By Thomas K. Pendergast

Although Laguna Honda Hospital has avoided a shutdown and been approved for recertification to continue state-funded Medicaid funding of patients, it still has another major hurdle to jump as renewal of federal-funded Medicare resources remains uncertain.

“We’re not quite there yet,” said District 7 Supervisor Myrna Melgar at a recent San Francisco Board of Supervisors meeting. Melgar represents the area where the hospital is located.

“Because this is of such high importance for the City and because we are not yet at the point where we can take (patient) transfers in nor have resolved things with Medicare, I thought it would be really important for everybody to understand what’s going on, be on the same page,” Melgar said.

The 157-year-old hospital, located on a 62-acre campus, 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 Centers for Medicare and Medicaid Services (CMS) decertified it in April 2022 because of deficiencies in safety protocols, improper hygiene practices by the staff and two nearly fatal overdoses from illegal drugs brought into the hospital by patients.

According to Interim CEO Roland Pickens, there are approximately 2,000 skilled nursing facilities throughout California. Although 15 of those are in San Francisco, none of their available beds were reserved for patients with Medicare or Medicaid coverage. So, finding new beds for hundreds of patients was a daunting task.

In October of 2022 Laguna Honda Hospital got a break when San Francisco City Attorney David Chiu’s fight with federal and state authorities produced a settlement that temporarily halted the eviction of more than 600 patients on Medicare or Medicaid.

Initially, the hospital was supposed to have moved out these patients the previous month by transferring them to other healthcare facilities, but in July 2022, federal and state regulators paused all patient transfers and discharges from the hospital after 11 patients died following their removal from the facility.

At the Sept. 26 meeting of the SF Board of Supervisors, Pickens told the Board that the hospital administration and staff are working toward recertification in the Medicare program.

“We are now preparing for a thorough and rigorous facility-wide full CMS Medicare certification that can come at any time,” he said. “We applied for Medicare recertification because of the tremendous progress we’ve made over the last 18 months and are confident that we’re ready to show, again, that we can and do consistently meet the highest standards for patient care, safety and daily operations.

“Because Laguna has been recertified in the Medicaid provider program, we are so fortunate and are appreciative of the fact that those involuntary discharges that were scheduled to take effect on Sept. 19 will no longer move forward,” he explained. “This was a great relief to our entire Laguna Honda community and again, thanks to all of you and many others who helped make this achievement possible.”

Pickens said the hospital will not begin admitting new patients until after they determine that the improvements they have made over the last few months are sustained for the long term.

“It’s crucial that we wait until this upcoming, full Medicare survey is complete to see what their findings are and then what improvements we will need to make based upon those findings in the form of a plan of correction,” he said. That is the standard process whenever there’s a survey. There are inherently findings and so it’s prudent upon us to get those finding and then make whatever modifications that need to be made.”

Pickens also introduced his replacement as the hospital’s new CEO, Sandra Simon.

“I’ve spent my whole career in skilled nursing,” Simon told the Board. “When I was in college I was working, like many of us, in fast food and my roommate said, ‘Hey, we’re hiring nursing assistants.’ The industry, as you know, has always been short (of) nursing (staff), even back then.

“And so, starting as a nursing assistant, I decided to change my degree to a bachelor’s in gerontology. It was a new program back then. And I pursued an MBA (Master’s in Business Administration) in health care and really worked my way through various levels of skilled nursing organization activities and social services.”

She said she always admired Laguna Honda and wanted to work there.

“I’m just thrilled to be able to come and join this team and help the City and help this icon be the new Laguna Honda Hospital,” she said.

Dr. Theresa Palmer, who once worked at the hospital and has long been a critic of the way the hospital was run before it lost CMS certification, addressed the Board.

“There’s a very good reason that the federal government decertified it,” Palmer said. “It was badly managed, and we’ve got to prevent this from happening again.

“And I really think that the Board of Supervisors should have a meeting of the whole about this every three months until it’s fully back in operation and readmitting. Nursing home residents that have had to find facilities out of county … should have priority to come back,” she said.