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Funding Options For A Shelf-Stable Disaster Supply

Funding Options for a Shelf-Stable Disaster Supply

Disaster planning requires investments of time and money — and it is mandatory that healthcare facilities be prepared before the disaster strikes! The Centers for Medicare & Medicaid Services (CMS) oversees regulations for all healthcare communities receiving federal funding and requires emergency preparedness for all healthcare facilities. E-0015 of the 2016 CMS Disaster Rule states each healthcare provider must have provision of subsistence needs for staff and patients, whether they evacuate or shelter in place, and include, but are not limited to the following: (i) Food, water, medical and pharmaceutical supplies. How are communities meeting this critical requirement?

The past two years have provided many lessons in disaster planning and management. In an environment of competing healthcare priorities, funding a comprehensive disaster plan may be a challenge. Don’t forget about emergency nutrition preparedness! When it comes to planning, some healthcare communities continue to manage a traditional canned and boxed food supply from the Food and Nutrition Services’ per-person-per-day budget and purchase their shelf-stable food and water plan in the same budget. However, many communities have separated their disaster supply spending out of food service into emergency management or used alternative resources to bolster their current shelf-stable supply.  Meals for All has supported healthcare throughout the United States for a decade and has found communities tend to purchase in one of five ways:

  • Purchase alongside budgeted food expenses
  • Capitalize purchase
  • Utilize Emergency Command Center funding
  • Bolster plan incrementally (add food and water over time)
  • Adjust the journal entering of the invoice to amortize it over one or more years

Purchase Outright

Purchasing outright is often ideal for facilities. Some campuses will always have the administrative support and budget to purchase a comprehensive supply from Food and Nutrition Services’ yearly budget. While this may be the simplest plan, an outright purchase is not feasible for many communities with competing priorities. We have found four common alternatives to an outright purchase.

Capitalize the Purchase

A capital expenditure is one of the most common ways campuses fund a shelf-stable supply. A long-term food and water supply is an asset which improves survey compliance and emergency readiness of a healthcare community.  While general food and water purchases are an ongoing operating expense item, an emergency supply is not a consumable purchase. As with many equipment purchases, emergency supplies — including food and water — with a multi-year shelf life may be amortized over their usual life.  Many CMS providers adjust cost reporting to classify a shelf-stable disaster nutrition solution as a capital expenditure, since supplies are shelf-stable, enhance the efficiency of your staff, fulfill a regulatory requirement and/or provide a required service. A shelf-stable supply is then classified as a long-term asset which improves survey compliance and emergency readiness. 

Include in Emergency Command Center

Since the start of the pandemic, many campuses have been revisiting community Emergency Command Center (EOC) operations. FEMA states in the document The EOC’s Role in Community Preparedness, Response and Recovery Activities (p2):  “Resources include communications and electrical power generation equipment (primary and backup), ventilation and water supplies, adequate food supplies, and arrangements for sleeping…. Fuel and batteries must be kept stocked, and any food supplies must have a long shelf life. If food and water are to be supplied by outside sources, these sources must be identified in the Standard Operating Procedures.”

Your communities’ EOC disaster nutrition plan may qualify as an eligible expense and even be included in funding from community or COVID relief.

Bolster Plan Incrementally

When taking advantage of capital budget or EOC funding, timing is critical. When both of those options are unavailable when you need them most, a third alternative is to add to a plan incrementally over time.  When a supply is organized by day of use, adding to a program day-wise or serving-wise becomes a simple and viable option. The leading challenge when adding to a plan incrementally is the management of past and future needs. When choosing to add to a plan over time, it is critical to work with your consultant and build a manageable schedule. Building a monthly or quarterly schedule is critical to eliminate future frustrations. Remember, during any transition period, you must have a complete disaster nutrition plan in place.

Journal Entry Adjustments

Adjusting the journal entry at the end of a fiscal year is common and the accounting department can post the invoice to amortize it over one or more years.

With a purchase that can be depreciated and amortized, many organizations may enter a journal entry adjustment at the end of the fiscal year. A potential benefit of year-end adjustments is the ability to amortize a supply over a fiscal year and not have to make further capital adjustments for the life of the product.

Funding is often the biggest hurdle facilities encounter when evaluating a shelf-stable emergency supply. Our team of Registered Dietitians and consultants always stay on top of trends, regulations and best practices in the industry, and are committed to assisting healthcare communities meet this challenge. Contact a Meals for All consultant at 916-832-MEAL (6325) today to evaluate additional funding resources and trends.  

Disasters don’t wait – bolster your disaster food and water plan today!

By Jo Miller, MPH, RDN, Vice President of Nutrition 

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