Long-term Future of Laguna Honda Hospital Secure as the State Grants Medicaid Recertification

With approval to receive Medi-Cal funding, 150-year-old public hospital will continue to serve City’s most vulnerable residents
August 16, 2023

San Francisco – In a major victory for the City and County of San Francisco, the California Department of Public Health (CDPH) and the Department of Health Care Services (DHCS) today approved Laguna Honda Hospital (LHH) for Medicaid recertification, meaning critical Medicaid dollars will continue to flow to the institution. With more than 95% of LHH’s residents relying on Medicaid funding for their care, today’s action ensures that LHH will continue to serve San Francisco’s most vulnerable residents for generations to come.  

Laguna Honda Hospital represents a significant and extensive commitment by San Francisco to publicly fund, a long-term care facility and hospital for those with limited means. Representing more than 30% of all skilled nursing beds in San Francisco, LHH provides safety net healthcare services to hundreds of the City’s most vulnerable individuals with complex medical and care needs. There are few facilities in the area capable of caring for these residents, and even fewer that will accept them. 

In April 2022, the Centers for Medicare and Medicaid Services (CMS) terminated LHH’s participation in Medicare and Medicaid Provider Program. As a result of the termination, LHH was at risk of closing its doors after 150 years of serving San Francisco’s most vulnerable residents. In an agreement that was negotiated by the City Attorney’s Office, CMS agreed to continue paying for the care of residents at LHH if the hospital demonstrated the ability to meet all regulatory requirements and make rapid improvements including operational, institutional, and cultural changes needed for the long-term success of the hospital.   

Since that time, LHH staff have made the facility-wide improvements necessary to improve resident care and safety and the significant changes to meet the rigorous regulatory requirements and timelines set by CMS. Based on this progress, LHH applied for recertification into the Medicaid Provider Program on Friday, August 11, 2023.  

In a letter sent today, CDPH and DHCS, which oversee the Medicaid recertification process for CMS, approved the application and granted recertification in the Medicaid Provider Program, restoring certainty to the system that supports LHH residents. The recertification of LHH provides relief to residents and their families who can now be secure about the future of Laguna Honda. 

“This is tremendous news for the Laguna Honda Hospital community and the residents and families who rely on this critical facility,” said Mayor London Breed. “While this has been a challenging situation to navigate, I always believed that San Francisco would do what it takes to save Laguna Honda. I want to thank the Department of Public Health and all the staff at Laguna Honda for working with regulators and meeting the critical objectives set out to keep this hospital open. I also want to thank Speaker Emerita Nancy Pelosi, and all the City and State leaders who have advocated for the hospital over the last year and a half. Finally, I want to thank our state and federal partners for working with us to preserve one of our City’s most important public health institutions and one of the largest facilities of its kind in the country. Laguna Honda is a treasured part of San Francisco and I’m so happy that it will remain so for years to come.” 

"Laguna Honda has long been a pillar of the health and well-being for generations of San Francisco families," Speaker Emerita Nancy Pelosi said. "Achieving Medicaid recertification will ensure that San Franciscans most in need will continue to receive excellent care now and into the future. Today’s announcement is a testament to the hard work and dedication of the hospital staff and leadership to address areas of concern and to come into full compliance so that Laguna Honda is here to stay." 

“By working together, we have been able to resolve a critical situation at Laguna Honda Hospital and a decision that had put hundreds of vulnerable residents at risk and created anxiety and uncertainty for so many families,” said David Chiu, San Francisco City Attorney. “With recertification, we have preserved this important public health institution and restored an essential safety net for the people of San Francisco. Thank you to our government partners, Laguna Honda staff, the Department of Public Health, and many Deputy City Attorneys for all of the work that led to this wonderful result.” 

“Everyone at Laguna Honda and many more across the Department of Public Health have been working tirelessly toward this day,” said Dr. Grant Colfax, Director of Health for the City and County of San Francisco. “This is a great moment for our LHH residents and families who are our highest priority. I want to thank the employees of LHH, advocates, our union partners and our local, federal and state partners for working together to ensure San Francisco will continue to operate a world class skilled nursing facility that will serve as a model for California and the nation.” 

“The effort over the past 18 months by our team at Laguna Honda — providers, care givers, staff and management — has been exemplary,” said Roland Pickens, Director and CEO, San Francisco Health Network & Executive Sponsor, LHH Recertification Incident Command. “Our dedicated staff care deeply about the residents in our care and they have gone above and beyond to make sure Laguna Honda’s future is secure." 

About Laguna Honda Hospital 

For more than 150 years, Laguna Honda has been a pillar of San Francisco’s healthcare system, caring for those most in need and providing critical health care services. Laguna Honda serves as a safety net for residents with complex medical needs who are low or very low income and often have no other options for care. Many residents have complicated chronic medical needs along with behavioral health components (such as diagnosed mental illnesses and/or substance use disorders) and other social or behavior issues. 

Video of the press event may be viewed here