Federal Arbitration Panel Orders FEMA to Pay $474 million to Rebuild Charity Hospital - February 2, 2010

An arbitration panel on January 27 ordered the Federal Emergency Management Agency (FEMA) to disburse $474 million to rebuild New Orleans' hurricane-damaged Charity Hospital in a new mid-city location. (Click here to read the panel decision.) The panel determined that the cost of renovating Charity would exceed 50 percent of the cost of building a new medical center, which, under the federal standards, means that FEMA must contribute funds to replace the hospital, not merely renovate it. In addition to the FEMA funds, the Louisiana state legislature has approved $300 million to rebuild Charity; the remainder of the $1.2 billion needed for the project will come from the sale of revenue bonds. According to the Louisiana State University Health System, construction of the new hospital will begin in November 2010, and it will be open for operation mid-2014.