Alaska Department of Health Approves Behavioral Health Hospital for Mat-Su Valley
2/19/2026
State approval marks major milestone in expanding inpatient mental healthcare
PALMER, Alaska — The Alaska Department of Health has approved Mat-Su Regional Medical Center’s Certificate of Need (CON) for a freestanding behavioral health hospital in Palmer, clearing a critical regulatory step to expand inpatient mental healthcare for adolescents and adults in the region.
The approved facility is designed to address Alaska’s growing behavioral health crisis by expanding timely, trauma-informed inpatient care close to home and easing strain on local emergency departments. Trauma-informed care is an evidence-based approach that recognizes the lasting effects of trauma and integrates this understanding into treatment to improve patient outcomes.
The 45-bed facility—planned for a 10-acre site east of the hospital’s main campus—will provide inpatient behavioral healthcare for both adults and adolescents. The project includes the relocation of 16 existing bed licenses from Mat-Su Regional Medical Center and expands overall regional behavioral health capacity.
“This approval reflects a demonstrated need we see every day in our emergency department and inpatient units,” said Taylor Rudd, CEO of Mat-Su Regional Medical Center. “It affirms the careful planning behind this project and the importance of expanding access to appropriate behavioral healthcare for patients in our community.”
Since opening its inpatient behavioral health unit in 2020, Mat-Su Regional Medical Center has seen demand dramatically outpace capacity. In 2024 alone, the hospital received 1,253 behavioral health referrals but was only able to admit 437 patients due to limited bed availability.
Statewide, more than 132,000 adults in Alaska live with a mental health condition, and suicide rates remain among the highest in the nation—particularly among teens and young adults.
“Too often, patients in the Valley who need inpatient behavioral healthcare are forced to wait in emergency departments or travel far from home for treatment,” Rudd said. “This facility is about improving access to the right level of care, at the right time, closer to where patients live.”
The project is a partnership between Mat-Su Regional Medical Center and the Mat-Su Health Foundation, which owns the proposed site at 1790 S. Woodworth Loop and helped initiate the effort to expand behavioral health infrastructure in the region.
“This approval underscores the value of strong community engagement and responsible, data-driven investment,” said Esther Pitts, president and CEO of the Mat-Su Health Foundation. “We’re proud to support a project that responds directly to community need and helps strengthen Alaska’s behavioral health system.”
With CON approval secured, the project will move into the next phases of planning and permitting. Construction timelines and additional details will be shared as they become available.
The estimated $70 million project is expected to create approximately 50 full-time, living-wage jobs while expanding access to inpatient behavioral health care in the Mat-Su Valley.
To learn more about the project and what comes next, visit www.LookForwardMat-Su.com.
Proposed Project Highlights
- Facility: Freestanding Behavioral Health Hospital (official name TBD)
- Location: 1790 S. Woodworth Loop, Palmer, AK (adjacent to MSRMC campus)
- Project Partners: Mat-Su Regional Medical Center (MSRMC) & Mat-Su Health Foundation (MSHF)
- Beds: 45 total inpatient beds (27 for adults and 18 for adolescents; includes relocation of 16 existing beds from MSRMC's inpatient unit)
- Size: ~50,000 square feet on 10 acres
- Estimated Cost: $70 million
- Jobs Created: ~50 full-time equivalent positions
- Construction Timeline: Estimated completion within 24–36 months of CON approval
About Mat-Su Health Foundation
Mat-Su Health Foundation (MSHF) is the official business name of Valley Hospital Association, Inc., which shares ownership in Mat-Su Regional Medical Center. In this capacity, the MSHF board members and representatives actively participate in the governance of Mat-Su's community hospital and protect the community's interest in this important healthcare institution through board oversight. The MSHF invests its assets into charitable works that improve the health and wellness of Alaskans living in Mat-Su. More information is available at www.healthymatsu.org.
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