SAN FRANCISCO, CA — San Francisco is expected to approve a $500,000 settlement with the family of an 80-year-old man living with Alzheimer's disease who died just 17 days after being transferred out of Laguna Honda Hospital and Rehabilitation Center, according to reporting by KQED. The Board of Supervisors is scheduled to vote on the settlement on Tuesday, marking the resolution of the final wrongful death lawsuit connected to the facility's turbulent recertification period.
The Forced Transfers and a Family's Loss
Laguna Honda, a safety-net hospital serving low-income patients with complex medical needs, lost its federal certification in 2022 after failing a series of safety inspections, as reported by KQED. During the facility's effort to regain good standing, state and federal regulators directed hospital administrators to prepare for a possible shutdown, resulting in patients being discharged or relocated to other skilled nursing facilities across the region.
Quy Pham had been a resident at Laguna Honda since 2021, according to the family's complaint filed in 2023. The lawsuit alleged elder abuse, neglect, violation of patients' rights, and wrongful death. As reported by KQED, the Pham family was informed that a bed was available at Seton Hospital in Daly City. Though reluctant, the family agreed to the transfer under what they described as pressure from hospital administrators.
"They didn't want him to go there, but they reluctantly agreed because they felt pressured," said Kathryn Stebner, the attorney representing the Pham family, as quoted by KQED. Pham left Laguna Honda on July 8 and died at Seton on July 25 at the age of 80.
According to the complaint, the family observed a rapid deterioration in Pham's condition after the move. Stebner told KQED that Pham required assistance with nearly every aspect of daily living, and the family alleged that the facility failed to follow required protocols for safe patient transfers. "If people with dementia are moved, even to a different building, they can go downhill immediately," Stebner said, as reported by KQED.
A Pattern of Controversy at Laguna Honda
The settlement is the latest in a series of legal actions tied to the upheaval at Laguna Honda. Stebner's firm initially filed three wrongful death lawsuits alleging that so-called transfer trauma — the harmful effects of abrupt relocation on vulnerable patients — contributed to patient deaths, according to KQED's reporting. Two of those cases were dismissed, with Pham's case concluding through this settlement.
Multiple patients reportedly died shortly after being moved from the facility, a pattern that nursing home advocates have attributed to the dangerous disruption in continuity of care that accompanies forced transfers. Teresa Palmer, an advocate with the social justice organization Gray Panthers who previously served as a physician at Laguna Honda from 1989 to 2004, told KQED that regulators' approach caused more harm than it prevented. "They were violating patients' rights and safety and discharging them illegally to nursing homes where they wouldn't get as good care," Palmer said, as quoted by KQED.
In a separate legal action, San Francisco agreed in November 2025 to pay $5.8 million to resolve a class action lawsuit alleging elder abuse at Laguna Honda between 2016 and 2019, according to KQED. Laguna Honda ultimately regained its federal certification in 2023.
A spokesperson for the San Francisco City Attorney's Office told KQED that the office considers the proposed settlement "an appropriate resolution given the inherent costs of continued litigation." The Department of Public Health, which operates Laguna Honda, declined to comment.
CMS Inspection History
While the Laguna Honda case highlights the dangers of patient transfers between facilities, federal inspection data underscores the broader challenges facing skilled nursing facilities nationwide. Facilities receiving transferred patients must meet rigorous federal standards for care continuity and resident safety.
Federal regulators require all certified nursing homes to maintain adequate safeguards against accidents, protect residents from abuse and neglect, and ensure proper transition planning when patients are admitted from other facilities. According to CMS records, even facilities with above-average overall ratings can carry significant deficiency histories. For example, The Milton Home, a 34-bed for-profit facility in South Bend, Indiana, holds a 4-out-of-5-star overall CMS rating with a top quality measure score of 5 stars, yet has accumulated 77 total deficiencies across 19 inspections on record.
The Milton Home's most recent inspection on November 7, 2025, resulted in a citation for failing to ensure the facility was free from accident hazards and that adequate supervision was provided to prevent accidents, according to CMS records. In December 2023, inspectors cited the facility for deficiencies related to protecting residents from abuse — including physical, mental, and sexual abuse — and for failing to timely report suspected abuse, neglect, or theft to proper authorities. Earlier that year, in October 2023, the facility received citations related to improper handling of residents' personal funds and inadequate notice regarding Medicaid and Medicare coverage and potential out-of-pocket costs.
These records illustrate a critical reality: families navigating transfers or seeking placement for loved ones should carefully review a facility's full inspection history through Medicare's Care Compare tool, rather than relying solely on star ratings, which may not capture the complete picture.
Ownership & Operations
The Milton Home operates as a for-profit corporation, according to CMS ownership data. Smaller for-profit facilities like this one face unique regulatory and operational pressures, including staffing challenges and compliance demands that can affect day-to-day care quality. The facility's staffing rating of 4 out of 5 stars suggests adequate staffing levels relative to patient needs, though federal data represents a snapshot and may fluctuate over time. Families considering any skilled nursing facility — whether as a transfer destination or a first placement — should inquire directly about staffing ratios, turnover rates, and how the facility manages care transitions for new admissions.
Resources for Families
Families with concerns about care quality, patient transfers, or potential neglect at any skilled nursing facility have several avenues for assistance and reporting:
- Indiana Long-Term Care Ombudsman: 1-800-622-4484 — Ombudsman programs advocate for residents' rights and can investigate complaints about care, abuse, or improper discharge and transfer practices. - National Long-Term Care Ombudsman Resource Center Hotline: 1-800-677-1116 — This federal eldercare locator connects families with local ombudsman programs and aging services in any state. - Online Resources: Families can visit [ltcombudsman.org](https://ltcombudsman.org) for information on residents' rights, how to file complaints, and how to find their local ombudsman office.
Federal regulations require nursing facilities to develop and execute comprehensive discharge plans that protect patient safety and ensure continuity of care. Families who believe a loved one was transferred or discharged improperly are encouraged to contact their state ombudsman program and, if necessary, file a formal complaint with their state health department's survey and certification division.
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