Laguna Honda update: Department of Public Health outlines recertification plan after CMS decertification

The Planning Commission received the Laguna Honda institutional master plan (IMP) on Aug. 25 and a separate status update from the Department of Public Health on the hospital's Medicare and Medicaid certification.

Laura Aiello of planning staff summarized the IMP: the campus is roughly 62 acres on Twin Peaks, designated a category A historic resource in the Laguna Honda Historic District, and includes recent work such as the 2010 replacement hospital and a 2019 community trail. The IMP documents past projects and outlines future projects including retrofitting M and O wings for administrative use (targeted completion 2024) and a proposed senior-living facility to be developed by Mercy Housing (construction not expected before 2025).

Greg Wagner, chief operating officer of DPH, told the commission that in late 2021 and early 2022 Laguna Honda reported two nonfatal overdoses to CMS, which triggered a survey that identified additional regulatory issues. "The Federal government notified us in April of 2022 that they were terminating Laguna Honda Hospital's contract with Medicare and Medicaid," Wagner said. He said DPH implemented an aggressive corrective-action program, extensive staff training and a team of experts to pursue recertification, which he expected would proceed through the fall and early winter.

Wagner said CMS had required a patient transfer plan at the time of decertification, but that requirement was suspended and patients were no longer being transferred involuntarily. He emphasized the hospital remained in operation and that roughly 600 patients continued to receive care while the recertification work proceeds.

Staff and commissioners also discussed IMP schedule expectations: the IMP satisfies Planning Code Section 304.5 requirements for a public hearing and documentation of existing and projected projects; staff noted updates are to occur every 2 years with a full IMP roughly every 10 years.

Commissioners requested periodic updates about the M and O retrofit and the senior-housing project; DPH said it would provide updates as requested and work with the department on a schedule for additional briefings.