Following a presentation on recertification strategies by hospital officials, the San Francisco Board of Supervisors approved a settlement that will resume federal funding for the Laguna Honda Hospital and Rehabilitation Center.

In the meeting Tuesday, Laguna Honda interim CEO Roland Pickens laid out the agreement that local, state and federal officials reached in October.

The Centers for Medicare and Medicaid Services will fund the hospital until November of next year and halt the discharge and transfer process of its 600-plus patients, many whom have complex medical conditions, until February.

In exchange, hospital officials have agreed to improve health and safety conditions and work to reapply for long-term federal funding. The discharge pause may be extended depending on their progress.

Laguna Honda lost its Medicare and Medicaid provider agreements in April after regulators cited safety concerns, which resulted in financial losses for the hospital’s $200 million annual budget.

City Attorney David Chiu filed a lawsuit against the U.S. Department of Health and Human Services after regulators demanded that the hospital move all of its patients out of the facility by September. Chiu said the mandate was “unworkable,” that the city was “denied due process” and that the mandate ultimately was dangerous for the patients.

The lawsuit also alleged that nine people shortly died after moving to other service providers.

Laguna Honda lost its Medicare and Medicaid provider agreements in April after state and federal regulators cited safety concerns, including drug paraphernalia, lack of infection prevention and control and missed doses of medication. This meant an enormous loss for the hospital, which mostly depends on funds from CMS to sustain its $200 million annual budget.

Pickens said that since the April decertification, hospital officials immediately began working with two consulting experts to identify long- and short-term fixes that led to the violations, called a root-cause analysis. The next step is to make a roadmap to finalize the target date for applying for federal funding again.

Corrective measures

A preliminary mock survey completed in July also helped officials identify 101 deficiencies related to federal standards and guidelines, all of which have since implemented their own action plan to correct the mistakes, according to Pickens. The goal is to have all correction action plans fully completed by the end of November.

“We are really in a great position thanks to all the work of the Laguna staff working with those consultants,” Pickens said at Tuesday’s meeting.

Consultants have also been closely monitoring to ensure staff are consistently meeting a list of prioritized standards — things like responding to call lights quickly, keeping hands clean and securing medication carts appropriately. There are a total of over 6,000 individual data points that consultants are collecting on a weekly basis, Pickens said.

He said interactions between staff and observers was “a little rocky at first,” as staff did not appreciate constantly being monitored, but real-time teaching has turned into a collaborative, welcoming process.

“The observers are actually noting that staff are eager to talk to them, which is a good thing because when CMS comes to do their survey, they will be talking directly with our staff, and we want staff to have a level of comfort and familiarity and talking with surveyors,” Pickens said.

Hospital officials are also meeting with union partners three times a week and collaborating with the California Association of Health Facilities to learn best leadership practices from other nursing homes.

“We are putting in fixes for the long-term success of Laguna,” Pickens said. “We are not about doing any kind of quick Band-Aid. None of us want to ever be in this position again.”