USA Today recently published a report about theft from nursing home resident trust funds by facility employees. According to USA Today’s analysis of data from the Centers for Medicare and Medicaid Services (“CMS”), more than 1,500 nursing homes have been cited since 2010 for mismanaging trust funds—of the more than 100 thefts identified, at least 10 exceeded $100,000. The report warns about inadequate oversight, at both the nursing home and state surveyor level, to effectively protect the integrity of resident funds from employee theft.
While nursing home residents are not required to keep their money in facility trust funds, this is a very common service offered to, and used by, residents. The Resident Rights published in the Code of Federal Regulations (C.F.R. § 483.10) provides a general description of what a facility must do to protect resident money. Any amount over $50 must be placed in an insured, interest-bearing account separate from nursing home funds. The facility must provide statements quarterly and at the request of the resident or the resident’s legal representative. Mandatory oversight is presently lacking: there are no federal trust fund audit requirements and the state surveys conducted on behalf of CMS have focused more intensively on facility quality of care than on accounting practices. Some states have audit requirements, but others have no such oversight.
Even when the monetary loss is minimized through insurance and recovery efforts, nursing home theft strains the relationship between residents and facility and can be additionally difficult and time-consuming for managers and employees of the facility caught off-guard by their colleague’s dishonesty.
The U.S. Senate Aging Committee has taken heed of the USA Today report. The chairman of the committee has requested a federal review of nursing home trust funds by the Department of Health and Human Services Office of the Inspector General. To protect residents and prevent scrutiny from regulators, facilities should review their handling of resident trust funds. Nursing homes can minimize risk by taking the following steps:
(1) Do not leave accounting responsibilities with one individual. Whenever possible, different people should be responsible for deposits, withdrawals, and reconciling accounts so that discrepancies or anomalies cannot easily go unnoticed;
(2) Conduct periodic audits of trust fund accounts. Audits may include checking that (a) residents are receiving account interest and statements; (b) deposits, withdrawals, and balances are properly reconciled; and (c) the accounts of deceased residents are properly closed; and
(3) Review and update facility policies and procedures about the management of resident trust fund accounts.
If you have any questions about nursing home trust funds, or nursing home regulation in general, please contact a member of the Benesch Health Care Department.