Sale of Borrego Health clinics to DAP Health finalized: What patients need to know

It's official: Borrego Health clinics are now under the ownership of DAP Health.

The sale received regulatory approval from the U.S. Health Resources & Services Administration on Monday. That was the last step needed after earlier approval from a federal judge overseeing Borrego Health's Chapter 11 bankruptcy case, which came after the organization alleged former top officials had stolen millions of dollars.

Little should change immediately for patients, who will keep existing appointments and, in almost all cases, be able to see the same providers at the same clinics.

DAP Health, with clinics of its own in Palm Springs and Indio, now adds Borrego Health's 18 clinics, two pharmacies and six mobile clinics in Riverside and San Diego counties. Those 18 clinics include Palm Springs Family Health, Stonewall Medical Center in Cathedral City and the Coachella Valley Community Health Center that opened in Coachella last July.

"I feel like the founders of this organization are smiling upon us saying, 'This is what health care should look like, this is what it means to create health equity for everybody,'" DAP Health CEO David Brinkman said Monday. "Our founders believed in their hearts that health care should be a human right ... and now that we're able to protect it for another 100,000 of our neighbors who are patients of Borrego Health, who were looking at losing their clinics, it feels like we're doing the right thing."

Sandra Hansberger, Borrego Health board chair, said in a statement: "We had initially hoped for a different outcome and envisioned a process where we could work with the state to hold the wrongdoers accountable and also overcome the staggering debt. Nonetheless, we are pleased that our patients will maintain access to essential healthcare services and our employees will have continued employment. DAP Health stood out as a successor due to its unwavering commitment to preserving continuity of care for Borrego's patients."

What patients need to know

Any patient at DAP Health or Borrego Health can make appointments at any location in this expanded system. Additionally, any appointments that have been made will remain as is.

DAP Health, which is based in Palm Springs, says there will be no interruptions in care, and every DAP Health and Borrego Health location will remain open, retaining its original name, branding and signage for at least the next 12 months. All insurance requirements remain the same as well, according to a patient information document.

All Borrego Health employees have been offered employment at DAP Health, and 99% have accepted, according to a press release. Most providers will continue to serve at the clinics where they have been working.

"It could not be a greater compliment that the team of Borrego, which is such an experienced group of health care professionals who are so dedicated to their patients and to their mission, see our vision and want to be a part of it," Brinkman said.

Brinkman has been meeting with Borrego Health staff members at various sites the last several weeks. He applauded their dedication and commitment over the last few years, weathering tough storms not only through the COVID-19 pandemic but also Borrego Health's bankruptcy filing.

"What is important to them is making sure they remove any barriers their patients face to accessing care, to staying in care, to achieving good health outcomes, to getting access to specialists, to retaining and retaining the best of the best in the industry," Brinkman added. "Number one, that was very inspiring to hear, but also number two, reconfirmed to me that people who work in health care are special people."

Hansberger also extended gratitude to staff members who have stood by Borrego Health: "We could not have continued to protect patient care without your hard work."

Prior to the acquisition, DAP Health’s programs and services included primary care, infectious diseases, gender-affirming care, LGBTQ+ care, mental health, dentistry, harm reduction, recovery services, affordable housing and social services. The Borrego Health disciplines now under DAP Health’s umbrella include family medicine, women’s health (including OB-GYN), pediatrics, veterans’ health, geriatrics, urgent care and pharmacy services.

Borrego Health provided approximately 386,000 patient care visits to more than 94,000 patients in 2021, according to court documents, and employed approximately 700 people. Its tax filing for the year ending June 30, 2020, shows annual revenue of almost $342 million, though revenue has fallen drastically since then.

By contrast, DAP Health saw more than 8,000 patients in 2021, according to a community impact report, and there are nearly 300 employees. Its tax filing for the year ending June 30, 2021, shows annual revenue of nearly $66 million. Brinkman said in June that the annual revenue is approximately $90 million.

How did we get here

Borrego Health filed for Chapter 11 bankruptcy protection following a number of changes and legal troubles in recent years, including having offices raided by the FBI and state investigators in October 2020 as part of a criminal investigation into potential Medicare fraud. In July 2022, Borrego Community Health Foundation sued a number of top former trustees and employees, alleging they schemed for years to siphon off millions of dollars from the corporation.

In November, its Board of Trustees announced it had begun a formal process to explore options for transferring operations of clinics to a "like-minded" federally qualified health center. These centers receive funds from the federal government to provide primary care services in underserved areas.

On Feb. 15, Borrego Health Board of Trustees announced it had selected DAP Health as the buyer, and a few weeks later, a U.S. bankruptcy court approved the sale.

Despite the sale, Hansberger said it's important for state and federal investigators to keep working to determine how the fraud happened and went undetected for so long.

What comes next

Much work will take place over the next year.

Brinkman said integration teams have been created to combine the two organizations' policies and procedures and set goals going forward. Formal transfers of clinic licenses, staff and clinicians from Borrego to DAP will take up to six months.

DAP plans to hire 24 additional clinicians to reach "appropriate staffing levels." It also has partnered with two organizations. Innercare, a nonprofit operating health care centers, dental clinics and Women, Infant, and Children Programs in Imperial and Riverside counties; and Neighborhood Healthcare, which operates health centers in San Diego and Riverside counties, will oversee delivery of services at the DAP Health clinics within their geographic areas.

By June 2024, clinics are expected to operate at full clinician-patient caseload capacity, which varies by site, according to the nonprofit. Approximately 138,000 patient visits are projected to occur over a 12-month period.

In June, the Desert Healthcare District's Board of Directors approved a $1 million grant to aid the Palm Springs-based health care provider during its first year of acquiring Borrego Health clinics. DAP Health will also provide $1.5 million in retention bonuses to Borrego Health employees, divided evenly among them.

In June, Brinkman said that over the next five years, DAP Health plans to invest $65 million "back into the Borrego Health system" to bring in additional outpatient drug treatment and nutrition programs and develop affordable housing units. He emphasized developing affordable housing or a new clinic — or both — in Thermal because "that community deserves better," adding many households do not have access to clean drinking water or reliable electricity.

Over the next 12 months, DAP Health’s executive leadership team — consisting of people from both organizations — will analyze all social determinants of health negatively impacting the patients served by the newly combined entity, according to a press release. It will engage fellow community organizations, government agencies, educational institutions and businesses to improve health outcomes. That could include adding programs and services or improving physical facilities.

With the acquisition finally official, Brinkman said the two organizations have an opportunity to form anew and take what they have learned over their histories to create something unique. DAP Health has spent its four decades addressing "how you can improve the immune system of individuals in addition to medical care, whether that means housing, mental health care, nutrition," he explained. Borrego Health has also worked toward locating clinics in marginalized communities so that people don't need to travel far to get the care they need.

"When I see layering those two strengths together, I see a really healthy future for everybody," Brinkman said.

Ema Sasic covers entertainment and health in the Coachella Valley. Reach her at ema.sasic@desertsun.com or on Twitter @ema_sasic.

This article originally appeared on Palm Springs Desert Sun: DAP Health now owns Borrego Health clinics: What to know