SF's Laguna Honda Hospital to remain open after federal funding extended through November 2023

SAN FRANCISCO -- Laguna Honda Hospital in San Francisco, a skilled nursing and rehabilitation center serving hundreds of low-income patients, will remain open through most of next year thanks a new deal that secured additional federal funding, the city attorney announced Wednesday.

The 150-year-old facility, owned and operated by the city's Department of Public Health, was slated to shut operations by November 13, the date when residents' Medicare/Medicaid payments would run out after an initial extension. In August, the city filed suit against the federal government over its decision to cut off funding to the nursing home and order the facility to wind down operations, transfering or discharging of all of its nearly 700 patients.

The U.S. Department of Health and Human Services (HHS) ended Laguna Honda's participation in its Medicare/Medicaid programs in April after the hospital was found out of compliance on multiple safety inspections, including finding contraband like drug paraphernalia on site, and failure to adhere to hand hygiene, documentation and infection prevention protocols.

On Wednesday, San Francisco City Attorney David Chiu announced his office had reached an agreement with the Centers for Medicare & Medicaid Services (CMS), which works under HHS, that extends federal funding to Laguna Honda through November 13, 2023 as part of a settlement in the city's lawsuit against the federal government.

"All parties are committed to ensuring that, regardless of income, people living in nursing homes are receiving safe, high-quality services and support. We are all focused on resident wellbeing while Laguna Honda continues to provide critically needed health care services for hundreds of residents," read a joint statement from the city, CMS, and the California Department of Public Health. "This settlement will allow Laguna Honda to continue to receive Medicare and Medicaid payments while addressing the quality improvements needed to ensure resident health and safety.

"Resident transfers & discharges will remain paused until February 2, 2023, & the agreement provides an option to extend that pause past February," said Chiu in a statement on social media. "Laguna Honda will continue to make quality improvements & work towards Medicare and Medicaid recertification."

"Laguna Honda is a crucial resource that serves some of San Francisco's most vulnerable," added Chiu. "We need to ensure this facility remains open for generations to come. Today's agreement is welcome step in that direction."

Senator Dianne Feinstein called Laguna Honda a "critical safety net for the city" in a statement. It additionally said, "I look forward to all parties involved expediting necessary improvements in order to avoid any further distress to the vulnerable patients served by the hospital."

Patient transfers and discharges were paused after at least nine patients were found dead within days or weeks after their relocation, including three that were sent to homeless shelters, according to the city attorney's office. Officials said the pause and the extension of payments would allow for a more "humane and compassionate path forward."

In the lawsuit filed against HHS and Secretary Xavier Becerra, San Francisco alleged that CMS forced the city to implement an unworkable closure and patient transfer plan that put them at risk, as well as deniying the city due process. 

"Our coalition of labor, patients, community supporters, and City leaders are working hard to keep the doors of this hospital open. Frontline workers and our union have remained singularly focused on pursuing recertification of our hospital so that the people who call Laguna Honda home can continue to receive the unique and comprehensive care they rely upon," read a statement from Laguna Honda certified nurse assistant and SEIU 1021 president Theresa Rutherford. "There truly is no other facility like Laguna Honda in the United States. We are all better off knowing that the life-saving care provided at Laguna Honda will remain available for another year while we continue working to address the issues identified by CMS."