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San Francisco’s troubled Laguna Honda Hospital finally gets some good news

A shuttle departs from Laguna Honda Hospital and Rehabilitation Center in San Francisco on May 16, 2022. | Camille Cohen

Laguna Honda Hospital, a struggling San Francisco medical facility that faced a risk of closure, has been granted Medicaid recertification by the state, city officials said Wednesday.

Department of Public Health Director Grant Colfax informed city staff of the recertification in an email Wednesday.

The decision comes just days after the hospital applied for readmission into Medi-Cal, California’s implementation of the federal Medicaid program serving low-income people.

About 95% of Laguna Honda patients rely on Medi-Cal, said Dr. Teresa Palmer, a former doctor at Laguna Honda and an advocate for the facility.

“This is a great day for Laguna Honda, our staff and our residents,” said Colfax in an email to city staff. “This recertification provides relief to our residents and their families who can now be secure about the future of their care.”

In April 2022, a federal regulator stripped Medicare and Medicaid funding from Laguna Honda after a prior visit by state authorities uncovered deficiencies in sanitation and safety, among other issues.

City Attorney David Chiu later sued the federal government, which agreed to continue paying for patient care if the hospital demonstrated the ability to comply with regulations and made improvements. Since then, a series of short-term agreements have forestalled closure of the hospital.

Sometimes known as the “last alms house,” Laguna Honda serves hundreds of patients with complex medical issues, many of whom are low-income. The hospital represents more than 30% of all skilled nursing beds in San Francisco.

After being stripped of federal funding, the hospital was barred from readmitting new patients and was forced to relocate dozens of patients, some of whom died after being discharged.

“By working together, we have been able to resolve a critical situation at Laguna Honda Hospital and a decision that had put hundreds of vulnerable residents at risk and created anxiety and uncertainty for so many families,” Chiu said in a prepared statement.

Theresa Rutherford, president of SEIU 1021, which represents service employees who work at the hospital, said the victory cannot be overstated.

“It not only means that Laguna Honda’s doors will remain open, that our medically fragile patients will not be shipped elsewhere to their detriment, and that our members will keep their jobs,” Rutherford wrote in an emailed statement. “It also means that San Francisco will keep a vital healthcare institution that has been a critical part of our community, providing services no other local hospital offers, for over 150 years.”

Annie Gaus can be reached at

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