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San Francisco, patients sue to halt imminent closure of 150-year-old hospital

State and federal health officials ordered the Laguna Honda skilled nursing facility shuttered for providing substandard care.

SAN FRANCISCO (CN) — Seeking to stop state and federal public health authorities from shuttering a 150-year-old hospital housing nearly 700 vulnerable patients, current and former San Francisco city attorneys have filed tandem federal lawsuits they hope will keep residents who have nowhere else to go from being expelled.

The federal Centers for Medicare and Medicaid Services and the California Department of Public Health ordered Laguna Honda Hospital and Rehabilitation Center to close and relocate all patients by Sept. 13.

Former San Francisco City Attorney Louise Renne, now with Public Law Group, says that’s not enough time. “This is a case of tragic proportions,” says the class action she filed on behalf of the patients. “They must go, no matter their medical condition, or financial or social safety net. Some have already become homeless. Eight residents have died following their relocation.”

In a statement, Renne said, “For over 150 years, San Franciscans have relied on Laguna Honda to provide critical care to our most vulnerable. We simply cannot allow Laguna Honda to close. The actions of CMS and the California Department of Health are illegal, unnecessary and cruel.”

The hospital, which first opened in 1866 as an almshouse for the poor, now serves as skilled nursing facility for patients with dementia, Alzheimer’s disease, or severe traumatic injuries. One 49-year-old patient, identified in the lawsuit as John Doe 1, suffers from a brain injury, short-term memory loss, depression, dementia and compulsive behavior. He has lived at Laguna Honda for 17 years and his 73-year-old mother fears that his outbursts could make him the target of aggression from other residents if he is transferred somewhere else.

Another 86-year-old dementia patient, identified as Jane Doe 1, has late-stage Alzheimer’s and was set to be moved July 15. Her family asked the hospital to delay the move because of significant staffing issues at the new facility. “A transfer to an insufficient facility could be fatal for her,” the complaint says.

According to the class action suit, only 56 of 686 patients had been transferred or discharged “due to the difficulty of finding adequate beds" as of July 17.

The health agencies’ “rapid relocation” plan anticipates that patients will inevitably have to be placed in facilities outside the Bay Area and far from their families; including Northern California, the Central Valley, Southern California, and even to other states.

Laguna Honda relies on state and federal funding since most of the patients are on Medicare or Medicaid, and is being required to recertify as a new hospital with fewer patients.

“When can the hospital be recertified? Will the hospital remain empty in the meantime? Can its former residents move back? If so, how and under what circumstances? These questions are unanswered,” the patients say in their complaint. “In the meantime, relocation strikes terror in the hearts of the residents and their families as they face the prospect of eviction. Where will they go? Will their new facility be equipped to treat them? Will families be able to continue to visit? As it is, Laguna Honda represents the bulk of the available skilled nursing beds in San Francisco. There are few, if any, other alternatives in the Bay Area or even the State of California. To add to the urgency, most private facilities limit available beds for the poor, preferring a wealthier clientele.”

According to the city’s complaint, the hospital found itself under the bureaucratic microscope in July 2021 when it self-reported two overdoses from illicit drugs. The patients were taken to the emergency room before returning to Laguna Honda, but the reports brought visits from the California Department of Public Health, which found the hospital had provided substandard care because it failed to confiscate all illicit drugs and contraband like cigarette lighters.

The findings caused the hospital to fall out of compliance with Medicare's conditions of participation.

Another visit from state health officials on Jan. 21, 2022 turned up three more patients with illicit drugs and contraband that staff failed to seize. A revisit on March 16 led to more findings. A visit in April identified issues with two missed doses of medication and hygiene, which led to CMS almost immediately terminating its provider agreements.

Current San Francisco City Attorney David Chiu said that despite the city's three administrative appeals, the last one filed on May 28, state and federal health officials are insisting on an “unreasonable” closure deadline of Sept. 13.

Chiu pleaded for an extension in an urgent letter sent to counsel for the Department of Health and Human Services, which oversees CMS.

In the letter, he said the appeals process would likely not conclude before Nov. 13. “If CMS terminates funding and requires Laguna Honda to complete the transfer or discharge of its affected patients before Laguna Honda has the opportunity to be heard, Laguna Honda’s due process rights will be violated,” he wrote.

Chiu’s spokesperson Jen Kwart confirmed Thursday that his office did not receive a response to the letter in writing.

“The federal government has put both the city and Laguna hospital in an impossible situation,” Chiu said in a statement Thursday.

“As the final safety net for many of our most vulnerable San Franciscans, Laguna Honda serves too critical a need to be closed due to an arbitrary, bureaucratic decision. The city has been forced into an unworkable closure and transfer plan that has done far more harm than good. Hundreds of patients’ lives are stake. We are taking legal action today in the hope that a court will compel the federal government to exercise compassion and common sense.”

The federal Centers for Medicare and Medicaid Services said it does not comment on a matter in litigation. In an email, a spokesperson for the state public health department said "CDPH is analyzing the pending litigation and does not have a comment at this time. Our top priority remains the health and safety of the residents at Laguna Honda."

Both the patients and the city want a judge to block the Sept. 13 deadline and order Medicare and Medicaid to stop pulling funding until the administrative appeals are resolved and all patients have been safely transferred or discharged. The patients have requested a jury trial.

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