Laguna Honda Hospital and Rehabilitation Center needs millions of dollars in repair work as the nearly 187-year-old public nursing facility continues to seek good standing with federal regulators.
The San Francisco Board of Supervisors on Tuesday voted to authorize the city to spend up to $28.4 million on emergency renovations that officials say are integral to coming into compliance with Medicare.
The request for the emergency repairs funds comes about a month after California’s Medi-Cal program fully restored funding to Laguna Honda Hospital, and nearly two years since federal regulators decertified the hospital for multiple safety violations in 2022.
“The great progress we made and the Medicaid certification gave us a boost of confidence that we will be successful for the Medicare survey,” said Roland Pickens, director and chief executive of the San Francisco Health Network at a Health Commission hearing on Tuesday.
The vast majority of residents, many of whom are on extremely low and fixed incomes, rely on subsidized health care plans like Medi-Cal, which provides about $200 million in annual funding to Laguna Honda.
On Aug. 23, Laguna Honda officials submitted the hospital’s application to rejoin Medicare, Pickens said. Approval from Medicare is crucial to resuming admissions to the hospital, which have been on hold since regulators decertified it two years ago. That’s because most patients are enrolled in Medicare upon admission to the facility, Pickens said, and they later transition to the state-subsidized Medi-Cal program. If the hospital can’t accept Medicare patients, Pickens said, many people that the hospital seeks to serve would no longer meet admissions criteria.
Next, federal regulators with the Centers for Medicare & Medicaid Services will inspect the hospital, which could come at any time and without notice.
As part of that inspection, regulators will be looking for potential hazards and improvements to previously identified areas of concern, like medication storage and basic hygiene.
Several other repairs and renovations are in order, according to funding requests made and approved at the Board of Supervisors on Tuesday. The list of projects includes fixing HVAC system deficiencies and leaky fuel lines, and replacing items like an old X-Ray, kitchen freezer, water tank, kitchen floors and a backup power generator.
Several of the deficient conditions were identified before the recertification process began, city documents show. However, the Department of Public Health noted in a report to the city’s Budget and Finance Committee that they considered “their completion to be an emergency because they are critical to receiving and maintaining Medicaid & Medicare certification and funding.”
The Department of Public Health outlined some of the repair needs in a letter to Public Works back in May.
“As we did with the Medicaid survey, our goal is to demonstrate that we meet their high standards of resident care and safety and should be allowed reentry into the Medicare program,” Pickens said.
In 2022, the Centers for Medicare & Medicaid services ordered the hospital to move patients out. Out of 57 people who were transferred or discharged during that process, 12 died shortly after their relocations. City Attorney David Chiu then led a lawsuit against the federal government, and the relocation program was paused as part of their settlement agreement.
Hospital officials said they are no longer preparing for forced transfers to resume on Sept. 19, now that Laguna Honda is certified with Medi-Cal.
“We have no indication that anyone is expecting us to resume transfers on the 19th, nor are we making preparations,” Pickens said.
Only after Laguna Honda is readmitted back into Medicare will it resume admissions for new residents again, hospital officials said Tuesday. Laguna Honda is licensed for more than 700 residents but the total number of patients living there has dropped to nearly 500 while admissions have been frozen.
The hospital is rapidly trying to hire up in a few key areas before it can welcome new patients, too. Roles that need to be filled include nurses, food service workers and activity therapists.
Patients who were transferred after the hospital was decertified will receive preference to come back, if they still require skilled nursing and wish to return, Pickens said Tuesday.
At the meeting on Tuesday, several community members expressed concern and frustration with the slow process and how many San Francisco residents have had to go out of county for skilled nursing in the meantime.
“People are suffering having to go out of the county for hospitals,” said Teresa Palmer, a former physician at Laguna Honda Hospital and organizer with the advocacy group the Gray Panthers. “This is really a dangerous situation.”
It’s also unclear if the hospital will reopen all of its 700-plus beds after it does regain certification with Medicare.
Due to a change in federal regulations around room and board at nursing facilities meant to improve personal space and safety, Laguna Honda had to take about 120 of its beds that were in triple rooms offline.
The hospital must apply for a waiver in order to retain those beds, but Pickens said they won’t apply for that waiver until after the hospital meets Medicare standards.
“We recognize the importance of Laguna Honda in San Francisco,” Pickens said. “We take our responsibility to be open to admissions very seriously and are committed to doing so as soon as possible.”
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