Garamendi Demands FEMA Deliver Remaining COVID-19 Payments to California Hospitals

WASHINGTON, D.C. — This week, Representative John Garamendi (D-CA-08) led a letter, along with 24 California Democratic colleagues, urging that the Federal Emergency Management Agency (FEMA) reimburse the $460 million still owed to California Hospitals for emergency expenses incurred during the COVID-19 pandemic.

During COVID-19, hospitals expanded capacity and invested in ventilators and PPE, often at the request of state or local governments. These funds from FEMA are crucial for California’s healthcare system, where nearly half of all hospitals operate at a loss.

In the letter, the lawmakers wrote, “Throughout the COVID-19 pandemic, hospitals in California were essential in treating patients while also maintaining their core mission of delivering healthcare services to everyone in need. However, in their response to the crisis, these hospitals faced significant financial burdens as they expanded their capacity—often at the request of state or local governments. They also invested in critical resources such as ventilators, secured substantial supplies of personal protective equipment, and hired additional clinical staff to ensure they could continue providing care to their communities.”

“However, FEMA has failed to fulfill its obligation to reimburse our healthcare systems for the care and services they delivered. Recent data shows that 260 of California’s hospitals and health systems have applied for $3.4 billion in FEMA public assistance and $2.84 billion has been obligated.1 Many of these outstanding claims date back to 2020.2 We appreciate the progress FEMA has made since November in obligating these funds and ask that the remaining funds be promptly obligated to ensure California’s hospitals can continue their vital work.”

The full text of the letter can be found here and below. 

Dear Acting Administrator Hamilton,

We respectfully request that you take immediate steps to expeditiously obligate and disburse the remaining $460 million outstanding claims for eligible expenses incurred in responding to the COVID-19 pandemic submitted by Californian hospitals and health systems.

Throughout the COVID-19 pandemic, hospitals in California were essential in treating patients while also maintaining their core mission of delivering healthcare services to everyone in need. However, in their response to the crisis, these hospitals faced significant financial burdens as they expanded their capacity—often at the request of state or local governments. They also invested in critical resources such as ventilators, secured substantial supplies of personal protective equipment, and hired additional clinical staff to ensure they could continue providing care to their communities.

However, FEMA has failed to fulfill its obligation to reimburse our healthcare systems for the care and services they delivered. Recent data shows that 260 of California’s hospitals and health systems have applied for $3.4 billion in FEMA public assistance and $2.84 billion has been obligated.

Many of these outstanding claims date back to 2020.2 We appreciate the progress FEMA has made since November in obligating these funds and ask that the remaining funds be promptly obligated to ensure California’s hospitals can continue their vital work.

California’s hospitals were critical in ensuring the health and safety of our communities during the COVID-19 pandemic. Yet, the failure to deliver on the outstanding FEMA applications has left our hospitals in a precarious position. Nearly half of the state's hospitals operate at a loss every day while providing care, and an additional 12% are only just above breaking even. Already, our communities are seeing service cuts and facility closures.

Moreover, by 2030, our hospital and health systems will face a critical inflection point as state requirements for seismic safety will go into effect. Current budget deficits, made worse by delayed FEMA payments, will only be exacerbated by the proposed decreases in federal reimbursement for Medicare and Medicaid patients. This combination of factors could put California’s healthcare system, particularly for care providers in rural and low-income areas, on the brink of crisis.

It is critical to act quickly to allocate the remaining $460 million in federal reimbursements for hospitals’ costs incurred in responding to the COVID-19 pandemic and ensure that our healthcare systems receive the compensation they deserve. We stand ready to work with you to accomplish this.

The letter was co-signed by the following California members: Representative Nanette Barragán, Representative Julia Brownley, Representative Salud Carbajal, Representative Judy Chu, Representative Gilbert Cisneros, Representative Lou Correa, Representative Jim Costa, Representative Laura Friedman, Representative Robert Garcia, Representative Jimmy Gomez, Representative Jared Huffman, Representative Sydney Kamlager-Dove, Representative Ted Lieu, Representative Doris Matsui, Representative Kevin Mullin, Representative Jimmy Panetta, Representative Nancy Pelosi, Representative Raul Ruiz, Representative Linda Sánchez, Representative Mark Takano, Representative Mike Thompson, Representative Norma Torres, Representative Juan Vargas, and Representative George Whitesides.

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