An investigative report has found that many nursing homes are mishandling resident's funds. USA Today found 1,500 cases where nursing homes were cited by state and federal regulators for mishandling funds held in resident trust accounts or failing to protect the funds from theft.
Nursing homes set up trust funds for residents who want the nursing home to handle their money. The funds are supposed to work like a bank account, with accrued interest and regular statements. However, there is very little oversight of these accounts.
The USA Today report found that most of the 1,500 deficiencies issued by nursing home inspectors involved failing to pay interest, inadequate accounting, or not giving residents proper access to their money. But the report also uncovered more serious cases of theft, in which "employees or administrators siphoned huge sums of money from trust accounts — hundreds of thousands of dollars in some instances — for everything from shopping and gambling sprees to routine household expenses."
In one case, a nursing home employee began billing personal purchases to resident trust funds in 2010, choosing residents who had no family or some dementia. Over the course of a year the employee took more than $101,000 from the trust funds of 83 residents in two different facilities. She was caught only when an administrator became suspicious about a $90 debit for women’s designer jeans from the account of a male resident who had lost both his legs.
Catching the misconduct can be difficult. Federal rules do not require audits for trust funds, and only a few states have a system for audits in place. In addition, in a follow-up article, USA Today reported that many states do not require background checks on employees that manage trust accounts. Sen. Bill Nelson (D-Fla.), chairman of the Senate Special Committee on Aging, has asked the inspector general at the Department of Health and Human Services to look into the issue.