After facing closure and revoked federal dollars, one of the largest nursing homes in the country this week had a change in fortune. Officials agreed to grant San Francisco-based Laguna Honda Hospital & Rehabilitation an extended reprieve to keep its doors open and funding flowing.

Updates follow negotiations between the Centers for Medicare & Medicaid Services (CMS) and city officials; city-run Laguna has one year to resolve and improve upon its regulatory issues and will receive federal funding through Nov. 13, 2023, according to a San Francisco Chronicle report.

In exchange for the reprieve, San Francisco City Attorney David Chiu is dropping the city’s lawsuit against CMS, along with its appeals to overturn the facility’s decertification, the Chronicle reported.

The facility’s funding was frozen following a failure to meet compliance standards including resident assessments, comprehensive resident centered care plans, quality of care, pharmacy services and administration, a CMS memo previously stated.

Another lawsuit filed by former City Attorney Louise Renne remains in limbo. The class-action lawsuit against state and federal officials aims to permanently stop patient transfers.

Laguna began transferring and discharging 57 residents following news that the facility would close in April, resulting in nine deaths shortly after the move.

The California Department of Public Health, CMS and local officials put a pause on the nursing home’s closure in August following the deaths. The city had filed lawsuits the same monthagainst the federal government, arguing the deadline was too soon and put the facility’s patients at risk.

Officials with San Francisco said the deaths were likely caused by “transfer trauma” and Laguna’s closure was pushed from Sept. 13 to November as a result.

Under the new agreement, a pause on resident transfers will continue through Feb. 2, 2023, with an option to extend the pause if Laguna is on track with its improvements outlined by CMS, according to the Chronicle.

“Laguna Honda will continue to work on quality improvement efforts while aiming to reapply to participate in Medicare and/or Medicaid,” according to a joint statement filed by CMS, the state Department of Public Health, and the City and County of San Francisco. “All parties are committed to ensuring that, regardless of income, people living in nursing homes are receiving safe, high-quality services and support.”

Laguna CEO Roland Pickens said in a statement issued in September that the facility is “on the right track” toward improvements but isn’t 100% there yet.

Leadership continues to execute inspection simulations, and has retrained every employee in infection control. Laguna Honda was founded in 1866 and at one time cared for 780 residents, according to its website.

U.S. Sen. Dianne Feinstein of California said in a statement that she welcomed the news that CMS and local officials were able to reach an agreement to keep Laguna Honda open.

“Laguna Honda is a critical safety net for the city, caring for many of the region’s most vulnerable patients. More than 600 patients are currently served by the hospital, most of whom have nowhere else to turn,” she said.