Misappropriation of Resident Funds Through Unauthorized Checks and Forged Signatures
Summary
The deficiency involves the facility’s failure to protect residents from misappropriation of their personal funds when an administrative staff member wrote checks and forged signatures on resident accounts without proper authorization. One resident had dementia with moderately impaired cognition, required assistance with most ADLs, and had a documented diagnosis of dementia. This resident’s EHR did not contain any written authorization from the resident or the resident’s representative allowing the facility to manage personal funds, as required by facility policy. Despite this, an administrative staff member assumed responsibility for the resident’s finances and engaged in financial transactions on the resident’s behalf. According to the facility’s investigation notes and staff and representative statements, the resident’s representative was contacted by the bank’s fraud department about suspicious checks drawn on the resident’s account and deposited into the administrative staff member’s personal account. The administrative staff member stated she had written a large check in the past to apply toward the resident’s liability to the facility and later wrote two additional checks for several hundred and over one thousand dollars each, made out to the facility in care of herself. She reported that she deposited these checks into her personal bank account, then took cash to the facility and placed it in a safe, claiming it was part of a spend-down process to help the resident qualify for Medicaid and to provide the resident with money after Medicaid started. The resident’s representative reported that the administrative staff member admitted depositing the checks into her personal account and said she planned to keep the money in a closet and return it to the resident after Medicaid began. Further review by the facility revealed two additional instances in which the same administrative staff member forged signatures to cash checks belonging to two other residents, resulting in misappropriation of smaller amounts from their accounts. The facility’s policies on abuse prevention and management of residents’ personal funds stated that residents have the right to be free from misappropriation of property and that any management of resident funds by the facility must be authorized in writing and documented in the resident’s EHR. In these cases, checks were written, signatures were forged, and resident funds were deposited into a staff member’s personal account without appropriate written authorization or adherence to the facility’s stated procedures for handling resident funds.
Penalty
Resources
Below are regulatory guidelines relevant to this citation:
A resident with cerebral infarction and cognitive communication deficit gave $280 to the Medical Records Manager after staff were asked to clean his apartment before discharge. Although the Administrator said the facility would pay staff and the resident would have no out-of-pocket expense, the Medical Records Manager accepted the money, placed it in her work bag, and did not refuse it at the time. Transportation staff reported seeing the exchange, and the DON later confirmed the funds had been returned to the resident.
An RN diverted controlled medications belonging to two residents, including pain meds ordered for a resident with dementia and a resident with multiple fractures and cognitive deficits. The RN was stopped by police after leaving work and was found with facility medications in the residents’ names. The DON stated that prior narcotic counts relied on matching log sheets and counting individual contents, and staff did not detect the missing meds because the corresponding narcotic logs were also absent.
Misappropriation of Resident Property: A resident with multiple chronic conditions and mild cognitive impairment had a debit card stolen and used without authorization by a facility employee. The resident’s daughter reported the missing card, the Administrator confirmed the unauthorized charge, and police later identified the employee using the card and arrested her.
An LPN documented PRN pain meds as given to multiple residents, but residents said they had not requested or received them. For one resident, pain assessments and blood levels were inconsistent with the MAR entries, and similar concerns were identified for several other residents involving controlled PRN meds.
A resident with moderate cognitive impairment and chronic pain had an oxycodone/APAP order with two 30-count cards received. Staff accounts showed the narcotic count sheet was altered, signatures were written on it, and the original paperwork was discarded. One CMA said she destroyed the wrong medication after believing it was discontinued and admitted she did not complete the required checks or have a second staff member present. The medication, card, and count sheet were never found after searches of the cart, trash, shred bins, and dumpster.
An employee admitted to taking money from petty cash and the Resident Trust cash box, and an audit confirmed shortages in both accounts. The employee self-reported the theft, and the record review documented the missing funds and the discrepancy between the ledger totals and the cash on hand.
Misappropriation of Resident Funds by Staff Member
Penalty
Summary
The facility failed to protect a resident from misappropriation of personal funds when the Medical Records Manager accepted $280 from Resident #60 for cleaning his personal apartment. The facility’s policy defined misappropriation of resident property as the deliberate misplacement, exploitation, or wrongful temporary or permanent use of a resident’s belongings or money without the resident’s consent, and the facility’s code of ethics prohibited accepting gifts or gratuities from a patient or family member. Resident #60 was admitted with diagnoses including cerebral infarction and cognitive communication deficit, and a quarterly MDS dated 3/11/26 indicated he was cognitively intact. The Administrator had asked the Activities Director and the former Medical Records Manager to clean the resident’s apartment before discharge, and the Administrator stated the facility would pay them so the resident would have no out-of-pocket expense. Despite this, the resident was later taken to the Medical Records Manager’s home while transportation staff were involved in moving him between locations related to his apartment and rent arrangements. Multiple staff accounts described the resident handing money to the Medical Records Manager at her home on 4/17/26. The Transportation Assistant stated she saw the resident reach into his pocket and give the Medical Records Manager money, and the Transportation Director stated the resident told him the money was because they were supposed to paint his apartment. The Medical Records Manager stated she accepted the money, put it in her work bag, and did not return it at the time. The DON stated the Medical Records Manager later returned $280 to the facility, and the money was counted back to the resident with a signed receipt. The facility’s investigation concluded the Medical Records Manager had accepted money from the resident, and the report identified this as the deficient practice.
Controlled medications from two residents were diverted by an RN
Penalty
Summary
The facility failed to protect residents from the wrongful use of their belongings or money when a staff RN diverted controlled medications belonging to two residents. Resident 68 was admitted with diagnoses including a right humerus fracture, pneumonia, and dementia, and had orders for Pregabalin and oxyCODONE for pain. Resident 73 was admitted with diagnoses including multiple left rib fractures, a left clavicle fracture, a history of traumatic brain injury, and cognitive communication deficit, and had an order for oxyCODONE-acetaminophen for pain. On 1/15/26, the State Survey Agency received a facility-reported incident stating that an RN was stopped by police after leaving work and was found in possession of medications from the facility in the names of the two residents. The facility stated the medications were returned and that the residents did not miss doses. The incident involved Resident 68’s Pregabalin and oxyCODONE and Resident 73’s oxyCODONE, which had been removed from the facility while the RN was working the night shift. The DON stated that prior to the incident, narcotic counts were based on reconciling the narcotic log sheet and manually counting individual contents in blister cards or patches, but the total units of narcotics in the cart were not manually counted. The DON also stated that discontinued narcotics were kept in the medication cart until collected for destruction, and staff did not notice the missing medications for Residents 68 and 73 during shift change counts because the corresponding narcotic log sheets were also absent.
Misappropriation of Resident Property
Penalty
Summary
The facility failed to protect a resident from misappropriation of property when the resident’s bank card was stolen and used without authorization by a facility staff member. The resident, who was admitted with diagnoses including diabetes mellitus, C. difficile enterocolitis, congestive heart failure, hyperlipidemia, ischemic cardiomyopathy, muscle wasting, hypertension, and GERD, also had mild cognitive impairment per the MDS. The resident was discharged from the facility on 3/7/26. The facility’s incident report documented that the resident’s daughter reported the debit card was missing, and the Administrator later stated that the daughter reported unauthorized use of the card. The Administrator said the card was used for a one-time $30 charge, and the incident had already been reported to police. The Administrator further stated that police later came to the facility and showed images of an employee using the resident’s card without authorization, and the employee was arrested on the spot. The facility’s Abuse Prevention and Reporting policy stated its purpose was to prevent abuse, neglect, exploitation, misappropriation of property, deprivation of goods and services by staff, and mistreatment of residents.
PRN Medications Documented as Given but Not Actually Administered
Penalty
Summary
The facility failed to ensure the safety and security of resident property, specifically PRN medication, after it was discovered that an LPN was not actually giving PRN medications to assigned residents even though the medications were being documented as administered on the MAR. During the survey process, residents were asked about their PRN medication needs and use, and multiple residents stated they had not requested those medications despite the charting showing they had been given. This led the facility to investigate whether diversion was occurring. For Resident #64, the facility reviewed the MAR and pain assessments and found that the resident’s daily pain was generally documented as zero to one out of ten, while the PRN pain scale entries on the days in question showed pain levels of five to seven out of ten before medication administration and zero out of ten afterward. The facility also obtained blood work with the resident’s permission, which showed only trace amounts of pain medication in the resident’s system, inconsistent with the documented administrations. Similar concerns were identified for other residents, including Residents #1, #15, #39, #56, and #65, involving controlled PRN pain medications.
Missing Narcotic Medication and Altered Count Record
Penalty
Summary
The facility failed to protect a resident from misappropriation of property when a prescribed narcotic medication became missing from the facility. Resident #6 had moderate cognitive impairment with a BIMS score of 12 and diagnoses including intervertebral disk degeneration with lumbar and lower extremity pain. The resident had an order for oxycodone/acetaminophen 10/325 mg, 1 tablet by mouth twice daily, and the MAR and narcotic record showed two separate 30-count medication cards were received for the resident. The narcotic record and staff interviews showed that the medication count became inconsistent after the medication cards were handled on the medication cart. One staff member stated she received two narcotic cards for the resident and counted 60 tablets total with another nurse at shift change. Another staff member later stated she found the count sheet incorrect and reported that the count was off by a whole card of 30 tablets. The staff accounts also showed that the count sheet had been altered, with signatures written on it and the original paperwork no longer available. Staff interviews further showed that one CMA stated she destroyed the wrong narcotic medication after believing it had been discontinued in the EHR, and she admitted she did not complete the required checks before destroying it. She stated she removed the tablets, discarded the bubble pack in the medication cart trash, and placed the top of the medication card in the shred bin. Other staff stated narcotic destruction required two nursing staff present, but the medication and related paperwork for the resident were not found after searches of the carts, trash, shred bins, and dumpster. The Administrator stated the resident’s oxycodone/acetaminophen prescription had to be replaced because the medication was never found and had been removed from the facility.
Misappropriation of Resident Funds by Employee
Penalty
Summary
The facility failed to protect resident funds from misappropriation when an employee admitted to taking $40.00 from petty cash and $240.00 from the Resident Trust cash. The incident occurred when the employee called to self-report that she had borrowed the money from both accounts. A statement from the employee confirmed the taking of the funds, and an audit of the financial records showed discrepancies in both the petty cash and Resident Trust cash box balances. The record review showed the petty cash General Ledger total was $200.00 while the actual cash counted was $159.65, with a cash withdrawal of $40.35 noted. The Resident Trust Cash Box General Ledger total was $250.00 while the actual cash counted was $10.00, with a cash withdrawal of $240.00 noted. The corporate Senior Financial Analyst later reviewed the accounts and found no additional missing funds. The report also states that the employee was terminated and a police report was filed after the theft was reported.
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