Laguna Honda says CMS terminated participation; city mobilizes to regain certification

Michael Phillips, chief executive of Laguna Honda Hospital, told the San Francisco Health Commission on April 19 that the hospital's participation agreement with the Centers for Medicare & Medicaid Services was terminated after state revisits found deficiencies following a self-reported incident.

"Laguna Honda is not going anywhere," Phillips said, adding that the hospital will continue to provide care and that the Department of Public Health (DPH) is making resources available to support a comprehensive plan to regain certification. Phillips traced the regulatory sequence to two self-reported, non-fatal overdoses in July 2021 that prompted an extended survey. During revisits in January and March, surveyors found noncompliance in areas including resident assessments, care plans, pharmacy services and infection control, Phillips said.

The finding that led to termination, Phillips said, did not relate to illicit substances and would not ordinarily prompt decertification. "These findings in and of themselves would normally not warrant termination," he said, but explained the hospital was on a six-month regulatory track to regain compliance and the timing of the revisits left insufficient room to remediate additional deficiencies.

Commissioners said they appreciated the staff's efforts and pressed DPH and Laguna Honda leadership on whether survey scheduling and scoring adequately account for the size and complexity of a 700-bed facility. Commissioner Guillermo asked whether a weighted survey mechanism exists for larger institutions; Phillips replied that "that does not occur" and that facilities are held to the same standards regardless of size.

Vice President Dr. Lori Green and others asked about whether the hospital had submitted corrective-action plans and whether those were accepted. Phillips said plans had been implemented and accepted but that an additional, later finding placed the hospital out of compliance in the six-month window.

DPH Director Grant Colfax told the commission the city will continue to support Laguna Honda's effort to correct findings and pursue recertification and that the commission will receive ongoing updates. The hospital estimated the recertification process could take about six months to a year and said it will need a comprehensive plan and sustained resources to succeed.

Next steps: Laguna Honda and the Department of Public Health will pursue corrective actions and recertification; the Health Commission will receive follow-up reports.