By Thomas K. Pendergast

Although technically it will remain operational, San Francisco’s Laguna Honda Hospital faces the daunting task of relocating nearly 700 low-income patients to other hospitals by Sept. 15 after a federal oversight agency decertified it this past April.

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

The CMS has committed to giving the hospital financial help in relocating approximately 670 patients for four months, with possibly a two-month extension, provided that all these most vulnerable patients are relocated by mid-September.

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.

“We have a daunting but a doable task ahead of us to get Laguna Honda Hospital back in compliance, so we can serve this beautiful and unique institution,” District 7 Supervisor Myra Melgar said at a San Francisco Board of Supervisors meeting in June. “It is unfathomable to foresee any other outcome for the lives that depend and will depend on Laguna Honda for care.”

At the time of Melgar’s comments, six patients had already either been discharged or relocated, but a hospital official said beds in other facilities that will accept Medicare or Medicaid patients still need to be arranged for the rest. 

“That may sound like an easy process, but it’s not,” Pickens told the supervisors. “Healthcare is a team sport. Each of those patients has to undergo a very thorough, multidisciplinary assessment. The nurses, the social workers, the dieticians, the activity therapists, the physicians; everyone who is involved in each of those patients’ care has to come together, meet collectively and assess what is the current level of functioning of each of the Laguna residents.

“Six out of 670 is not a big number. Thus, the challenge that we have ahead of us,” he said. “Not every skilled nursing facility has the comprehensive programs that Laguna does. We don’t have any matches on the books right now. There are about 20 in process that look, preliminarily, like they’re going to make a match but again, this is an interim process where often times they will ask Laguna Honda for more information in order to make a final decision.”

The patients themselves can also oppose being moved because they have the right to appeal a discharge at a hearing. 

Pickens explained that there are approximately 2,000 skilled nursing facilities throughout California. Although 15 of those are in San Francisco, none of their available beds available at the time were reserved for patients with Medicare or Medicaid coverage. 

At other facilities, many have available beds in the “single-to-low double digits across the state,” he said. “And that’s because, for many skilled nursing facility providers, they limit the number of beds that they have by financial class. And so, there are very few beds available for patients with Medicaid and Medicare and thus our dilemma.”

“This is some Kafkaesque nonsense,” District 8 Supervisor Rafael Mandelman said. “The state and the federal government are coming after San Francisco, which is providing 700 beds to care for people that the state and federal government have abandoned. This is mind boggling to me.”

“This is outrageous and infuriating,” he said. “Seven hundred patients out of Laguna by Sept. 15 is what the federal government thinks is a good idea.” 

“We absolutely cannot allow this incredibly important facility for our most vulnerable residents to close,” District 4 Supervisor Gordon Mar said. “But I did really want to express even more concern about the patient relocation and transfer plan … because this requirement by CMS, that we somehow transfer all the patients out by mid-September, just seems incredibly punitive and unreasonable and cruel.”

“The pace is picking up a little bit,” Pickens replied. “The first couple of weeks there was one discharge. There were four discharges last week. But still, we are way behind in meeting that goal of having all the patients placed.”

“It just seems the timelines don’t really align because, from what you describe, we’re supposed to transfer everyone out by mid-September and then recertification won’t happen until December,” Mar said.

“At the earliest, that’s the target,” Pickens responded. “You’re correct, those are two incongruent ideas but yet that’s where we find ourselves.”

District 1 Supervisor Connie Chan noted that, even if beds are found for all the patients, it is unlikely they will be in San Francisco County or perhaps even in the Bay Area. 

“Out of county, it could be 30 miles out of county,” Chan said. “It could be 60 miles out of county. It could be 300 miles out of county. That is a significant difference, especially for families wanting to visit their loved ones and definitely for our patients.”

Pickens said it costs about half a million dollars each day to run the hospital, which comes to approximately $15 million per month, most of which would be covered by the CMS until sometime in December with the extension, that is if the patients can be relocated by the deadline. 

District 11 Ahsha Safai, who sits on the Board’s Budget and Finance Committee, commented on the ability of the City to make up the difference should the hospital fail to meet that deadline.

“There are certain reserves that are available, but it’s certainly not sustainable to believe that $15 million a month, spread out over an annual basis, that we would have anywhere near that type of money,” Safai said. “So that, in and of itself, would necessitate a winding down of the patients in that facility if we were not able to get reimbursement from the federal government. I don’t know where that money would come from.”

“The idea that the path to continuing to provide these critical services for the most vulnerable people is to kick them all out so that we can bring them all back is absolutely bonkers,” District 5 Supervisor Dean Preston said. “It makes absolutely no sense and there is no justifiable reason to kick people out of a skilled nursing facility in order to justify why you can bring them back into a skilled nursing facility. It does not take a genius to figure out that that is not a good structure for discussion. Where people stay in place while the issues are being worked out is what we need.

“And let’s be real,” he said. “Some of these folks … even if this is done perfectly, the shock of moving facilities for this population will kill some of these people and it’s unconscionable.”