Missing Documentation for Resident Funds Surety Bond
Summary
The facility failed to ensure a Surety Bond was in place to protect resident personal needs account funds held by the facility. During the entrance conference, the surveyor requested the facility’s Surety Bond, and a facility-provided Surety Bond Report showed “no bond on file” for the insurance carrier. When asked about the report, the LNHA stated that the facility had a Surety Bond and would provide it. The LNHA later provided documents including a Power of Attorney dated 12/11/23 and a Verification Certificate for Indefinite Term Surety Bond stating that sufficient premium had been paid to satisfy the carrier’s requirements through 2/28/25. When the surveyor questioned the bond documentation, the LNHA stated corporate had sent the bond and that it was indefinite. The next day, the LNHA provided additional bond documents dated 8/27/25, and the BOM stated she was new, was working with the Regional Business Office Advisor, and had to have the Regional print the bond because she could not locate it. The BOM stated she did not know about the surety bond as of yet. The surveyor notified the LNHA, DON, and Clinical Lead of New Jersey that the facility did not have documented evidence that the Surety Bond was in effect from 2/28/25 until surveyor inquiry.
Penalty
Resources
Below are regulatory guidelines relevant to this citation:
The facility failed to ensure its surety bond named only the residents as the obligee. Review of the prior bond showed the obligee was listed as the residents of Spring Hill Rehabilitation Center or unto the Commonwealth of Pennsylvania, and the NHA confirmed the bond was not limited to residents only.
Surety Bond Did Not Cover Resident Trust Funds: The facility failed to ensure its surety bond covered the total amount in resident trust fund accounts. The Resident Trust Fund policy required bond coverage at least equal to resident funds and quarterly review by the BOM, but the current bond was $150,000 while monthly statements showed the resident fund balance exceeded that amount in most months reviewed. The BOM confirmed the bond was insufficient and stated the Regional Account Manager was aware, but no documentation of that notification was provided.
Resident trust funds were not fully covered by adequate surety bond protection. The business office manager confirmed the resident personal funds account balance totaled $40,688.56 for 34 residents, while the CFO confirmed the bond penalty amount was only $10,000 and said it should have been $100,000. Review of the bond and rider showed the lower coverage was in effect before the rider increased it, despite facility policy requiring a surety bond to secure all resident personal funds.
Insufficient Surety Bond for Resident Funds: Facility staff failed to maintain a surety bond large enough to secure resident funds held by the facility. Review of the trust fund account showed an average monthly balance that required a bond of $75,000 or more, but the facility only had a $70,000 approved non-cancelable Escrow Agreement Account. The BOM and administrator both stated they were responsible for resident funds and were not aware the bond was insufficient.
The facility failed to keep a surety bond large enough to cover resident funds managed by the facility. Review of the resident fund account showed balances above the $200,000 bond amount, and the RNC could not provide documented evidence of a bond covering those balances.
The facility failed to secure resident personal funds with a surety bond large enough to cover the total amount managed for 27 residents. Records showed resident account balances totaled far more than the bond limit, and the Corporate Director of Operations confirmed the bond was below the amount needed when the accounts were reviewed.
Surety Bond Listed Incorrect Obligee
Penalty
Summary
The facility failed to ensure that the surety bond listed the obligee as only the residents of the facility. Review of the facility’s previous surety bond showed that the obligee was listed as "the residents of Spring Hill Rehabilitation Center or unto the Commonwealth of Pennsylvania," rather than residents only. During an interview, the Nursing Home Administrator confirmed that the facility failed to list the obligee as only the residents of the facility.
Surety Bond Did Not Cover Resident Trust Funds
Penalty
Summary
The facility failed to ensure that its surety bond covered the total amount of money in residents’ personal fund accounts. Review of the facility’s Resident Trust Fund policy showed the bond was required to be at least equal to the total amount of residents’ funds as of the most recent quarter, and that the BOM was to review the bond amount quarterly for adequate coverage. The facility’s current surety bond was $150,000, but review of monthly resident fund statements from 11/30/2025 through 05/19/2026 showed that six of seven months exceeded the bond amount. As of 05/19/2026, there were 101 resident accounts with monies. During interview, the BOM confirmed the bond did not cover the amount currently in the resident personal fund account and stated the Regional Account Manager was aware, but no documentation was provided showing notification to the Regional Account Manager.
Resident Trust Funds Not Fully Covered by Surety Bond
Penalty
Summary
Assure the security of all personal funds of residents deposited with the facility was not maintained because the facility did not ensure resident personal fund accounts were insured with adequate surety bond coverage to cover the total account balance. During interview and document review, the business office manager confirmed the residents' personal funds accounts totaled $40,688.56 for 34 residents. The CFO confirmed the facility's surety bond for resident personal funds identified a penalty amount of $10,000 and stated the bond should cover $100,000, noting they needed to contact their insurance representative for clarification. Review of surety bond number 2653018 showed a $10,000 bond in effect from 7/23/25 through 7/23/26, and a rider dated 4/23/26 showed the bond increased from $10,000 to $100,000 effective 4/23/26. The facility policy stated it would maintain a surety bond to assure the security of all resident personal funds deposited with the facility.
Insufficient Surety Bond for Resident Funds
Penalty
Summary
Assure the security of all personal funds of residents deposited with the facility was deficient because facility staff failed to purchase a surety bond in an amount sufficient to cover all resident funds held by the facility. The facility census was 44.1, and review of the resident trust fund account for March 2025 through February 2026 showed an average monthly balance of $47,132.42, which required a surety bond of $75,000 or greater. Review of the DHSS database showed the facility had an approved non-cancelable Escrow Agreement Account in the amount of $70,000. During interviews, the BOM stated he/she was responsible for resident funds and ensuring the bond was sufficient but was not aware it needed to be increased, and the administrator stated the BOM was responsible for resident funds and ensuring the surety bond was sufficient but was not aware the bond was insufficient.
Insufficient Surety Bond Coverage for Resident Funds
Penalty
Summary
The facility failed to ensure the surety bond amount was sufficient to cover the total resident funds held by the facility. A review of the resident fund checking account from January 2026 through March 2026 showed the aggregate resident account fund managed by the facility was $216,243.06 on February 3, 2026, and $208,438.08 on March 3, 2026. The facility’s surety bond, which had been in place since November 1, 2020, was $200,000.00 and did not cover the resident fund balances on those two dates. During an interview on March 18, 2026, at 1:30 PM, the regional nurse consultant reviewed this information and was unable to provide documented evidence that a surety bond was in place in February 2026 or March 2026 to sufficiently cover facility-managed resident funds.
Insufficient Surety Bond for Resident Funds
Penalty
Summary
The facility failed to assure the security of resident personal funds deposited with the facility because it did not have a surety bond covering the total amount of resident funds it managed. Review of the facility’s surety bond showed coverage up to $35,000, while review of the resident accounts listing showed the facility managed funds for 27 residents, with a total balance of $83,396.36. The amount of resident funds exceeded the bond coverage by $48,396.36. During interview, the Corporate Director of Operations confirmed that the facility realized the bond was insufficient when it ran the resident accounts report and that the surety bond limit increase from $35,000 to $100,000 was completed on 02/18/26.
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