California’s Medi-Cal program has fully restored funding to San Francisco’s Laguna Honda Hospital more than a year after the public nursing facility was threatened with closure, a major reprieve and victory for the 156-year-old nursing home.
The state approved the hospital’s application to rejoin Medi-Cal just five days after it was submitted, giving residents and officials a sigh of relief after nearly two years of uncertainty. Federal and state regulators decertified Laguna Honda from Medi-Cal and Medicare in 2022.
“With this funding secure, Laguna Honda is here to stay,” San Francisco Director of Public Health Grant Colfax said at a press announcement Wednesday. “This represents a new beginning for Laguna Honda. Going forward, Laguna Honda will be the exemplary model of the new, modern skilled nursing facility.”
Laguna Honda is the largest public nursing facility in the state and is home to nearly 500 medically fragile residents with needs ranging from stroke rehabilitation to dementia treatment and mental health care. In 2022, federal regulators at the Centers for Medicare & Medicaid Services decertified Laguna Honda after finding numerous health and safety shortcomings across multiple inspection surveys, which were triggered after the hospital self-reported two non-fatal overdoses on-site.
Medi-Cal covers about 95% of residents at the facility, making the state’s health-care program a crucial financial lifeline.
Acceptance back into Medi-Cal means that the $200 million the hospital relies on annually to cover its majority lower-income residents will continue to flow, soothing fears of a shutdown. A legal settlement in 2022, in the meantime, extended the funding while the hospital worked to address deficiencies cited by regulators.
