USA Today Investigation into Nursing Home Trust Fund Mismanagement Spurs Congressional Investigation: Expect More Texas Nursing Home Trust Fund Fraud Arrests Soon
Recently, USA Today published the results of its investigation into nursing home trust fund mismanagement, and now Senators up in Washington, D.C. are talking about an official federal investigation into nursing home fraud across the country.
With all this hoopla, it’s safe to assume that both state and federal fraud investigators in all sorts of law enforcement offices (like the Federal Bureau of Investigation as well as the Office of the Attorney General for the State of Texas) will be hot on the trail of suspected nursing home fraud.
What is Nursing Home Fraud?
Nursing Home fraud is a form of Health Care Fraud, one of the major targets of Eric Holder and the U.S. Department of Justice. The FBI has its own “Health Care Fraud” web site complete with a “Most Wanted List” of alleged Health Care Fraud conspirators.
Nursing home fraud as exposed by the recent USA Today investigation involves money placed into trust fund accounts by residents of the nursing home long term care facility. These nursing home trust accounts work like regular bank checking accounts in many ways. The nursing home resident should see monthly paperwork that seems very familiar to them: monthly statements that detail what went into the account and what left the account, interest earned, fees paid, etc. However, unlike their old bank checking accounts that the residents controlled, the nursing home trust accounts are overseen by the nursing home itself, as part of its offer of care to the nursing home resident. (Which makes sense, since some of these elders may not have the desire or the ability to handle financial details.)
In cases of nursing home trust account fraud, the money in the resident’s nursing home account is maneuvered out of the account by someone with access to the resident’s account information.
The USA Today report gave as one example a nursing home trust fund account fraud case out of Waxahachie, Texas.
In the Texas nursing home fraud example, an employee of the Renfro Health Care Center there in Waxahachie was arrested for check forgery of 145 checks on 110 different resident accounts that totaled over $350,000.00. The Texas nursing home employee was discovered and arrested after a local Texas bank clerk noticed that the endorsement signature the employee used on one of the resident’s checks did not match with the bank’s signature records on that account. Result? She pled guilty to felony charges of misapplication of fiduciary property.
Nursing Home Fraud Is Hard to Discover
In the Waxahachie, Texas, example there was an eagle-eyed bank teller who spotted a problem with the endorsement signature on a resident’s check and started the ball rolling on the investigation, arrest, and plea deal for that nursing home employee who had been taking money out of nursing home trust fund accounts.
However, the reality is that Texas nursing home trust fund accounts, just like those in other parts of the country, aren’t checked all that often and don’t have lots of double-checks built into the system. These nursing home resident accounts are easy temptations to those nursing home employees that see that money setting there, or those checks coming into the nursing home offices: the USA Today investigation has revealed that nursing home trust fund accounts are easily mismanaged and it’s a big, big problem in nursing homes accross the country right now.
The news that elders living in nursing home facilities are such easy targets for fraud has spread like wildfire in many parts of the country. Wealth fund managers are spreading the word about what the USA Today investigation has spotlighted, for example.
Congress Is Pushing for New Laws Against Nursing Home Trust Fund Fraud – and Inviting State Law Enforcement To Join In the Effort
And now, the U.S. Senate’s Aging Committee is moving for a full federal review of the situation to insure that in the future, there are more safeguards placed upon nursing home trust fund resident accounts by federal law or regulation. Additionally, Florida Senator Bill Nelson (who started the Congressional Committee action after reading the USA Today piece), has written the Inspector General for the Department of Health and Human Services, asking the Executive Branch to investigate what more the federal government can do to protect against nursing home trust fund fraud.
From Nelson’s formal letter to the Inspector General, which includes the Congressional request that state law enforcement also be brought into the federal investigation:
Despite the crucial fiscal responsibility charged to these nursing homes, USA Today’ s article of October 16, 2013, “Trust Fund Raiders,” revealed an alarming number of cases involving unscrupulous and dishonest employees of nursing homes who siphoned, forged , and swindled millions of dollars from the trust fund accounts of unsuspecting and helpless residents. For many of these victims, the thefts represented a significant portion of their life savings, or else were funds used to keep them living in the nursing home.
Moreover, it was revealed that many of these nursing home trust funds failed to issue interest as required, could not properly justify their financial holdings, or were not properly insured to protect against loss or theft. While these trust funds are supposed to be regularly audited and monitored, it is alleged by well-informed observers that such oversight has been sorely lacking in much of this system. According to data cited in the article, during the past three years, auditors have issued more than fifteen hundred citations to nursing homes for mishandling these trust funds in some manner.
… I request, therefore, an examination of CMS’s management and oversight of these nursing home trust funds, and to recommend corrective actions for any shortcomings identified. Such an inquiry also should include consultation with the state law enforcement officials and nursing home advocates quoted in the article, a copy of which is enclosed. Please have OIG officials consult with the Committee staff prior to initiating this requested review.
Texas Nursing Homes Should Expect Greater Scrutiny of Nursing Home Trust Fund Accounts in the Future
Given all the attention that has come to nursing homes — particularly Texas nursing homes — as a result of this news story spreading the word to state and local lawmakers and law enforcement authorities (e.g., the Office of Texas Attorney General Greg Abbott was quoted in the USA Today article), it’s not going to be a big surprise to learn that there will be more arrests of nursing home employees and staff on allegations of health care fraud and mismanagement of nursing home resident account funds in the upcoming months.
Both state law enforcement as well as federal agencies are interested in the possibility of financial crimes being committed in local nursing homes. Texas nursing home managers, employees, staff, residents, and their families should all be aware of this new law enforcement trend.
For more on nursing home health care fraud, check out our web resources page as well as Case Results, which include Mr. Lowe’s client receiving probation with no prison incarceration after the client was found to have embezzled $365,000 from a Dallas Nursing Home.
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