San Diego County\u2019s legislative delegation \u2014 three state senators and five Assembly members \u2014 plan to meet soon with top leaders at Palomar Health to \u201cdiscuss the circumstances\u201d surrounding the state\u2019s recent decision to rescind a $50 million grant earmarked to help build a 120-bed mental health hospital on the campus of Palomar Medical Center Escondido.<\/p>\n
The California Department of Health Care Services notified the North County medical provider\u2019s charitable foundation on Aug. 18 that the grant would be withdrawn after Palomar did not submit proof that it could meet a $4.9 million \u201ccash match amount\u201d necessary to secure the grant, which was among $3.3 billion in awards statewide announced<\/a> in May. The funds are part of the $6.4 billion in bonds that voters approved for mental health care and substance use treatment infrastructure when they narrowly passed the Proposition 1 ballot measure<\/a> in 2024.<\/p>\n When it became clear last week that the state had decided to end its award to Palomar, the county\u2019s behavioral health department said in a statement that it hoped the $50 million could remain in the region even if the funding is no longer allocated to Palomar\u2019s project. After all, the county wrote recommendation letters for applications made by a total of 31 local organizations seeking awards in the first round of the grant program. But the DHCS said in a recent statement that it has no plans to simply award the $50 million to the other local applicants whose proposals scored highest among the remaining 24 who did not get awards.<\/p>\n \u201cThe $50 million will be repurposed to be awarded in the Proposition 1 \u2026 Round 2: Unmet Needs Grant Program,\u201d a DHCS emailed response said.<\/p>\n The state began taking applications for the second round of Prop. 1 funding \u2014 said to allocate more than $800 million statewide \u2014 on June 2. The deadline for all requests is Oct. 28.<\/p>\n Returning $50 million to the statewide pool of available funds for round two did not seem to sit well with local legislators.<\/p>\n Their recent letter to Palomar executives, including Chief Executive Officer Diane Hansen, governing board Chair Jeff Griffith, and Kristin Gaspar, chief executive officer of the Palomar Health Foundation, said the rescission \u201crepresents a serious setback for expanding mental health treatment capacity in San Diego County, where the need is both urgent and growing.\u201d<\/p>\n Adding inpatient hospital beds in North County is a significant regional priority as both Tri-City Medical Center in Oceanside and Palomar have closed their units in recent years, requiring patients who need overnight treatment in locked facilities to travel south for care.<\/p>\n While the state\u2019s rescission letter notes that Palomar Health can reapply for Prop. 1 funds through the round two process, the letter sent to Palomar by San Diego County\u2019s legislative delegation seems to hold out some hope that there may yet be some way to keep the award, stating that local legislators \u201care committed to ensuring our region does not fall behind in delivering essential behavioral health services.\u201d The reason for the requested meeting with Palomar\u2019s top brass is said to be \u201cto discuss the circumstances surrounding the grant withdrawal and to better understand Palomar\u2019s plans.\u201d<\/p>\n The letter\u2019s signatories, listed alphabetically, include state Sens. Catherine Blakespear, Brian Jones and Akilah Weber Pierson, and Assemblymembers David Alvarez, Tasha Boerner, Darshana Patel, LaShae Sharp-Collins and Christopher Ward. Patel, whose 76th Assembly District includes much of inland North County, including Escondido, is taking point on setting up the meeting.<\/p>\n Asked to elaborate on the collective goal of the delegation\u2019s meeting with Palomar, Patel said in an email that \u201cwe need to understand how it was that money was left on the table, which would have benefitted a struggling hospital.\u201d<\/p>\n \u201cMy office took swift action this year to facilitate a bridge loan extension for Palomar Hospital,\u201d Patel\u2019s statement continued. \u201cWe remain committed to bringing Palomar into solvency and providing the community the health care it needs and deserves.\u201d<\/p>\n Patel supported a bill before the Assembly Committee on Health in April to extend the repayment period on existing zero-interest bridge loans, including an $8.6 million payment to Palomar, approved in 2022 that would have come due for repayment on Dec. 20, 2024. <\/p>\n Had the Legislature not extended the repayment period, hospitals\u2019 Medi-Cal reimbursements would have been garnished, an event that had it occurred would have been extremely dire for Palomar, which at the time was negotiating a forbearance agreement with private lenders.<\/p>\n