By Thomas K. Pendergast 

Laguna Honda Hospital got a break when San Francisco City Attorney David Chiu’s fight with federal and California State authorities halted the eviction of more than 600 patients on Medicare or Medicaid until next February. 

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

Beleaguered Laguna Honda Hospital recently got a break when San Francisco City Attorney David Chiu agreed with federal and California State authorities to put off evicting more than 600 patients on Medicare or Medicaid until next February. Photo by Michael Durand.

Since then, two lawsuits – including one filed by Chiu on behalf of the City and another by a separate organization – were filed with the United States District Court of Northern California to stop further patient transfers.  

A joint statement by the Centers for Medicare and Medicaid Services (CMS), the California Department of Public Health (CDPH) and Chiu announced a temporary freeze on transferring hundreds of patients. 

“This settlement will allow Laguna Honda to continue to receive Medicare and Medicaid payments while addressing the quality improvements needed to ensure resident health and safety,” they said in the statement. “As part of the settlement, CMS will extend Medicare and Medicaid payment for services through Nov. 13, 2023, contingent upon Laguna Honda meeting requirements aimed at making health and safety improvements at the facility. 

“During this period, Laguna Honda will continue to work on quality improvement efforts while aiming to reapply to participate in Medicare and/or Medicaid. Additionally, transfers and discharges of current residents will remain paused until Feb. 2, 2023, with a possibility of a further extension, if Laguna Honda complies with its obligations under the settlement agreement.

“The City will be submitting the settlement agreements in principle to the Health Commission and the Board of Supervisors of the City and County of San Francisco shortly, and the parties look forward to executing and implementing the agreement once board and mayoral approval has been secured.”

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 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.

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.

But there is bad news for the hospital as well. It might have to follow new rules wherein no more than two patients can share one bathroom, as opposed to three patients, like the old rules allowed. 

Unless there is a compromise on that, the hospital might have to shed 120 beds regardless, if it wants to renew its license for next year. Pickens said this is still an “unsettled issue.” 

Meanwhile, a separate lawsuit has been filed against officials at both the CMS and the CDPH by attorney Louise H. Renne and the Renne Public Law Group on behalf of four patients residing there.   

The lawsuit seeks an injunction or halt on further patient transfers and on “terminating funding to Laguna Honda until it can be demonstrated that there are sufficient Medicaid and Medicare beds available at other facilities in the San Francisco Bay Area that can provide residents a comparable level of care; and/or in the alternative, enjoin defendants from requiring the relocation or discharge of residents during the recertification process; and/or in the alternative, enjoin defendants from enforcing the existing relocation plan and the Nov. 13 deadline until all residents can be transferred to a facility in the San Francisco Bay Area that can properly care for their conditions; and/or in the alternative, enjoin defendants terminating funding to Laguna Honda as long as plaintiffs and class members reside in the facility.”

“We are arguing that there is absolutely no reason why 700 residents of Laguna Honda need to be discharged, particularly when there’s no place to put them,” Renne said. “The trauma to the residents and their families is huge. They’re all wondering what’s going to happen to them.”

And despite the agreement that Laguna Honda would be fully funded until November 2023, the hospital is still required to put together a closure plan, with the residents being discharged starting in February. 

“That’s craziness,” she said. “They’re just holding the residents hostage, for what? The residents and their families and loved ones are very upset about all of this. It is cruel and unusual punishment for the federal and state government to be holding Laguna Honda residents as hostages in their battle.” 

Renne has also asked the court for “class certification,” which means that, rather than filing on behalf of individual patients, they can file on behalf of all of the residents of Laguna Honda. 

“Some of them, we know, were discharged to homeless shelters; just outrageous,” she said. 

In the preliminary injunction, it is stated that transfer trauma is a medically documented event, also known as “relocation stress.” 

“Right now, we are focused simply and solely on stopping the discharge.”

After more than 50 transfers already, there are about 620 residents left in the hospital but “even then, there are no places (in other facilities) for people who are on Medicaid, which is what most people at Laguna Honda are. Laguna Honda is the only publicly owned facility in the country now. Most others have gone by the wayside,” Renne said.

“All of the others are privately owned,” she pointed out. “And because they’re privately owned, they tend to take wealthier patients rather than poor patients. 

“Say a facility has 12 beds; of the 12 beds only one might be a Medicaid bed for a Medicaid person. So that’s why it’s not realistic to begin to believe that you would be able to find a spot for over 600 people. It’s just not possible,” Renne said.