Does a nursing home potentially violate the False Claims Act by submitting claims for reimbursement in a situation where the nursing home should have reasonably known and put in place checks and balances to minimize the risk of an administrator stealing residents’ funds, thereby breaching the nursing home’s fiduciary duty to the residents in violation of residents’ rights? [F602 Free from Misappropriation/Exploitation, F567 Protection/Management of Personal Funds, F568 Accounting and Records of Personal Funds, F569 Notice and Conveyance of Personal Funds]
Compliance Perspective – Financial Exploitation
Policies/Procedures: The Compliance and Ethics Officer with the Administrator will review policies and procedures regarding the nursing home’s fiduciary responsibility for the protection and management of residents’ funds to ensure their adequacy in preventing any misappropriation or exploitation.
Training: Staff will be trained in following an established protocol of checks and balances designed to ensure that funds cannot be diverted by an employee for personal use.
Audit: The Compliance and Ethics Officer will ensure that an audit of the residents’ trust fund bank records is scheduled and conducted periodically to determine that there is appropriate supporting documentation for all withdrawals. The results of the audit will be summarized and reported to the Compliance and Ethics Committee.
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A former long-time administrator at an Oklahoma nursing home has been charged with financial exploitation after she allegedly diverted $217,758.13 from 33 residents’ trust accounts.
The probable cause affidavit says a review of the banking records revealed that the defendant used her position as the administrator to write checks, payable in cash, to herself or to the bank holding the trust—all of which allowed her to withdraw residents’ funds in cash. The resident’s trust account holds funds that are to be used strictly for the benefit of individual residents.
The defendant, who worked as the nursing home’s administrator from 2005 until 2015, told the investigator that she took the money to support her gambling habit. She offered to pay the money back and surrender her administrator’s license.
If convicted, the defendant could serve up to 10 years imprisonment and be fined.
