Feds Grant SF’s Laguna Honda Hospital New Extension, Delaying Involuntary Patient Transfers

Federal regulators have agreed to again put off involuntarily transferring residents at Laguna Honda, the state’s largest public nursing facility, which fell out of compliance in 2022.

The reprieve came just one day before the hospital would have been forced to implement a closure plan that involves assessing and discharging the facility’s more than 500 medically fragile patients in preparation for a possible closure.

Laguna Honda now has until Sept. 19, 2023, before involuntary transfers could resume, according to a letter from interim CEO Roland Pickens. In addition, health insurance coverage for the hospital’s majority of patients who are on Medi-Cal and Medicare will continue through March 19, 2024.

“Today’s good news is the result of positive changes taking place at Laguna Honda,” said Pickens in a note to families on Thursday. “The additional time provided by the extension allows us the opportunity we need [to] be in the best position to apply for recertification.”

The hospital is now working to regain certification with the Centers for Medicare and Medicaid Services, the federal regulatory body that Laguna Honda fell out of compliance with in April 2022.

The hospital was cited for a number of safety issues across multiple regulatory surveys that were triggered after Laguna Honda self-reported two nonfatal overdoses that occurred on-site.

As a result, federal regulators stripped Laguna Honda from Medicare and Medi-Cal, subsidized health care plans that cover the vast majority of residents at the facility, most of whom have extremely low incomes.

While Laguna Honda works to address its citations, CMS has simultaneously required that the hospital craft a closure plan to continue its health care funding. That plan involved assessing and relocating as many patients as possible in 2022.

Of 57 residents who were transferred or discharged during that process, 12 died shortly after their relocations. The city sued the federal government in response, and the transfer process was paused temporarily as part of a settlement agreement.

“Involuntary transfers caused our residents, their families, and our staff a great deal of distress. Laguna Honda and City leadership, as well as residents, families, and advocates, have strongly advocated against the involuntary transfers,” a spokesperson for the hospital wrote Tuesday in a media release. “This is the humane and compassionate path forward for our residents, their families, our staff, and all those who care about Laguna Honda.”

Following the city’s lawsuit in November 2022, the city and CMS reached a settlement agreement to pause the involuntary transfers until February 2023 and to continue health care payments through November 2023.

In February 2023, regulators agreed to extend the pause on transfers to May 19.

Today’s update moves the deadline yet again to Sept. 19, 2023, and payments will continue through March 19, 2024.

“The city and Laguna Honda have done a tremendous amount of work to come into compliance with the hundreds of requirements that have been asked of us and we believe we are in a good spot,” said City Attorney David Chiu, whose office led the lawsuit against the federal regulators in 2022.

The hospital can apply for recertification after it successfully completes its next monitoring survey with CMS, which hospital officials say they expect to happen by the end of May or in June of this year.

“Laguna Honda is working diligently to make and sustain improvements that will serve our current residents and ensure Laguna Honda remains an essential part of the City and County of San Francisco’s commitment to public health,” the spokesperson said. “We remain confident that Laguna Honda is the best place for our residents to receive care.”

Meanwhile, senior and disability advocates have raised the alarm over the back-and-forth messaging that the hospital’s more than 500 residents and their families have endured throughout the regulatory spiral.

“Resuming evictions or whatever you want to call them is extremely dangerous,” said Teresa Palmer, who previously worked at Laguna Honda, in a recent town hall meeting about patients’ rights ahead of the looming discharges. “I don’t see how evictions and transfers can be resumed without severe consequences, not only to patients, but to the government agencies that are forcing them.”