San Francisco sues federal government over forced Laguna Honda Hospital closure

The City’s action dovetails with a class action lawsuit brought on behalf of Laguna Honda patients and families by the Renne Public Law Group

SAN FRANCISCO (August 4, 2022) — San Francisco City Attorney David Chiu and former City Attorney Louise Renne announced today that they filed a pair of lawsuits over the federal government’s decision to cut off federal funding to Laguna Honda Hospital & Rehabilitation Center and mandate that the facility transfer or discharge all patients by September 13, 2022.

City Attorney David Chiu speaks at press conference regarding lawsuits to halt the federal government’s closure of the decertified Laguna Honda hospital

The City’s lawsuit against the U.S. Department of Health and Human Services (HHS) and Health and Human Services Secretary Xavier Becerra alleges that the Centers for Medicare & Medicaid Services (CMS), which operates under HHS, forced the City to implement an unworkable closure and transfer plan that denies the City due process and puts Laguna Honda patients at risk. The complaint lays out how CMS imposed an arbitrary September 13 deadline to transfer Laguna Honda’s patients and has denied the City due process as the facility is required to close well before the City’s administrative appeals can be decided—appeals that would render the transfers unnecessary. The lawsuit seeks declaratory and injunctive relief to eliminate the September 13 deadline and extend federal funding to Laguna Honda at least until the appeals can be decided and all patients can be safely transferred or discharged.

Similarly, Louise Renne, founding partner at the Renne Public Law Group (RPLG) and former San Francisco City Attorney, announced that she has filed a class action lawsuit against the state and federal government on behalf of Laguna Honda patients and families. The RPLG complaint alleges that the closure of Laguna Honda and rushed transfer process violate the Americans with Disabilities Act and deny patients and their families substantive and procedural due process. The RPLG lawsuit is seeking declaratory and injunctive relief to continue federal funding to Laguna Honda and to stop patient transfers and discharges.

“The federal government has put Laguna Honda and our City in an impossible situation,” said City Attorney David Chiu. “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.”

“We are working hard to address issues that have been raised at Laguna Honda, and that important work will continue,” said Mayor London N. Breed. “But closing this facility and forcing residents and families to go through the trauma of transfers should not be part of that process. This facility provides care and support for some of the most vulnerable people in our City, and that support must continue to keep them healthy and safe.”

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

Laguna Honda is a 150-year-old skilled nursing facility run by the San Francisco Department of Public Health (SFDPH) that serves over 600 of San Francisco’s most vulnerable residents. Patients who reside at Laguna Honda often have complex physical and mental health needs. Despite significant challenges and a large patient population, Laguna Honda was recognized by the California Association of Public Hospitals and Health Systems for its exemplary response to the COVID-19 pandemic and its low infection rate compared to other skilled nursing facilities.

Because 98 percent of Laguna Honda’s patients are Medicare or Medicaid beneficiaries, Laguna Honda relies on federal and state funding to operate the hospital. In order to receive this funding, health care facilities must have Medicare and Medicaid provider agreements in place with CMS.

In July 2021, Laguna Honda self-reported two non-fatal overdoses to the California Department of Public Health (CDPH), per standard Laguna Honda policy and federal regulations. That report triggered a series of inspections by CDPH and CMS. Laguna Honda was cited for deficiencies in care related to cigarette lighters and drug paraphernalia found on campus, infection prevention and control, as well as two missed doses of a medication.

Despite Laguna Honda’s work to correct the cited deficiencies, CMS terminated Laguna Honda’s Medicare and Medicaid provider agreements as a result of the deficiencies. The City has appealed that decision, and Laguna Honda intends to apply for recertification in both Medicare and Medicaid with CMS. However, to continue federal funding, Laguna Honda was forced to prepare a closure and transfer plan.

SFDPH proposed a number of options based on its assessment of the Laguna Honda patient population and the known lack of skilled nursing beds that would have lessened the impact on existing patients, including a recertification process that would not require relocating existing patients; an 18-month transfer plan that would give appropriate time to find alternative care and living arrangements for all patients; and a phased transfer process wherein the most vulnerable patients would be transferred last.

On May 13, 2022, CMS rejected all of those options and insisted on an unreasonable deadline of September 13, 2022, giving Laguna Honda just four months before federal funding would be cut off, the facility would be forced to close, and close to 700 patients would have to be transferred or discharged. There is an acute shortage of skilled nursing beds throughout California and the Bay Area, and it is simply impossible to find skilled nursing beds for all of Laguna Honda’s patients within the timeframe mandated by CMS.

Additionally, the City filed three administrative appeals contesting the CMS decision to terminate its contract with Laguna Honda. Those administrative appeals will not be decided until well after the September 13 deadline to close the facility, effectively denying the City, Laguna Honda, and patients the due process they are owed.

Thus far, nine patients who have been transferred or discharged from Laguna Honda have died days or weeks after transfer or discharge, underscoring the incredibly high stakes of moving such a fragile population of people in a rushed manner. The federal government, through CDPH, have temporarily paused patient transfers, but the September 13 deadline remains, giving the City even less time to complete this daunting and ill-advised process.

The City’s lawsuit was filed August 3. The case is City and County of San Francisco v. United States Department of Health and Human Services, et al., U.S. District Court for the Northern District of California, No. 3:22-CV-4500.

RPLG’s class action lawsuit was also filed on August 3. The case is D.B., et al. v. Chiquita Brooks-Lasure, et al., U.S. District Court for the Northern District of California, No. 3:22-CV-4501.

The complaints and associated documents can be found here:

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