Misappropriation of Resident Funds by Business Office Manager
Summary
The facility failed to protect the rights of 74 out of 75 residents from the misappropriation of their property by the Business Office Manager (BOM), identified as V4. Over a period of eight months, V4 stole $11,815 from the residents' pooled trust account without their knowledge. This misappropriation involved forging signatures on checks, cashing them, and then depositing the funds into V4's personal bank account. The facility did not monitor the residents' pooled trust account monthly, which allowed V4 to continue these fraudulent activities. The facility's policies required dual signatures on all banking transactions and monthly oversight by the Administrator, but these measures were not enforced. V3, the Administrator in Training, admitted to not monitoring the monthly trust fund account or ensuring that residents received their quarterly statements. Additionally, V4 kept a resident's pre-paid social security card and made unauthorized charges, further violating the residents' rights. Interviews with residents and staff revealed that several residents did not receive receipts for purchases made on their behalf, and some residents' signatures were forged on withdrawal logs. The facility's audit confirmed a deficit of $11,815 in the residents' trust funds, and the trust fund withdrawal logs for several months were missing. The facility's lack of oversight and failure to adhere to its own policies allowed the misappropriation to occur, resulting in an Immediate Jeopardy situation.
Removal Plan
- The facility staff have interviewed all cognitive residents to identify those residents who allowed the facility to manage their monies and who had given V4/Business Office Manager monies for items and never got items, receipts, or monies back.
- V1 notified all resident's/responsible parties of discharged residents of misappropriation of funds.
- V2 was in serviced by V1/Regional director on the facility's Abuse Policy and Procedures.
- V2 was educated by V1 on how the resident trust fund is supposed to work and procedures on handling the resident's cash.
- V20 was thoroughly trained by V1 on the resident trust.
- A deposit was made in the amount of 11,815.00 to the resident's new trust fund account. This amount was the amount audited and determined by V7 to be missing from the resident's pooled trust fund account.
Penalty
Resources
Below are regulatory guidelines relevant to this citation:
A cognitively intact resident with chronic orthopedic pain had a PRN oxycodone order, but multiple doses were signed out on the narcotic log by an RN without corresponding entries on the MAR or documented pain assessments. A CNA/med tech reported frequent problems with this RN’s narcotic counts and documentation, describing erratic behavior when handling narcotic keys. The resident reported taking oxycodone only once or twice daily and otherwise using Tylenol, which conflicted with the number of oxycodone doses signed out. The facility’s investigation found it was inconclusive whether narcotics were misappropriated or whether there was a failure of documentation, but confirmed there was no evidence that all signed-out doses were administered.
A resident with mild cognitive impairment and multiple chronic conditions discovered unauthorized charges on a debit card and reported the card missing after reviewing a bank statement. A police report documented several unauthorized transactions totaling over $500. Law enforcement investigation identified a CNA as the perpetrator linked to at least one of the charges, and the facility’s self-report substantiated misappropriation of the resident’s property in violation of its abuse and misappropriation policy.
Multiple incidents showed that residents were not protected from misappropriation of medications. In one case, an LPN took Haldol from one resident’s stock supply and administered it by IM injection to another cognitively impaired resident without a physician’s order, instructing CNAs not to report it. In a second case, narcotic count sheets for a cognitively intact resident on Adderall showed repeated two‑tablet decreases at times when only one tablet was ordered and documented as given, all associated with the same LPN, with the DON later noting the LPN’s inconsistent explanations and refusal or delay in drug testing despite a policy requiring compliance. In a third case, an agency LPN documented removal of two Oxycodone tablets at multiple administration times for a resident ordered only one tablet q4h PRN, while the MAR reflected single‑tablet doses, revealing discrepancies between the narcotic count and the ordered and documented administration. These events demonstrate wrongful use and removal of resident medications contrary to physician orders and facility policies on medication administration, drug‑free safety, and prevention of misappropriation.
Multiple residents with complex medical and psychiatric conditions had discontinued medications, including analgesics, antipsychotics, antibiotics, antiemetics, muscle relaxants, and other drugs, that were later discovered in the home of a former LPN. A Board of Pharmacy investigation linked these medications to the facility and found that they had been removed after discontinuation and resident discharge or transfer. The investigation also identified inconsistent and incomplete medication documentation, pre‑signed shift‑to‑shift narcotic counts, and a lack of any reliable method to verify that discontinued non‑narcotic medications were actually placed into pharmacy return bags, resulting in misappropriation of residents’ medications.
The facility failed to protect residents’ controlled substances when an LPN diverted Oxycodone 5 mg tablets prescribed for four residents with chronic conditions and varying cognitive status. During a routine narcotic count, the DON discovered altered bubble packaging and unstamped white pills that did not match the manufacturer markings of Oxycodone. An audit identified 11 affected Oxycodone cards containing a total of 42 substituted pills. The LPN later admitted to replacing the Oxycodone with Melatonin 1 mg tablets over approximately one month and documented in a police statement that she intentionally used a similar-looking medication to imitate the narcotic, resulting in confirmed misappropriation of residents’ medications.
An agency LPN misappropriated oxycodone from four residents with conditions including quadriplegia, chronic pain, cancer, COPD, and other comorbidities, all of whom had physician orders for oxycodone for moderate to severe pain. The LPN diverted narcotics by forging other nursing staff signatures on narcotic flow records, removing oxycodone cards and associated documentation, and causing multiple residents to be missing known and unknown quantities of oxycodone tablets. The facility’s internal investigation confirmed the diversion and misappropriation of these controlled medications, in violation of its abuse and misappropriation prevention policy.
Failure to Prevent Possible Misappropriation and Poor Documentation of PRN Narcotics
Penalty
Summary
The deficiency involves failure to prevent potential misappropriation of a resident’s narcotic medication and failure to ensure accurate documentation of controlled substance administration. A cognitively intact resident with chronic pain related to an internal orthopedic device and left knee pain had an order for oxycodone 5 mg PO every four hours PRN for pain and a care plan directing staff to administer medications as ordered and observe for effectiveness and side effects. The resident’s MDS showed she rated her pain as 7/10 and received opioid medication. However, review of the February MAR and the narcotic log revealed multiple discrepancies between narcotic sign-outs and documented administration. On several occasions, oxycodone doses were signed out on the narcotic log by an RN without corresponding documentation on the MAR. Specifically, oxycodone was signed out on one evening at 9:30 p.m. with no MAR entry, and again on a subsequent night at 1:30 a.m. and 5:30 a.m. with no MAR entries for those times. Another dose was signed out at 9:00 p.m. while the MAR reflected administration at 10:16 p.m., and a later dose at 5:30 a.m. was documented on both the narcotic log and MAR. There was also no documentation of pain assessments before or after PRN opioid administration. These documentation gaps meant there was no evidence that all narcotic doses signed out were actually administered to the resident. Staff interviews further highlighted concerns about the handling of narcotics. A CNA/med tech reported frequently taking the narcotic keys from the RN and described the RN’s behavior as erratic, with repeated problems involving incorrect narcotic counts and missing documentation on both the MAR and narcotic log. The resident stated she did not receive oxycodone more than once or twice a day, preferring to take Tylenol the rest of the time, which conflicted with the number of oxycodone doses signed out. When questioned, the RN gave inconsistent explanations about how often she pulled and administered PRN narcotics and acknowledged struggling with the new system, while also suggesting the resident may have received PRN tizanidine instead of remembering oxycodone. The facility’s investigation concluded that evidence was inconclusive as to whether misappropriation occurred or whether the issue was solely lack of documentation, but confirmed there was no evidence the resident received all doses signed out on the narcotic log.
Plan Of Correction
1. Resident #99 had a Self-Reported Incident submitted and investigated via the EIDC on 3/2/26. The investigation was inconclusive as we could not prove that misappropriation occurred. On 2/24/26, Resident #99 was interviewed and pain assessed by Director of Nursing and resident had no ill effects related to the inconsistent documentation in the medical record as it relates to her controlled substance pain medication. 2. Like Residents are identified as residents who utilize controlled substance PRN pain medications. An audit will be completed by the Director of Nursing or designee for like residents utilizing the Controlled Substance Audit Tool which was created on 4/20/26 by the Director of Nursing for the purpose of this POC to ensure PRN controlled substance pain medications that are signed off the control sheet are documented in the resident medical record as well. This audit along with identified corrections will be completed on or before 5/13/26. 3. The Director of Nursing or designee will re-educate licensed nurses on the Controlled Substances Policy to include appropriate documentation of controlled substances. In addition, the licensed nurses will be re-educated by the Director of Nursing or designee on the Abuse Prohibition Policy to include misappropriation of resident property. This education will be completed on or before 5/13/26. 4. Utilizing the Controlled Substance Audit Tool which was created on 4/20/26 by the Director of Nursing for the purpose of this POC, the Director of Nursing or designee will complete an audit three controlled substance sheets from each of the nine medication carts for a total of twenty-seven sheets weekly for four weeks, beginning 5/14/26 to ensure PRN controlled substance pain medications that are signed off the control sheet are documented in the resident medical record as well. Inconsistencies noted from the audit will be investigated for misappropriation. Negative findings to be addressed immediately and negative trends or system wide issues will be reported to the QAPI committee, and the action plan will be adjusted as needed.
Failure to Protect Resident From Misappropriation of Debit Card by Staff
Penalty
Summary
The facility failed to protect a resident from misappropriation of property when a staff member wrongfully used the resident’s debit card without consent. The resident, who had mild cognitive impairment and multiple medical conditions including MS, type 2 diabetes, COPD, heart failure, CKD stage three, A-fib, hypertension, and peripheral vascular disease, discovered unauthorized charges after reviewing a bank statement. The resident reported that she could not find her debit card, had already contacted the bank to cancel the card, and was expecting paperwork from the bank. A bank statement showed multiple charges over several days, totaling $514.31, which the resident stated she did not make. A police report was filed for a stolen credit card with unauthorized use, and subsequent investigation identified a CNA as the perpetrator linked to at least one of the charges. The resident reported to surveyors that a staff member had stolen and used her card without permission and that law enforcement had informed her the perpetrator had been identified and would be prosecuted. The facility’s own SRI documented that misappropriation was substantiated and that the CNA was connected to at least one unauthorized transaction, while the facility’s abuse and misappropriation policy defined misappropriation as the deliberate misplacement or wrongful use of a resident’s belongings or money without consent.
Misappropriation of Resident Medications and Failure to Safeguard Controlled Substances
Penalty
Summary
The deficiency involves the facility’s failure to protect residents from misappropriation of medications and to ensure medications were administered only as ordered. For one resident with Alzheimer’s disease, malnutrition, anxiety, and other conditions, the quarterly MDS showed cognitive impairment and a need for supervision with eating and staff assistance for all ADLs, including medication administration. On an evening in August, an LPN obtained a vial of Haldol 5 mg IM from another resident’s stock supply without a physician’s order for this resident and administered an injection in the resident’s room. Multiple CNAs reported being asked to assist the resident to the room, witnessed the LPN pull down the resident’s pants and give the injection, and stated the LPN told them not to say anything because the medication was not prescribed for the resident and had been taken from another resident’s supply. The DON confirmed there was no Haldol order for this resident on that date, that a vial was missing from the other resident’s Haldol supply, and that the LPN denied giving the dose. A second deficiency involved misappropriation and inaccurate handling of a controlled substance prescribed for another resident with ADHD, bipolar disorder, seizures, Tourette’s disorder, and other diagnoses. This resident was cognitively intact and independent with ADLs, and had an order for Adderall 20 mg twice daily at specific times. Review of the narcotic count sheets showed that on multiple occasions over two days, the Adderall pill count decreased by two tablets at times when only one tablet was ordered to be administered, all associated with the same LPN’s signatures. These discrepancies indicated that two pills were removed from the count when only one was ordered for the resident at each administration time. The DON later described that the LPN could not explain the discrepancies, claimed to have wasted a capsule without a witness, initially refused an in‑facility urine drug screen, delayed completion of an independent drug test, and that the facility’s policy stated refusal or failure to comply with drug testing requirements would be considered a refusal to test and subject to immediate termination. A third deficiency involved another resident with intact cognition and independence in ADLs who had multiple medical diagnoses and an order for Oxycodone 5 mg, one tablet by mouth every four hours as needed for pain. The MAR documented that this resident received single 5 mg doses at several times over two days, all administered by an agency LPN. However, the narcotic count sheet for the same period showed that the agency LPN repeatedly signed out two tablets at each administration time, including multiple entries for the same early‑morning time, despite the order being for only one tablet as needed. A subsequent review of the narcotic count by another LPN revealed discrepancies between the MAR and the narcotic sheet, with repeated documentation of two tablets being removed when only one tablet was ordered and documented as given. The DON stated that misappropriation occurred in all three incidents and that the facility’s abuse, neglect, and exploitation policy defined misappropriation as the deliberate misplacement, exploitation, or wrongful use of a resident’s belongings or money without consent, and that the facility had unsubstantiated these incidents despite the misappropriation having occurred. The facility’s own policies and job descriptions further framed the deficiencies. The LPN job description required accurate preparation and administration of medications according to physician orders and accurate recording of medications administered. The Drug Free Safety Policy specified that refusal to comply with testing requirements, failure to provide valid specimens, or refusal to submit to reasonable suspicion or follow‑up tests would be considered a refusal to test and subject to immediate termination. The Abuse, Neglect, and Exploitation policy stated that the facility would implement policies and procedures to prevent and prohibit misappropriation of resident property. Despite these written expectations, the events described show that medications belonging to or prescribed for specific residents were wrongfully used or removed, and that in one case an LPN’s conduct around drug testing did not align with the facility’s stated policy, contributing to the overall deficiency in protecting residents from misappropriation.
Misappropriation of Discontinued Resident Medications and Inadequate Medication Control
Penalty
Summary
The deficiency involves the facility’s failure to protect multiple residents from misappropriation of their medications, which are considered the residents’ belongings. Ten residents had medications that were later found in the home of a former LPN who had worked part‑time at the facility. These residents had various diagnoses including paranoid schizophrenia, Alzheimer’s disease, bipolar and schizoaffective disorders, COPD, diabetes, osteoarthritis, paraplegia, end‑stage renal disease, and anxiety disorders. Their treatment regimens included antipsychotics, antidepressants, antianxiety agents, anticonvulsants, opioids, antibiotics, antiplatelet agents, hypoglycemics, and other medications such as ibuprofen, quetiapine, ondansetron, hydroxyzine, olanzapine, cyproheptadine, ampicillin, gabapentin, metronidazole, and baclofen. The Ohio Board of Pharmacy and law enforcement identified probable drug diversion by an LPN who had worked at the facility. After the LPN’s death from an overdose of prescription drugs, medications labeled for ten different residents from the facility were found at the LPN’s residence. These included ibuprofen 600 mg and 800 mg, quetiapine 100 mg, ondansetron 4 mg, hydroxyzine 25 mg, olanzapine 10 mg, cyproheptadine 4 mg, ampicillin 500 mg, metronidazole 500 mg, baclofen 10 mg, and an empty blister pack of gabapentin 300 mg. The medications had been discontinued at the facility, and the Board of Pharmacy determined they had been removed from the facility after discontinuation and after residents were discharged or transferred. During the Board of Pharmacy’s inspection of the facility, multiple documentation and control issues were identified that related to the handling and security of medications. Signatures on controlled drug documentation were inconsistent, with variations in initials and full names, and some shift‑to‑shift narcotic counts were pre‑signed by the off‑going nurse. Documentation on medication cards or sheets did not always match the actual count, and some shift‑to‑shift counts were missing dates, signatures, and counts. Facility staff, including the Regional Director of Clinical Operations and an LPN, explained that when non‑narcotic medications were discontinued, nurses were expected to remove them from the medication cart and place them in a pharmacy return bag, but there was no method to verify that this actually occurred. The facility’s own abuse, neglect, and misappropriation policy defined misappropriation as the deliberate misplacement, exploitation, or wrongful use of a resident’s belongings without consent, and the findings showed that discontinued resident medications were not adequately secured or tracked, allowing them to be wrongfully removed and found in the former employee’s home.
Misappropriation and Diversion of Resident Oxycodone by LPN
Penalty
Summary
The deficiency involves the facility’s failure to protect residents from misappropriation of their controlled substances, specifically Oxycodone 5 mg tablets prescribed for four residents with conditions including COPD, type 2 diabetes, vascular dementia, chronic pain, chronic kidney disease, and inflammatory spondylopathy. These residents had active physician orders for Oxycodone and varying cognitive statuses, with some cognitively intact and others cognitively impaired. During a routine narcotic count, the DON identified alterations in the packaging of multiple controlled substances, including nicks and tears on the backs of bubble packs. When the compromised medications were popped for waste, the pills inside were found to be unstamped white tablets that did not match the manufacturer markings of the legitimate Oxycodone tablets in other narcotic cards. Further review showed that 11 Oxycodone 5 mg cards were affected, with a total of 42 unstamped pills discovered in place of the ordered narcotic. Each compromised card was associated with residents who had active Oxycodone orders, and these residents were identified as potentially affected by the misappropriation of their medications. Interviews and subsequent investigation revealed that an LPN admitted responsibility for the drug discrepancy and diversion of controlled substances. The LPN confirmed that she had been replacing Oxycodone 5 mg tablets with Melatonin 1 mg tablets in all 11 affected packages and that this diversion had been occurring within the last month. A police statement written by the LPN corroborated that she intentionally substituted the narcotic with a similar-looking medication to imitate the Oxycodone. The facility’s investigation substantiated misappropriation of residents’ controlled substances, confirming that four residents were affected by this diversion.
Misappropriation and Diversion of Resident Narcotic Medications by Agency LPN
Penalty
Summary
The deficiency involves misappropriation of residents' narcotic medications by an agency LPN, resulting in missing oxycodone tablets and related narcotic documentation for four residents. One resident with quadriplegia, chronic pain syndrome, and anemia, who had intact cognition, had an order for oxycodone 10 mg every four hours as needed for pain; this resident was found to be missing an unknown amount of oxycodone tablets after the LPN forged other nursing staff signatures on the narcotic flow record. A second resident with malignant neoplasm of the left breast, morbid obesity, and generalized anxiety disorder, also cognitively intact, had an order for oxycodone 4 mg every four hours as needed for moderate to severe pain and was determined to be missing seven oxycodone tablets. A third resident, who had malignant neoplasm of the bronchus, bipolar disorder, and a brain disorder, with documented memory problems, had standing and as-needed oxycodone orders (5 mg four times daily and 10 mg every four hours as needed for increased pain) and was found to be missing 30 oxycodone tablets. A fourth resident with COPD, essential hypertension, and muscle wasting, cognitively intact and ordered oxycodone 5 mg one to two tablets every four hours as needed for pain, was missing an unknown amount of oxycodone because the LPN removed the remaining oxycodone card and narcotic flow record from the facility. The facility’s own investigation, as reflected in the misappropriation self-reported incident, substantiated that the agency LPN diverted narcotics from these four residents, contrary to the facility’s abuse prevention policy that requires protection from misappropriation of resident property.
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