San Francisco officials describe path to CMS recertification for Laguna Honda amid settlement that extends payments through Nov. 2023

Acting CEO Roland Pickens told the San Francisco Health Commission on Oct. 18 that a tentative settlement with the Centers for Medicare and Medicaid Services and the California Department of Public Health will keep federal payments flowing to Laguna Honda Hospital through Nov. 13, 2023, and buy the institution additional time to prepare for full recertification.

"CMS has agreed to continue paying for resident care at Laguna until November thirteenth of 2023," Pickens said during the presentation. He told commissioners the agreement also continues a pause on involuntary discharges and transfers until Feb. 2, 2023, though CMS could extend that pause depending on Laguna Honda’s progress toward meeting conditions of participation.

Pickens said the hospital has mounted a broad corrective effort since CMS terminated Laguna Honda’s participation in Medicare and Medicaid in April 2022 after earlier incidents and reviews. He described two retained consultant teams — Health Services Advisory Group (HSAG) and Health Management Associates (HMA) — and a set of key performance indicators tracked weekly across neighborhoods. Pickens said the KPI program draws on ‘‘over 6,000 weekly data points’’ including direct observations and medical‑record reviews to monitor readiness.

Staff reported progress on three problem areas cited in the April survey: environment of care (reports of 97–98% readiness), hand hygiene (98–100% recent compliance), and infection prevention and control (about 92% on the latest report). Pickens also said that of 101 tags identified in an internal mock survey, 100 have plans of correction and 22 have been validated as corrected; 79 remain in monitoring.

Pickens described operational steps the hospital has taken — from updating policies on herbal supplements to instituting huddle boards and weekly learning bulletins — and said CMS will conduct on‑site surveys every 90 days under the settlement, with the first expected no later than January 2023. He added that CMS has designated HSAG as the settlement’s quality improvement expert who will remain on site.

The presentation addressed two recurring public concerns: beds that currently share a single bathroom among three patients (so‑called "triplet beds") and the hospital’s kitchen renovation. Pickens said the facility presently meets the CMS expectation of no more than two residents per bathroom because census has fallen, but the city will retain the current licensed bed mix and work with CMS on certification for those beds at recertification. On the kitchen, Pickens said CDPH indicated interim mitigation steps would allow recertification without a full renovation before the visit.

Public callers and several commissioners pressed city leaders on bed preservation and transparency. Patrick Monette Shaw, a frequent public speaker on Laguna Honda matters, said the tentative settlement ‘‘may push recertification 13 more months’’ and called the agreement a ‘‘smoky backroom political deal’’ for dropping litigation; he urged restoration of the 120 beds at issue. Retired Laguna Honda geriatrician Dr. Teresa Palmer urged the commission to resist closure and to pursue further litigation if necessary to preserve beds and residents’ right of return.

After the public comment period the commission moved into closed session on the Laguna Honda matter. When the body reconvened in open session it recorded two votes: first, a vote not to disclose portions of the closed session discussion; second, a recorded roll‑call vote to report that the commission in closed session had approved the city attorney’s recommendation that the Board of Supervisors be asked to approve the Laguna Honda settlement. The commission’s recorded votes were taken on the public record.

Next steps outlined by staff include the 90‑day on‑site surveys by CMS or CDPH, ongoing validation of plans of correction, and continued use of the hospital’s KPI dashboards and consultant recommendations as Laguna prepares to apply for recertification as soon as it meets CMS conditions. The settlement and any final agreement will require approval by the mayor and the Board of Supervisors before it takes full effect.