Hospital Says FEMA Demanded It Buy Used Equipment on eBay After a Flood
INDIANAPOLIS (CN) - A regional hospital claims that FEMA "bungled its job" after a catastrophic flood in 2008 and reduced its disaster reimbursements because FEMA wanted the hospital to "find used replacement medical equipment on 'E-Bay.'" Columbus Regional Hospital demands $17.1 million in its federal complaint.
President George W. Bush declared 29 counties in south central Indiana a disaster area after the June 2008 floods.
"Columbus Regional Hospital's basement quickly, and completely, filled with water to the 12-foot ceiling. Even after the flood's waters began to recede, the entire first floor of CRH remained submerged under approximately one foot of water and mud," according to the complaint.
The hospital says it suffered $167 million in damages.
"Key medical equipment irreparably destroyed by the flood included radiology scanners, radiography and fluoroscopy systems, ultrasounds, cardiac catheterization labs, stereotactic biopsy tables, biochemical analyzers and instruments [and] immunoassay systems."
The hospital says it lost other "irreplaceable items," including employee records, "more than 10 years of valuable data," reference books and other documents.
It claims that "FEMA misapplied and misinterpreted federal law, falsely claiming CRH was seeking a 'double recovery' when it knew this was not the case, and FEMA demonstrated that this was not the case, several times. FEMA also refused to reimburse CRH for its purchases of comparable equipment damaged and destroyed in the flood, and implements a plan that shortchanged CRH by millions."
The complaint continues: "FEMA hired unqualified employees who claimed CRH was required to find used replacement medical equipment on 'E-Bay' that failed to meet CRH's standards (or any applicable medical standards), which would have exposed CRH to liability and delayed the restoration of CRH, at the risk of those Congress ordered FEMA to protect."
The hospital says it "obtained the maximum amount available under its insurance policy with the Federal Insurance Company ('Chubb'), the policy limit of $25 million."
The hospital says it "informed FEMA of the payment from Chubb and explained in detail what specific bills were paid with the insurance check," and added that it "did not seek to recover these insurance-paid expenses from FEMA."
After another meeting with FEMA, the only defendant in this case, CRH says that "FEMA took the position that CRH's eligible reimbursements must be cut by sixty-four percent ... by claiming that CRH improperly sought a 'duplication of benefits.'"
FEMA did this "despite the undisputed evidence ... that CRH ... did not seek reimbursement from FEMA for the bills it had already paid with Chubb's reimbursement, only FEMA-eligible expenses that had not yet been reimbursed," the complaint states.
FEMA "calculated the replacement cost for the damaged medical equipment ... on the assumption that CRH must replace its damaged equipment with used or refurbished equipment," the hospital says, and sued that reasoning to whack $1.5 million from the cost of replacement equipment.
The hospital demand $17.1 million from FEMA. It is represented by Brent Huber.