Bid by S.F.'s largest nursing home to restore 120 beds rejected by federal regulators

San Francisco Chronicle​

3 days ago

San Francisco's largest skilled nursing home, Laguna Honda, will not be able to reinstate 120 beds — which would have improved capacity for such care in the rapidly aging city — after federal regulators this month denied the hospital's attempt to gain approval for the expansion.
The Centers for Medicare and Medicaid Services (CMS) turned down Laguna Honda's request to reinstate the beds, citing federal regulations that require nursing facilities certified after 2016 to limit residents to two per room. Reinstating the 120 beds would have meant Laguna Honda would have three residents in some of its rooms.
CMS can make an exception to this rule by granting nursing homes a waiver allowing them more than two residents per room if they can show it meets residents' needs and will not harm their health and safety.
Laguna Honda sought such a waiver in April, and was notified by CMS on July 7 that it was denied. In a letter to Laguna Honda leaders, CMS cited concerns about privacy, infection control and resident safety. It also cited hundreds of allegations of non-compliance, including allegations of abuse, neglect and resident rights violations since the hospital was recertified in 2023.
Laguna Honda leaders said this was a 'gross mischaracterization' and that only six of the 276 allegations of non-compliance resulted in a cited deficiency, and that for each deficiency, the hospital completed a plan of correction. Compared to other large nursing facilities in California, Laguna Honda ranks in the middle for reported incidents and below the median for deficiencies, they said.
'We are very disappointed,' said Roland Pickens, director of San Francisco Health Network, which is owned and operated by the San Francisco Department of Public Health and includes Laguna Honda.
Since 2010, Laguna Honda had 769 beds and housed three residents in some rooms, known as triples, because federal regulations allow that for nursing homes certified before 2016.
But in 2022, the hospital lost its Medicare certification after state inspectors identified moderate to very serious deficiencies at the facility, including many residents testing positive for narcotics. The inspection was launched in 2021 after two residents overdosed but survived.
During the process of regaining Medicare certification — a two-year saga that threatened to shut down the facility altogether — Laguna Honda had to decommission the triple rooms, reducing its skilled nursing beds from 769 to 649.
It regained Medicare certification in 2024, which means it must comply with the regulation that limits residents to two per room for facilities certified after 2016.
Laguna Honda then sought the waiver to add back the 120 beds, citing the critical need for skilled nursing care in San Francisco. The facility currently has about 550 residents.
Laguna Honda leaders said they strongly disagree with CMS's decision but will not appeal or seek litigation challenging it.
'Pursuing legal action would be costly, time consuming and unlikely to yield a timely or favorable result — especially given CMS's broad discretion and the current political climate,' the public health department said. 'In the face of ongoing federal and state threats to Medicaid funding, local health departments like SFDPH must focus on protecting the broader system of care.'