Columbus hospital suing FEMA for $17.1 million

Columbus Regional Hospital is suing the Federal Emergency Management Agency in an attempt to recover $17.1 million in federal funds the hospital claims it is owed due to damages caused by a massive flood.

The June 2008 flood, designated a federal disaster, caused $167 million in damages and business income losses to the hospital, which did not fully reopen until nearly five months later.

The suit, filed Sept. 15 in U.S. District Court in Indianapolis, accuses FEMA of violating federal regulations, negligence and misrepresentation for failing to pay the full amount the hospital says it is owed.

Specifically, the complaint says “FEMA misapplied and misinterpreted federal law, falsely claiming CRH was seeking a ‘double recovery’ when it knew this was not the case, and CRH demonstrated this was not the case, several times.”

The lawsuit also alleges that FEMA hired unqualified employees who claimed the hospital was required to find used replacement medical equipment on eBay that failed to meet its standards.

The "double recovery" allegation lobbed by FEMA stems from the hospital’s recovery of its maximum insurance policy limit of $25 million that covered business income losses, property damage and other expenses.

The hospital used the funds for payroll expenses, emergency restoration services and general rebuilding and restoration, the lawsuit said.

But FEMA countered that the hospital’s federal reimbursement must be cut by 64 percent—$15.9 million—because of the insurance payment. The hospital also is requesting the court award it an additional $1.2 million for medical equipment it replaced, which brings the total claim to $17.1 million.

“FEMA has wrongfully sought to justify this additional $15,913,492.64 cut in aid by claiming that CRH improperly sought a ‘duplication of benefits’ for its flood losses in contradiction of the Stafford Act and FEMA’s Disaster Assistance Fact Sheet,” the suit said.

The flooding from nearby Haw Creek filled the hospital’s basement to the 12-foot ceiling and partially submerged the first floor.

Key medical equipment destroyed by the flood included radiology scanners, radiography and fluoroscopy systems, ultrasounds, cardiac catherization labs, stereotactic biopsy tables and biochemical analyzers.

The 225-bed hospital also lost employee records, training documents, reference books, diplomas, important phone numbers, as well as “precious photos.”