Laguna Honda CEO reports mock CMS survey, outreach and slow admissions increase as staff bid begins

Laguna Honda Hospital and Rehabilitation's executive team updated the San Francisco Health Commission on facility operations, mock survey activity, admissions and workforce changes, saying a second unannounced mock survey began the morning of the meeting and that the hospital is pursuing regulatory and state pathways to restore 120 beds that had been decommissioned under recent CMS rules.

"We are officially in mock survey as of this morning," said Deltar Sadu, Laguna Honda nursing‑home administrator and chief executive officer, noting the hospital is working with HSAG as a CMS regulatory partner and that the mock survey is unannounced to better mimic a real survey.

Why it matters: Laguna Honda is a large safety‑net skilled nursing facility for San Francisco; the hospital's census, admissions criteria and any outstanding regulatory issues affect patients, families and referring hospitals around the Bay Area.

Mock survey, 120 beds and regulatory context

Sadu said Laguna Honda submitted a waiver application to CMS seeking approval for triple rooms (3‑bed rooms) for 120 beds that were decommissioned when federal nursing‑home rules changed in 2016. He said the city attorney recommended seeking a CMS waiver and the hospital is also exploring a possible state pathway to certify the beds.

Regulatory affairs staff noted that the hospital had several items addressed during its annual certification process and that HSAG is supporting quality‑improvement work. Public commenters and remote speakers raised concerns about past deficiencies and asked for updated, granular reporting on reasons for denied referrals.

Admissions, denials and outreach

Sadu presented admissions data through Dec. 31: 53 admits, 10 additional applications in process and 35 referral denials. He said 16 of the 35 denials were for behavioral‑health complexity; other denials were for residents with either no skilled‑nursing level of care or conditions too complex to be cared for safely at Laguna Honda. Sadu said no denials were due to insurance reasons.

Average daily census rose to 428 in December from 419 in November. Laguna Honda's total licensed skilled‑nursing capacity is 769 beds; because of the 120 beds at issue the current certified capacity without the waiver is 649, Sadu said.

Sadu described active outreach to referring partners — including UCSF, Sutter, the VA, San Francisco Health Plan, Jewish Family Services and other agencies — and said the hospital has hosted tours and webinars to reintroduce the campus and admissions process. The hospital also reported conversations with St. Anne's Nursing Home after that facility announced closure.

Workforce and operations

Laguna Honda began a tower nursing shift bid that will assign nurses to a consistent home unit rather than maintaining a large float pool, a change Sadu described as an industry best practice that supports resident‑centered care. Separately, HR reported that Laguna Honda's vacancy rate fell to 7.4 percent in December (from over 12 percent earlier in the prior year) and that batch hiring and onboarding have produced new starts in nursing and allied classifications.

Safety incidents and infection control

Sadu reported a contractor outside the campus damaged a gas line on Jan. 6, activating the hospital incident command system; the administration building was temporarily evacuated but no residents were evacuated and resident care continued without disruption. He also said Laguna Honda's respiratory illness response is now integrated into regular operations and that there were zero COVID‑19 cases among residents at the time of the update. The facility said it can now care for COVID‑positive residents on its acute care unit, reducing disruptive transfers.

Public comment and outstanding questions

Public speakers asked the commission to request more detailed, monthly stratification of denial reasons and clearer timelines from referral receipt to admission. Remote commenters cited prior deficiencies (including F‑tag citations reported in regulatory documents) and asked whether lingering reputational concerns or quality issues might be slowing admissions; others urged more robust counseling and insurance navigation for families seeking placements.

Sadu said the hospital anticipates the denial rate will decline as referring partners better understand current admission criteria and as outreach continues. He said the hospital is working to increase referral rates, acceptance rates and admissions throughout 2025.

Commissioners asked for additional granularity on denial reasons, outreach efforts and projections for reaching full capacity. Laguna Honda staff said they would provide updated stratified denial data and projected timelines for census targets when available.