A plan to expand Laguna Honda’s patient population space by 120 beds has been denied by Medicare and Medicaid administrators, as the facility still has some reputational fallout from two patient drug overdoses in 2022.  

SF’s Laguna Honda Hospital is the only remaining city-owned skilled nursing facility in the US, and also the largest nursing home in San Francisco. Hospital officials wanted it to get even larger — or rather, wanted to return it to its pre-2022 size.

The place lost a number of residents after two patients overdosed on illegal drugs that they probably scored on unsupervised leave in 2022, which led to Medicare and Medicaid officials decertifying the facility and defunding Laguna Honda by about $200 million. The facility was then forced to move many patients elsewhere, and in that process, 12 of those patients died. But amidst this unpleasantness, the hospital pulled off an effective remediation plan, and got its certification and funding back.

So as mentioned, the hospital had hoped to expand back to the number of patients it had before the whole decertification mess, and made a request to expand from its current 649 beds to 769 beds. But the Chronicle reports that the federal Centers for Medicare and Medicaid Services (CMS)  have denied Laguna Honda the expansion request, for bureaucratic reasons that effectively continue to punish Laguna Honda over the earlier overdose and decertification incidents.    

Laguna Honda had hoped to reinstate its “triple rooms,” that is, rooms with three patient beds per room. CMS rules say that hospitals can only have triple rooms if they were certified before 2016. Laguna Honda was certified before 2016, but lost that certification in 2022, and was recertified in 2024.  

By federal rules, that puts Laguna Honda in the "certified after 2016” category, and the feds say that means they cannot have triple rooms.

“We are very disappointed,” said Roland Pickens, who stepped in as interim CEO and steered the hospital back to fully certified status, speaking the Chronicle. He was particularly frustrated that the feds said the hospital had 276 incidents of non-compliance with federal rules since being recertified, though hospital officials argue this is a “gross mischaracterization” because they only received six actual citations.

That said, the hospital does not plan to appeal the decision.

“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 SF Department of Public Health (SFDPH) said in a statement to the Chronicle. “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.”

All of this said, there are currently only around 550 patients at Laguna Honda Hospital, so it's not like the place is at capacity. But you may have seen the Chronicle’s recent series of articles about the Bay Area’s rapidly aging population, so there may be greater need for nursing-home beds in the future.

Related: Laguna Honda Hospital Gets Reinstated by Medi-Cal, in Massive Win for the Facility [SFist]

Image: Pi.1415926535 via Wikimedia Commons