients. Although the Applicant asserts the personnel were involved with COVID-19 care, the documentation does not substantiate that the claimed costs are directly tied to the performance of eligible work in response to COVID-19. Conclusion