DLNews Health:

Borrego Health transferred its 18 clinics and services to DAP Health in August 2023, settling over $110 million in debt with a $20 million payment. DAP Health will now operate the clinics and preserve employment for Borrego Health staff. The Borrego Health board will be downsized and oversee the organization's liquidation plan during bankruptcy.

Borrego Health Board Chair, Sandra Hansberger, expressed satisfaction that patients will still have access to essential healthcare services and employees will keep their jobs. DAP Health was chosen as a successor due to their commitment to maintaining continuity of care. The all-volunteer board worked towards transparent governance, including removing two board members and high-level executives who concealed vital information, hiring independent legal counsel, and taking legal action against those responsible for debt creation. The organization downsized, outsourced billing, revised compensation structures, and hired outside advisors.

 "In the interests of preserving health care for underserved communities, we hope that state and federal investigators will continue to thoroughly examine how such fraud could go undetected for an extended period and work to hold the wrongdoers accountable and make needed systemic changes in oversight. We believe our Board did all we could given that we do not have the power of the state to pursue investigations of this nature”, said Hansberger. 

State and Federal investigative agencies will have to decide whether to continue to pursue outstanding litigation initiated by Borrego Health to claw back funds that can ultimately be used for patient care.

"Although we managed to turn the organization around within a relatively short time frame," stated Sandra Hansberger, board chair, "our continued existence was contingent upon cooperation from the state, our largest creditor. To date, we expect all other creditors, except those under dispute, will be paid 100% of outstanding balances.” 

The board chair of Borrego Health hopes that state and federal investigators will hold wrongdoers accountable for undetected fraud while making necessary changes in oversight. Their organization has turned things around, expecting to pay all creditors except those under dispute. Bankruptcy was the only way to provide continued patient care, costing more than $10 million. The chair thanked dedicated individuals for their help in protecting patient care.