Laguna Honda Hospital continues serving patients while addressing new findings

Despite significant improvements to patient safety, the Centers for Medicare and Medicaid Services has terminated Laguna Honda’s participation in the healthcare safety net program; City to reapply and demonstrate it meets all care requirements.
April 14, 2022

The San Francisco Department of Public Health (SFDPH) is committed to continuing to provide quality healthcare to the more than 700 patients at Laguna Honda Hospital and Rehabilitation Center (Laguna Honda) and keep the facility open while it addresses compliance issues raised by state and federal regulators.

The hospital will reapply to the Medicare/Medicaid programs after the Centers for Medicare and Medicaid Services (CMS) ended the hospital’s participation in the program on Thursday, April 14, 2022. Laguna Honda's state licensure is unaffected by this decision.

“Throughout San Francisco’s history, Laguna Honda has provided quality care and critical medical treatment to those in our City most in need,” said Mayor London N. Breed. “As we continue to address challenges brought on by the COVID-19 pandemic, we need to ensure that all patients have access to the services they depend on without the fear of any hospital funding being cut. We will continue to work with our partners at every level of government to come into compliance with the violations at hand.”

Laguna Honda has successfully passed multiple federal and state inspections over many years. CMS’s decision to pull funding was triggered by a requirement that the facility resolve all deficiencies by the end of a 6-month time period. That period began in October when state surveyors outlined and documented deficiencies in protocols related to preventing contraband, such as cigarette lighters and drug paraphernalia, on campus.

Importantly, the facility addressed the deficiencies having to do with the contraband. However, in the latest round of surveys this week, the state surveyors identified new issues not previously communicated to Laguna Honda leadership. Regulators found a number of unrelated and technical individual infractions primarily having to do with hand hygiene, documentation, and infection prevention and control, including an instance of a staff member not properly storing a face shield, lack of PPE signage on a unit, and two missed doses of a medication. There was insufficient time to address those deficiencies before CMS’s review period ended, and as a result, CMS moved to terminate Laguna Honda from the Medicare/Medicaid program, which funds more than two-thirds of Laguna Honda’s services.

The safety and wellbeing of Laguna Honda patients is the top priority, as evidenced by the hospital’s exemplary record in managing COVID during these last two years. SFDPH and Laguna Honda take the findings from state and federal regulators very seriously. Laguna Honda has worked with regulatory partners for months on previously identified findings and has already made significant changes at the facility to comply with regulations. Laguna Honda is already appealing some of the underlying citations from the fall that led to the CMS decision and is exploring all other available options while it works with CMS and the California Department of Public Health (CDPH).

Patients and staff will remain on site, and the facility will remain open as it reapplies for participation in the Medicare/Medicaid programs and works to come back in compliance. This will enable continuity of patient care at the safety net facility and allow the hospital to continue receiving Medicare/Medicaid program payments that support some of the City’s most vulnerable patients who are low to extremely-low income and have complex medical and behavioral health needs. It will also ensure Laguna Honda staff have no employment interruption. Payments will continue for at least 30 days during this process, and Laguna Honda will work with CMS to extend the 30 day-payment period.

“Laguna Honda serves as a critical part of our entire health safety net and it is home to hundreds of our most vulnerable residents in San Francisco,” said Director of Health, Dr. Grant Colfax. “We understand that the decision made today by CMS may cause anxiety for our community of patients, families, and staff. We will do everything it takes to continue serving San Francisco and we have full confidence that Laguna Honda, while working closely with local, state, and federal partners, will further improve our systems of care so that we may come back into compliance. We will continue to provide excellent care for patients and support our healthcare professionals.”

Changes made since October 2021 include improved processes to quickly identify prohibited items and better prevent such items from entering the Laguna Honda campus; implementing a new front entrance screening process; and safety measures to inspect packages and items brought for patients. Laguna Honda has also updated the tobacco product policy to add additional protections for the safety of patients who engage in outdoor smoking on-campus. Additionally, the facility is implementing new staff trainings; facility-wide safety updates; comprehensive support for patients with substance use disorders; further refinement of screening policies related to patients who leave and return to the hospital on day passes; and improvements to clinical safety searches, admissions, and discharges.

The SFDPH and the Laguna Honda leadership team are confident that the work taking place now will ensure the longevity of Laguna Honda and that the hospital will emerge a stronger organization that can continue to serve San Franciscan's most in-need.

About Laguna Honda Hospital and Rehabilitation Center
Laguna Honda Hospital, owned and operated by the San Francisco Department of Public Health, is a licensed skilled nursing facility serving approximately 700 patients with complex medical needs who are low or extremely low income as part of San Francisco’s healthcare safety net. Laguna Honda provides skilled nursing services such as dementia care, other therapeutic services, and rehabilitative therapy such as physical and occupational therapy.