FEMA Still Hasn’t Reimbursed Hospitals for COVID-19 Work

In late January, Republican Rep. Andrew Garbarino, chair of the House Committee on Homeland Security, inquired about the status of more than $1 billion that the Federal Emergency Management Agency had still not paid to New York health systems for COVID-19 expenses dating back to 2020.

Garbarino told NOTUS he is “still working with” the agency to obtain the documentation he requested in January to investigate the situation. The money still hasn’t been disbursed.

“It’s a lot of work that they did, and they were promised the reimbursement for,” he said. “And they’ve jumped through all the hoops. They’ve proven all the money that they were owed. And now they’re just waiting to get back. So, it really does affect their bottom line.”

Garbarino said he believes it is an issue that affects “all 50 states.” It is also now a problem compounded by the partial government shutdown at the Department of Homeland Security.

During the height of the COVID-19 pandemic, hospitals incurred tremendous expenses to treat patients and prevent the spread of the virus. Hospitals hired more medical professionals, purchased more beds and paid for ventilators, along with personal protective equipment.

Local governments and hospitals applied for reimbursement under FEMA’s Public Assistance Program. More than 1,000 COVID-related projects await reimbursement, according to a FEMA employee familiar with the situation.

Lawmakers are now trying to figure out why. And some are questioning how much Homeland Security Secretary Kristi Noem’s rule that requires she approve all expenses over $100,000 is playing a role in the delays.

In a letter to Noem, Garbarino said the payments “remain severely delinquent and subject to a lack of transparency and communication with recipients and subrecipients.”

“While streamlining FEMA’s grant administration is a valiant and shared goal, ongoing

delays coupled with the lack of information sharing regarding the status of reimbursement claims places further strain on the ability of hospital systems to adequately manage costs and respond to public health needs,” Garbarino continued.

Rep. Bennie Thompson, the top Democrat on the House Committee on Homeland Security, told NOTUS he has also “heard that Mississippi is missing tens of millions of dollars owed” from the reimbursement program.

“Our hospitals are depending on this promised funding and each day of delay is setting our States back,” Thompson told NOTUS in a statement. “If Secretary Noem thinks that withholding or delaying releasing these funds is improving Government efficiency, she is fooling herself and doing a disservice to the American people.”

Matt Elsey, an executive at the South Carolina-based Prisma Health, told NOTUS in a statement that his organization is waiting to be reimbursed on “three outstanding projects” related to COVID-19 response “totaling approximately $116 million.”

“These projects have all been reviewed and have been awaiting final approval for obligation since early 2025,” Elsey said in the statement. “While FEMA has been very responsive regarding Helene-related projects (all less than $100,000), we have received no similar communication from FEMA regarding reimbursement for these very large COVID-19 reimbursement projects.”

FEMA and the Homeland Security Department did not respond to NOTUS’ request for comment.

Slow reimbursements have increased financial burdens on hospitals already trying to make up for the more than $1.1 trillion cut to Medicaid that Republicans passed last year, industry players said.

“It’s long overdue,” Jonathan Cooper, senior vice president of government affairs at the Greater New York Hospital Association, told NOTUS. “And you see what’s going on at all the hospitals now post the One Big, Beautiful Bill Act, and what’s about to happen with this huge number of uninsured about to occur, and Medicaid being cut, and everything else.”

Trump’s budget law pushed some hospitals across the country to reduce services, with a rural hospital in Georgia citing “cuts to Medicaid” as a reason for closing its delivery unit. An estimated 11.8 million people could be left uninsured by 2034, according to the Congressional Budget Office.

“I would say that the money is more important than ever to really help provide hospitals, safety net hospitals across the state with the resources they need to deal with the current situation,” Cooper said.

In a statement to NOTUS, a spokesperson for the American Hospital Association said it looks forward to working with the agency to fix the situation.

“We have heard from our members about the challenges they are experiencing in getting reimbursed for work done years ago on behalf of their communities,” the spokesperson said. “This includes the distribution of billions of dollars’ worth of funds for hospital projects that have been approved by FEMA but not yet paid out as well as for projects that have been reviewed by the agency but not yet approved and paid out. FEMA also is now requesting that hospitals return funding for projects that had been approved and paid out — sometimes years after the distributions were made. We welcome the opportunity to work with FEMA to address our members’ concerns.”

Hospitals in some states have only recently been reimbursed for COVID expenses. East Alabama Medical Center was reimbursed $4.7 million at the end of 2024. The hospital requested the money in 2020, and only received it after a local emergency management director traveled to D.C. to speak with lawmakers.

In May, Rep. John Garamendi and members of the California congressional delegation sent a letter asking FEMA to reimburse $460 million owed to California hospitals. Garamendi’s office told NOTUS in an email that the state received money at the end of 2025, but could have received it “earlier if Noem hadn’t had to review every grant over $100K.”

“Well for the hospitals themselves, they had to find the money to pay for the services when people showed up sick at the emergency rooms,” Garamendi told NOTUS about the effect not receiving those payments had in California. “So, there was a lot of expenditures that the hospitals had to make. They were busily borrowing money to make the payments that they had to so that left the hospitals with a funding crisis,” he continued. “And that funding crisis just made it impossible for the hospitals to expand their services.”

Garbarino said he has talked to Noem about “about getting a further brief” on whether her expense approval rule will be “permanent.”

“You want to go after waste, fraud and abuse, I’m all for that,” Garbarino said. “It can’t all just fall on her. She’s got to rely on some of her deputies.”