FEMA Urges Panel to Reject New Orleans Hospital Katrina Claim

FEMA has urged a federal arbitration panel to reject claims that the state is owed $492 million for hurricane damages to LSU’s Charity Hospital in New Orleans.

It’s the latest development in a fight over funds that are key to LSU’s finance plans for construction of a new $1.2 billion academic medical center.

The state dropped a FEMA appeal and decided to go the arbitration route to expedite a decision in a long-standing dispute that stems from 2005 Hurricane Katrina damages that shuttered the hospital.

FEMA’s position is detailed in a 92-page response filed with the arbitration panel Monday and released to the media Tuesday by LSU.

The Federal Emergency Management Agency argues that only $126 million is owed.

It further argues “the applicant has failed to meet its burden to demonstrate FEMA was arbitrary and capricious.”

The federal agency also said the state’s disagreement over FEMA’s method of calculating the funds owed “is misplaced and misinformed.”

FEMA said the hospital was already in disrepair at the time of the hurricane damage.

A report done for LSU concluded that $134.5 million in repairs were necessary back in 2002 pre-storm.

The state argues that storm-related damage to Charity Hospital exceeded 50 percent of the building and equipment, making it eligible for full replacement reimbursement.

LSU System executive counsel Ray Lamonica said there will be a pre-hearing conference to determine the next step within the next 10 days.

“It’s a question of whether the panel will need experts to assist it. It’s all very engineering directed at this point,” he said.

FEMA said the state is using “a technical analysis of damages and scope of work that fails to meet requirements” of federal law, implementing regulations and applicable policy.

The LSU academic medical center, for which the FEMA funds are needed, is part of a larger health-care complex in downtown New Orleans to include a new Veterans Administration hospital.

Information from: The Advocate, www.2theadvocate.com