By Thomas K. Pendergast

After losing its certification to receive Medicare and Medicaid payments, thus requiring the transfer of more than 600 patients, Laguna Honda Hospital now faces more challenges, including the potential loss of 120 beds and dealing with a recent COVID-19 outbreak. 

The hospital has not lost its license, yet the bulk of the patients there are covered by Medicare and Medicaid. Both programs terminated the hospital’s participation after the U.S. Centers for Medicare and Medicaid Services (CMS) decertified it because of deficiencies in safety protocols, improper hygiene practices by the staff and two nearly fatal overdoses from illegal drugs brought into the hospital last year by patients.

 The CMS committed to giving the hospital financial help in relocating approximately 670 patients by mid-September but has since extended that deadline to Nov. 13. So far, 57 patients have been relocated, however, after nine of them died later, the CMS agreed to stop the transfers entirely, but only temporarily.

Meanwhile, the hospital is applying for recertification, which is a lengthy process involving surveys, and is dependent on the cooperation and speed of the CMS bureaucracy. At the earliest, this might happen in December, according to the hospital’s Interim CEO Roland Pickens.

The 156-year-old hospital is located on a 62-acre campus in supervisorial District 7.

At a San Francisco Board of Supervisors meeting on Sept. 13, Pickens explained that a CMS rule change in 2016 could mean that the hospital will not be recertified unless it sheds an additional 120 beds permanently.          

“Initially and currently, the communication we have from the CMS is that, because Laguna became decertified, that whenever we go for recertification, rather than holding us to the rules that were in place in 2010 … they’re going to hold us to the 2016 rules that they adopted,” Pickens told the supervisors. 

“In 2010,” he said, “it was OK to have a room with three patients that shared one bathroom. They changed those rules in 2016 that says you can only have a room with two patients who share one bathroom.

“We were initially under the impression that we would have to de-license, take those 120 beds off of our license. We have since had additional discussion and have determined that we are not going to de-license those 120.”

Pickens explained that every year California hospitals have to renew their license from the state and pay a fee for every licensed bed they plan to operate. He said they are in the process of submitting their annual relicensing applications now. 

“What that means is when CMS comes out, they will then have to make a determination; are they going to include those 120 beds that we’ve submitted and licensed for, they and the California Department of Public Health,” Pickens said. “So, both of them will have to make a decision; are they going to include those 120 beds in what they survey and what they certify in the event that we are successful?

“What that means is this is still an unsettled issue, but at least we are preserving our right and ability to have that full complement of beds by not de-licensing. So, I wanted to make sure you are aware that that is the route we’re taking right now regarding those beds,” he said.

“I want to thank you for keeping those 120 beds licensed,” District 9 Supervisor Hillary Ronen told Pickens. “That is a huge concern of mine. Not only do we have a board-and-care crisis – and it’s not just in the City; it’s all over the country – where it’s no longer possible for family-owned businesses to maintain board-and-cares; it’s just not affordable anymore. Losing 120 beds at Laguna is absolutely devastating. How cruel do you have to be to close down or even shrink the size of this facility? It continues to blow my mind.”

Adding to the troubles at Laguna Honda was an outbreak of COVID-19 in August, its biggest since the beginning of the pandemic; although Pickens reported they have most of it under control now. 

On Aug. 25, the hospital reached its highest case level of 55 COVID-positive cases, but when Pickens addressed the Board on Sept. 13, he reported this number had dropped down to eight. 

Pickens said they responded by introducing more stringent COVID-19 precautions, like requiring that visitors be tested onsite and found to be negative before they can come into the facility. They are also now requiring staff to only wear N-95 masks and protective goggles in the patient units. 

They also have a separate unit reserved just for COVID-positive patients so they can be quarantined.