Borrego Health Sale
Last updated 3/6/2023 at 10:17am
DAP Health was chosen by the Borrego Community Health Foundation Board of Trustees to acquire the Borrego Health clinics and remaining assets through an auction held as part of the Foundation’s Bankruptcy Court proceedings.
This after FBI/DOJ raids in 2020; fumbling around for two years, saying “No Problems;” filing a civil case against its itself, admitting that key leadership had committed fraud, bloated salaries, kickbacks, nepotism and signed false contracts with friends, filed for bankruptcy in November 22, saying they would, “ keep the clinics open.” The clinics are assumed to stay open under the new FQHC provider.
DAP, a single Riverside clinic, originated serving HIV patients, and has expanded into medical and dental services in the Coachella Valley. DAP served as the “Stalking Horse,” in the auction; setting and winning the highest bid of $50 million.
The non-profit’s bid included two partner FQHC nonprofits: Innercare, with clinics in Imperial Valley and Mexico, and Neighborhood Healthcare with clinics in San Diego, Imperial, and Riverside Counties.
Combined with Borrego Health’s 21 clinics and 10 mobile clinics, DAP’s alliance will have a total of 74 health clinics, including pharmacies and dental and specialty clinics, operating in San Diego, Imperial and Riverside Counties. What role these clinics will serve in relation to Borrego Health’s current clinics is not known.
Once the sale is approved by the Bankruptcy Court and the Federal Health Resources & Services Administration, DAP Health would assume control of all Borrego Health clinics. With operational and administrative support from Inner Care and Neighborhood Healthcare. Its multi-provider proposal focuses on addressing staffing shortages and bringing the current system up to a higher standard.
“Borrego Health delivers high-quality, essential care, and we began this process because the communities we serve need that care to continue,” said Rose MacIsaac, Chief Executive Officer of Borrego Health. “I am confident in DAP Health’s commitment to ensure our patients continue receiving culturally competent care from clinicians and support staff with local experience. I am looking forward to collaborating with this alliance of well-respected providers to shape a smooth transition that does not interrupt patient care or team members’ careers.”
“DAP Health is encouraged by today’s news that our bid is being advanced by Borrego Health to a court hearing to consider approval of the sale,” said David Brinkman, Chief Executive Officer of DAP Health. “We entered this process with one goal – to ensure that people who receive care today will find the doors to that care open tomorrow. It is with great humility, and with Borrego Health’s patients in mind, that we await a final decision.”
“This alliance empowers us to expand our quality, compassionate, whole-person care to more people, regardless of their circumstance,” said Rakesh Patel, MD, Chief Executive Officer of Neighborhood Healthcare. “We’re excited to be working with DAP Health and Innercare to make this a reality!”
“With a history of and expertise in caring for rural populations, Innercare is highly motivated to protect access for the thousands of patients who rely on Borrego Health,” said Yvonne Bell, Chief Executive Officer of Innercare. “It is with this goal in mind that we hope for a positive final decision that will allow us to bring Innercare’s strengths to the alliance.”
The Board’s selection will now be taken to the Bankruptcy Court and Health Resources & Services Administration for the necessary approvals, with the final sale hearing in Bankruptcy Court now scheduled for Wednesday, March 1 at 10 a.m.
The selection comes more than two years after scores of state and federal agents executed search warrants at multiple Borrego Health clinics and offices.
Although no criminal charges have yet been filed, the organization publicly said that former Borrego Health trustees, executives and vendors engaged in a sweeping fraud in a civil lawsuit.
“We began this process because the communities we serve need that care to continue,” MacIsaac said.
DAP Health Chief Executive Officer David Brinkman said he is grateful his organization was chosen by the Borrego Health leadership team.
According to its most recent federal tax filing, DAP Health collected $75 million in the year ended June 30, 2021.
It reported a patient case load of almost 7,000 people and a staff of nearly 300. At the end of the fiscal year, it reported some $13 million more in revenue than annual spending and closed the year with $48 million in net assets.
In addition to approval from a bankruptcy judge, the decision also requires sign-off from the Health Resources and Services Administration, an agency of the U.S. Department of Health and Human Services.
Borrego Health was founded in the 1980s as a single medical clinic aimed at serving the community of Borrego Springs. It grew to a network of dozens of clinics serving more than 90,000 in San Diego, Riverside and San Bernardino counties. By 2020, the Borrego Health budget had grown to more than $340 million, making it one of the largest federally funded health care providers in the country.
Borrego Health also remains mired in litigation with former vendors and landlords, including El Cajon developer and businessman Daryl Priest, whose offices also were searched by the FBI in late 2020.
Objections to the sale filed by DCHS and HRSA will be heard by the Bankruptcy Judge, Laura Taylor, at a later date.
Borrego Cares, a group of local residents and nationally and internationally respected scientists and health care specialists, opposed the sale of the Borrego Springs clinic, stating that the building and land were donations made to the community, not Borrego Health. And therefore, cannot be sold but must be returned to a Borrego Springs non-profit.
Another group of influential local leaders, requested the bankruptcy judge assure that the winner of the auction would promise not to close the Borrego Springs Clinic.
Founded in 1984 as Desert AIDS Project, DAP Health was the first community-based clinic dedicated to serving low-income patients with HIV/AIDS. In 2012, it was designated as an FQHC Look-Alike, in 2015 became a 330 grantee, and today serves the general community with a full complement of integrated and lifecycle-appropriate care. DAP Health’s service area boundaries are located within the Coachella Valley.
Established in 1970, Innercare (formerly known as Clínicas de Salud del Pueblo, Inc.) is a private nonprofit FQHC operating 10 health care centers; five dental clinics; and three Women, Infant, and Children Programs in Imperial and Riverside counties. Its service area encompasses 30 rural and urban zip codes boasting a total population of over 680,000. This area includes communities along the U.S.-Mexico and Arizona borders. It also serves communities ranging in size from Niland (pop. 1,610) to Hemet (pop. 127,443).
Founded in 1969, Neighborhood Healthcare operates 24 health centers in San Diego and Riverside counties, serving upwards of 87,000 unique patients each year, 97% of whom are at or below 200% of FPL. Some 61% identify as Hispanic and 41% are best served in a language other than English. With deep cultural understanding, Neighborhood Healthcare excels at providing health care for all stages of life, including pediatric and adult primary care, prenatal care, family planning, HIV testing, women’s health, dental services, and basic pharmacy and lab services.