As a regulatory crisis engulfs Laguna Honda Hospital and Rehabilitation Center, officials are preparing to cut 120 beds from the skilled nursing facility, according to a letter sent to hospital staff and obtained by The Examiner.
The setback comes as The City already is struggling with a well-documented shortage of skilled nursing beds and an ongoing regulatory clampdown that threatens to close the hospital and displace more than 600 medically fragile San Franciscans.
Staff at Laguna Honda were notified on June 30 that the hospital will go from 769 to 649 beds due to changes in federal guidance on long-term care facilities set by the Centers for Medicare & Medicaid Services, the federal agency overseeing the hospital’s simultaneous ongoing effort to regain certification.
The changes urge skilled nursing facilities across the country to have no more than two patients per room in an effort to increase safety and quality of living for residents.
There are currently 623 people living at Laguna Honda, which has not been at full capacity since prior to the pandemic.
“In preparation for recertification, Laguna Honda is required to internally move 90 patients to different rooms to meet the CMS regulations,” a spokesperson for Laguna Honda said in an email. “Laguna Honda leadership is initiating a process to ensure this process is the least disruptive to patients and the units. All internal moves will follow a set protocol that respects the patient’s needs and their belongings.”
Without any plans to offset the bed cuts in some other way, such as opening up 120 skilled nursing beds elsewhere, The City faces an even bigger challenge to meet the needs of its aging population. The availability of affordable nursing homes and board-and-care facilities in San Francisco has plummeted while the cost of living has gone up.
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The hospital stopped admitting new patients earlier this year after federal regulators decertified the facility following several inspections between October and April found the hospital was out of compliance with several safety issues. Laguna Honda is still licensed, but federal regulators terminated its participation in Medi-Cal and Medicaid. The vast majority of patients and residents at Laguna Honda are low-income and losing the reimbursement in government-subsidized health care plans puts the facility at risk of closing as soon as September.
While preparing for visits later this year that could recertify the facility, the hospital has started discharging patients in the meantime. To continue receiving federal funding throughout the recertification process, federal regulators at CMS are requiring Laguna Honda simultaneously implement a closure plan that attempts to discharge patients ahead of the possible closure.
That process has caused confusion and anxiety among residents and their families due to a lack of available options in San Francisco for patients to safely transfer. The hospital had 681 patients as of mid-May when discharges were initiated, compared with 623 living there as of Tuesday. That decrease includes at least 27 transfers to skilled nursing facilities primarily in San Mateo County and 12 discharges back to the community, according to data reported by the hospital.
“This is not an institution that’s nice to have, it is fundamental. It can’t be closed. It must be here to do the purpose it was built, to serve the community and the most vulnerable,” said Teresa Rutherford, a former Laguna Honda certified nursing assistant and representative for the union that represents them, SEIU 1021.
No layoffs are anticipated to follow the reduction in beds, according to Roland Pickens, interim CEO of Laguna Honda.
In addition to removing beds, the letter to staff shows Laguna Honda is piloting a management structure that includes increasing leadership roles on each unit and integrating more employee training.
“While this change has financial, operational and staffing implications, we have approximately 100 budgeted vacant positions which we are working to fill. Before any permanent positions are impacted we will reduce the use of registry, temporary staffing and overtime to manage changes in our staffing model,” the letter sent to staff reads.
