Improper Use of Resident Personal Funds for Medicaid-Covered Services
Summary
The facility failed to ensure that a resident's personal funds were not used to pay for items or services covered by Medicaid. According to the facility's Financial Responsibility Agreement and Medicaid guidelines, residents eligible for Medicaid should not be charged for medical or personal supplies routinely supplied to all residents, and their Personal Needs Allowance (PNA) should not be used for items or services paid for by Medicaid. Despite this, a resident who had been on Medicaid since admission had $1,086.20 deducted from her personal trust account for room and board, which should have been covered by Medicaid and her social security income. The resident's trust account was subsequently depleted, with no deposits made since her admission, and she did not receive her monthly PNA due to issues with social security checks not being delivered to the facility or the facility not being set as her payee. The business office manager confirmed that the resident's Medicaid and social security should have covered her room and board, and that the resident had not received her $60 monthly PNA for the past year. The deduction from the resident's trust account for room and board was made at the direction of her financial power of attorney, but this action was inconsistent with Medicaid regulations. The resident reported having no money for personal expenses, relying only on occasional bingo winnings or gifts from friends, and her trust account balance was reduced to one cent.
Penalty
Resources
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The facility failed to provide or document residents’ choice for routine hair hygiene services, including free simple haircuts and trims, versus paid barber or beautician services for multiple Medicaid residents. Records showed the facility offered an onsite beautician every other week and expected residents to pay from personal funds or trust accounts, while resident interviews confirmed they were told haircuts were not included or were directed to the beautician for paid services. The admission materials and posted information listed beauty and barber services, but did not document that residents were informed of a no-cost routine hair care option or that they knowingly chose paid services.
Improper billing for a room telephone not present. A resident and her DPOA reported the facility kept charging $23 for a phone the resident was not using, and no phone was observed in the room. Staff gave conflicting statements about whether the resident had a phone, while the billing statement still showed a phone charge.
The facility improperly charged four residents’ trust accounts for private room and board during a month when each had documented Medi-Cal coverage. Business records showed that each resident’s trust account was debited the same substantial amount for private room and board while Eligibility Responses confirmed Medi-Cal benefits for that period, and payer setup information or billing practices reflected private pay status instead of Medi-Cal. The BOM acknowledged that these residents were switched from Medi-Cal to private pay despite having billable Medi-Cal benefits and that their trust funds should not have been charged, and the ADM confirmed residents are not supposed to be billed for Medi-Cal-covered services. The facility’s admission agreement also stated that a Medi-Cal-participating facility may not require a resident to remain in private pay status before converting to Medi-Cal coverage, and requested Medi-Cal billing policies were not provided.
Failure to inform Medicaid residents of covered basic haircuts: two residents were charged $15 for haircuts even though basic hair care was covered under the Medicaid per-diem rate. The admission packet and salon price list did not tell residents that a free basic haircut was available, and both residents said no one informed them of this benefit. The BOM stated the facility did not provide free basic haircuts, while the Administrator later stated Medicaid residents should be informed that the per diem covered basic haircuts.
A resident with CKD stage 3, gait and mobility issues, depression, and prior TIA, admitted under Kaiser Medicare coverage, had an unsigned NOMNC indicating an end to covered services and a planned discharge. After the resident experienced oxygen desaturation, was sent to the ED, and returned for further observation and treatment, the facility placed the discharge on hold but changed the payer status to private pay based on the unsigned NOMNC, without obtaining updated authorization from Kaiser or a new NOMNC. The Business Office did not secure required authorization or a Financial Responsibility Form and instead billed the resident’s representative for several days of room and board and sent multiple collection letters, despite remaining Medicare days and facility policies and contract terms requiring proper notice and documentation for non-covered services.
A resident with multiple chronic diagnoses had Medicaid-related supplemental dental and vision premiums deducted from personal funds instead of being handled through the facility’s COC arrangement. Financial records showed repeated premium withdrawals, an additional unexplained deduction, and an overdeduction of COC, while the BOM, ARD, and POA stated the premiums were supposed to be paid by the facility and not charged to the resident’s account.
Failure to Offer Free Routine Hair Care or Document Choice for Paid Salon Services
Penalty
Summary
The facility failed to provide residents the choice of routine personal hair hygiene services, including free simple haircuts and trims by facility staff, or a professional haircut by a licensed barber or beautician at a cost, for 7 of 8 residents reviewed who were covered by Medicaid. The admission agreement and related materials described beauty and barber services as additional or noncovered services, but the documents reviewed did not list associated costs in the admission materials and did not notify residents that routine hair hygiene services were included in room and board costs or that they had the right to receive simple haircuts and trims without charge. Facility records and interviews showed that the beautician came to the facility every other Tuesday and residents were expected to pay for services from personal funds or trust accounts. Staff stated residents paid the beautician or had the cost taken from their trust funds, and one RN stated there were no staff haircuts for Medicaid residents that she knew of. A posted salon price list showed charges for services such as haircut, trim, and shampoo. The facility also had a sign-up sheet for beauty and barber services, but it did not document that residents were informed of a free routine hair care option or that they knowingly chose a paid professional service. Resident interviews confirmed that routine hair care was being handled inconsistently and that paid salon services were being used for haircuts and trims. One resident said staff washed hair during bed baths but paid the beautician for hair washing three times; another said haircuts were not included and came out of resident funds; another said they paid $35 for a haircut from trust funds; and another said they were told they had to go to the beautician and pay $70 for a beard trim and haircut. The administrator stated residents typically used their personal care allowance to pay the beautician, and if a resident had no funds and was covered by Medicaid, a sunshine fund had been used in the past.
Improper Billing for a Room Telephone Not Present
Penalty
Summary
The facility billed Resident #25 for a personal room telephone even though no telephone was present in the resident’s room. During a room visit, the resident and her Durable Power of Attorney stated they were concerned about improper billing for telephone services and reported that the facility continued to charge them for a phone the resident was not using. The DPOA said the resident had been in the facility since the prior November, that he had paid the bills, and that he had spoken with the office about the charge each month. On inspection of the room, no telephone was present. An Administrative Staff member stated that residents not on skilled care were charged $23.00 for a telephone and said the admission packet should explain that, but also stated that if no phone was in the room there would not be a charge to the resident’s bill. The staff member initially stated the resident had a phone based on a recent audit, while a CNA said she did not think the resident ever had a phone and an LPN stated the resident had a phone when first admitted but it was removed because she could not hear out of it and could not use it. The billing statement for 5/1/2026 was reviewed and contained a $23.00 charge for Phone.
Improper Charging of Resident Trust Funds for Medi-Cal-Covered Room and Board
Penalty
Summary
The deficiency involves the facility’s failure to protect residents’ personal funds from being charged for services covered by Medi-Cal. For four residents whose records were reviewed, the facility debited their trust accounts for private room and board charges for a month in which they had documented Medi-Cal coverage. Facility business records, including the Trust - Transaction History and Activity Reports, showed that each of these residents’ trust accounts was debited $16,197.50 for private room and board for the same month. Eligibility Response documents dated at the beginning of that month indicated that each of these residents had Medi-Cal covered benefits for that period. Resident 7 was re-admitted with diagnoses including dementia, schizophrenia, and bipolar disorder, and had a BIMS score indicating severe cognitive impairment. Despite an Eligibility Response showing Medi-Cal coverage for the month in question, the Payer Setup Information showed that this resident was billed as private pay, and the trust account was debited $16,197.50 for private room and board. Resident 10, admitted with dementia and a psychotic disorder and documented to have fluctuating capacity but a BIMS score indicating cognitive intactness, similarly had Medi-Cal coverage per the Eligibility Response, yet the Payer Setup Information listed private pay status and the trust account was debited the same amount for private room and board. Resident 11, re-admitted with metabolic encephalopathy and dementia and documented as having capacity to make decisions, also had a Trust - Transaction History showing a $16,197.50 debit for private room and board for the month, while an Eligibility Response confirmed Medi-Cal coverage for that same period. Resident 12, re-admitted with metabolic encephalopathy, dementia, and altered mental status, had severe cognitive impairment per BIMS and a daughter listed as the responsible party. This resident’s Trust - Transaction History and Care Activity Report showed a $16,197.50 debit for private room and board for the month, despite an Eligibility Response confirming Medi-Cal benefits and Payer Setup Information indicating the resident was billed as private pay. In interviews, the Business Office Manager explained that the facility’s process is to recommend residents enroll in Medi-Cal as secondary insurance to avoid private pay charges when Medicare coverage ends, and stated that residents are only transferred to private pay when they do not have secondary insurance. The Business Office Manager acknowledged that on the first day of the month in question, each of the four residents was switched from Medi-Cal to private pay despite documented evidence of billable Medi-Cal benefits for that month, and that their trust accounts should not have been charged $16,197.50 for private room and board. The Administrator similarly stated that residents are not supposed to be charged for Medi-Cal covered benefits and confirmed that these four residents should not have been switched to private pay to cover services that Medi-Cal would have covered. The facility’s standard admission agreement also stated that no Medi-Cal-participating facility may require any resident to remain in private pay status before converting to Medi-Cal coverage, and requested Medi-Cal billing policies were not provided.
Failure to Inform Medicaid Residents of Covered Basic Haircuts
Penalty
Summary
The facility failed to inform and provide a free basic haircut for two Medicaid residents, Resident #14 and Resident #75, even though Missouri Medicaid regulations listed basic hair care, including haircuts, as covered under the per-diem rate. Review of the facility’s admission packet showed that the appendix stated hairdresser and barber services were not included in the basic daily rate and were not covered by Medicare and Medicaid/Managed Medicaid programs, but it did not include information telling residents that a free basic haircut was available to Medicaid residents. The salon price list posted on the door also listed haircut services for $15 and did not mention a free basic haircut for Medicaid residents. The Resident Trust Box Log showed that both Resident #14 and Resident #75 were charged for haircuts. During interviews, Resident #14 and Resident #75 each stated that no one told them they could get a free basic haircut, and both expressed that this would have been helpful because of limited monthly funds. The Business Office Manager stated that the facility did not provide free basic haircuts or trims, although nursing assistants would shave and trim resident beards. The Administrator stated that if a resident could not afford a haircut, the facility would pay the beautician to provide one, and later stated that Medicaid residents should be informed that the Medicaid per diem covered the expense of basic haircuts.
Improper Private-Pay Billing for Medicare-Covered Stay Extension
Penalty
Summary
The deficiency involves the facility’s failure to limit charges against a resident’s personal funds for services covered by Medicare. A resident was admitted with chronic kidney disease stage 3, gait and mobility abnormalities, depression, and a history of transient ischemic attack, and had full Medicare coverage for 100 days through Kaiser upon admission. A NOMNC dated 3/17/23 indicated Medicare-covered services would end on 3/20/23 with discharge planned for 3/21/23, but this NOMNC was unsigned and lacked attestation. Despite this, the facility treated the NOMNC as effective and changed the resident’s payer status to private pay effective 3/21/23, based on the unsigned NOMNC and without providing the resident or resident representative with a notice of private pay costs. On 3/20/23, the resident experienced oxygen desaturation, was transferred to the hospital, and then returned to the facility early on 3/21/23. Progress notes showed that the discharge to a board and care was placed on hold for observation after the emergency room visit, and the attending physician ordered STAT labs and a chest x-ray, followed by continued monitoring and a later plan for discharge with home health and PCP follow-up. The resident ultimately remained in the facility and was discharged to a board and care on 3/24/23. During this extended stay, the Admissions Coordinator stated that if a resident returns from the hospital with remaining Medicare days, coverage should continue automatically, and acknowledged uncertainty about what happened with this resident’s coverage, as Medicare days were still remaining when the NOMNC was issued. The Business Office Manager and Traveling Business Office Manager reported that the facility did not request authorization from Kaiser for the resident’s continued stay after the hospital return and did not obtain an updated NOMNC with a new discharge date. Kaiser’s referral message on 3/21/23 documented a discharge date of 3/21/23 with 3/20/23 as the last covered day, and there was no documented authorization request by the facility. Relying on the unsigned NOMNC and without a Financial Responsibility Form or prior notification of non-covered services as required by the facility’s contract with Kaiser and its own policy on notice of covered and non-covered services, the facility billed the resident’s representative for three days of room and board and generated multiple collection letters before Kaiser ultimately paid the facility. This resulted in unnecessary billing, inconvenience, and potential emotional distress to the resident’s representative.
Improper Deduction of Medicaid-Related Insurance Premiums from Resident Funds
Penalty
Summary
Charges were imposed against a resident’s personal funds for items that were documented as being paid under Medicaid, specifically supplemental dental and vision insurance premiums. The resident was admitted with multiple chronic conditions including multiple sclerosis, functional quadriplegia, type 2 diabetes mellitus, epilepsy, major depressive disorder, anxiety disorder, and cognitive communication deficit. The resident’s record showed a Medicaid cost of care (COC) amount that was to be paid to the facility, and the supplemental insurance application indicated the monthly premiums were to be billed to the facility. The resident’s financial records showed repeated deductions from the resident’s personal funds account for insurance premiums, including multiple monthly premium withdrawals and an additional unexplained deduction. The facility also deducted an amount for COC that exceeded the documented COC amount. After these deductions, the resident’s account balance was reduced to a small remaining amount. The record review documented that the insurance premium deductions totaled $2,280.00 from the resident’s personal funds account, and the additional unexplained deduction brought the total deductions other than COC to $2,527.70. Interviews with the BOM, ARD, and the resident’s POA showed that the facility knew the supplemental dental and vision insurance was a Medicaid-related program and that the premiums were supposed to be handled through the facility’s COC arrangement, not from the resident’s personal funds. The BOM and ARD stated that the facility used the resident’s remaining account balance to pay overdue insurance premiums and back payments, and the ARD stated there was no documentation authorizing the facility to use the resident’s personal funds for those payments. The POA stated she was told the policy would be paid by the facility and would not affect the resident’s Social Security or Medicaid, and she later learned the facility had been making the payments from the resident’s account.
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