ESCONDIDO — Palomar Health is applying for the second round of a state grant program aimed at expanding behavioral health treatment after losing a $50 million award earlier this year.
During a special meeting on Oct. 21, the Palomar Health Board of Directors voted to apply for “Round 2: Unmet Needs” of the Behavioral Health Continuum Infrastructure Program, or BHCIP.
Since 2021, the state Department of Health Care Services has awarded BHCIP grants to construct, acquire and expand properties to meet the growing need for behavioral health services across California.
Last year, voters approved Proposition 1, which included a $6.38 billion general obligation bond to fund behavioral health treatment facilities, residential care settings and supportive housing for people experiencing mental health conditions and substance use disorders. The Department of Health Care Services was authorized to award up to $4.4 billion in competitive BHCIP grants.
In May, Palomar Health received $50 million through the “Round 1: Launch Ready” portion of the $3.3 billion program — the public health district’s largest grant to date.
That changed over the summer. By August, the state rescinded the award after the district failed to provide documentation confirming the Palomar Health Foundation’s $5 million cash match.
The funds were intended to support an 84,700-square-foot, 120-bed psychiatric hospital planned for a new building on Palomar Health’s Escondido campus. The district held a groundbreaking for the project in 2024, but has made little progress since.
State health officials encouraged Palomar Health to reapply for Round 2 of the program.
Board members agreed the second application was “absolutely necessary” and expressed optimism about the outcome. The deadline to apply was Oct. 28.
The board also approved a new partnership with UC San Diego Health at the same meeting.
Initial plans for the partnership include establishing a comprehensive cancer center at the Escondido campus, developing two unfinished floors for specialty medical services and expanding other subspecialties.
Palomar Health officials emphasized that the joint powers agreement is not a merger or takeover by UC San Diego Health.
