San Diego Delegation Investigates Palomar’s $50M Grant Loss
UPDATE: The San Diego County legislative delegation is urgently meeting with Palomar Health leaders to address the shocking withdrawal of a $50 million grant intended for a new 120-bed mental health hospital at the Palomar Medical Center Escondido. This critical funding was rescinded by the California Department of Health Care Services (DHCS) after Palomar failed to provide proof of a necessary $4.9 million cash match by the deadline.
On August 18, 2023, the DHCS notified Palomar that the grant, part of a larger $3.3 billion funding initiative announced in May, would be revoked. This decision has significant implications for mental health care expansion in San Diego County, where demand is rising rapidly. The county’s behavioral health department expressed concern, hoping the funds could still benefit local organizations, but the DHCS confirmed that the money would be redirected into the upcoming Proposition 1 Round 2 funding.
Local legislators are voicing their frustration, as the rescission represents a major setback for mental health resources in the region. A letter from state senators and assembly members—including Diane Hansen, Kristin Gaspar, and Darshana Patel—describes the loss as “a serious setback for expanding mental health treatment capacity in San Diego County, where the need is both urgent and growing.”
The upcoming meeting aims to clarify the circumstances surrounding the grant’s withdrawal and explore Palomar’s future plans. Patel, representing the 76th Assembly District, stated, “We need to understand how it was that money was left on the table, which would have benefitted a struggling hospital.”
The situation at Palomar Health is dire. The hospital has faced financial instability, stemming from the overwhelming costs of building the Palomar Medical Center Escondido, which approached $1 billion. Compounding these challenges are insufficient reimbursement rates that have not kept pace with inflation. As a result, Palomar has had to negotiate forbearance agreements to avoid defaulting on over $700 million in outstanding revenue bonds.
The DHCS has opened applications for the second round of Proposition 1 funding, which allocates more than $800 million statewide, with a deadline of October 28, 2023. While Palomar can reapply, local lawmakers are eager to ensure that the urgent need for mental health facilities does not go unmet.
As the meeting approaches, the urgency intensifies. Lawmakers are advocating for the community’s health care needs, emphasizing the critical importance of adding inpatient beds to serve the North County area, especially as facilities like Tri-City Medical Center have also closed their units in recent years.
In an opinion piece published by the Times of San Diego, Gaspar labeled the rescission a “technical glitch,” asserting that Palomar intends to resubmit its request for funding in the second round. However, the state’s letter indicates that Palomar’s failure to meet the August 1 extension deadline for submitting necessary documentation was not abrupt, casting doubt on the hospital’s financial management.
The urgency of this situation cannot be overstated. As local leaders work to navigate the complexities of funding and healthcare provision, the community waits with bated breath for resolutions that could shape the future of mental health care in San Diego County.
With the legislative session set to conclude soon, all eyes are on the outcome of the planned discussions between the San Diego delegation and Palomar Health. The stakes are high, and the need is immediate. Stay tuned for further updates as this story develops.
