California has rescinded a $50 million grant awarded to Escondido-based Palomar Health for a planned behavioral health facility, The Coast News Group reported Sept. 9.
Here are seven updates to know:
- The grant was awarded in May 2023 as part of the state’s Behavioral Health Continuum Infrastructure Program.
- The award was the largest in the health district’s history, according to Kristin Gaspar, Palomar Health foundation’s president and CEO.
- The state rescinded the award on Aug. 18 after Palomar Health failed to submit documentation validating a $5 million cash match by the extended Aug. 15 deadline, according to a letter from the state Department of Health Care Services.
- The facility is planned as a 120-bed inpatient psychiatric hospital, located next to Palomar Medical Center. Construction has yet to begin, the report said.
- The 84,700-square-foot facility is slated to open in 2027, but the loss of funding may cause delays.
- Palomar Health has faced significant financial challenges, including a $165 million operating loss in fiscal 2024 and a forbearance agreement tied to more than $700 million in bonds.
- Moody’s downgraded Palomar Health’s credit rating to “Caa1” in January, citing critically low liquidity and ongoing cash flow losses. The district has also delayed nurse retention incentives of up to $100,000, according to the report.
