A recent story by USAToday has put the spotlight on abuse of resident trust funds in nursing homes. While the article indicates more oversight of these funds is needed, the industry says the processes for managing trust funds are sufficient.
There are federal and state regulations governing management by and accountability of nursing homes in regards to resident trust funds, said Marsha Greenfield, vice president of legislative affairs for LeadingAge, a membership association for organizations providing services to the aging. And nursing homes have in place many policies and practices for protecting these funds.
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Among those regulations and policies are corporate compliance plans that address employee and organizational responsibilities and whistle-blower reporting mechanisms. Additionally, the Affordable Care Act mandated compliance and ethics programs for nursing homes be in place by March 2013.
“Therefore, while more specifically highlighting trust fund theft as a risk and applying existing regulations when concerns or problems are identified may help,” said Greenfield, “it is not clear that additional requirements are needed.”
However, it doesn’t hurt to step it up, said Jonathan Rosenfeld, founder and lead attorney for Rosenfeld Law Offices, a personal injury firm based in Chicago.
It is not unusual to have one staff person – often with an accounting or bookkeeping background – be the sole staffer overseeing residents’ trust funds, said Rosenfeld. If the one person removing money from a resident’s trust fund is doing so in small increments over an extended period of time, detecting a crime is difficult.
“My hunch is that unless an employee is caught stealing nominal amounts red-handed, there are very few ways this type of financial abuse can be identified or prosecuted,” he said.
Very few administrators have the training to detect when an employee is diverting funds for their own benefit, he noted, so to prevent trust fund abuse, nursing homes may want to have an independent auditor review patients’ accounts to review the work of their staff and conduct spot audits of individual accounts on a regular basis.
Another alternative may be for nursing homes to simply outsource the administration of patient trust funds, he said. “While some added work and expense may be involved, putting such administration into the hands of a third-party may help protect facilities from any allegation of impropriety.”