Johnna Scanlon-Howland, a former office worker at the Sunrise Nursing Home, a facility located in Oswego, New York, was convicted in July 2013 of stealing $45,363 from the resident trust account at the nursing home. Investigators from the state’s Medicaid Fraud Control Unit (MFCU) stated that Scanlon-Howland falsified business records to make unauthorized withdrawals from residents’ accounts. She then spent the stolen money on personal purchases. In a similar incident in June 2013, Jodi Montenaro, a business manager at the Dutch Manor Nursing and Rehabilitation Center, a facility based in Schenectady, was convicted of stealing $4,450 from the resident trust account. Montenaro used some of the stolen funds to pay her personal bills.
When a patient enters a nursing home, he or she can deposit money into a trust account. The patient can then withdraw the money to pay for basic living expenses such as a haircut or personal hygiene products. The accounts accrue interest and are managed by the nursing home, which should issue regular statements much like a bank would. The accounts are insured in the event the funds are stolen or mismanaged. However, a USA Today investigation conducted in 2013 discovered that thousands of residents had their funds stolen by nursing home employees who used the money to pay for personal shopping sprees and gambling outings. In addition, the investigation uncovered that most states do not require routine audits of resident trust accounts, which can allow fraud to occur over a long period of time.
While nursing homes conduct criminal background checks for health care workers, 20 states currently do not require such checks to be extended to office workers, who often handle resident trust accounts. In one case, a nursing home business manager in Alabama stole $115,000 while he was on probation for stealing. The USA Today report also pointed out that some nursing homes fail to carry insurance to cover a potential loss to resident accounts.
In an attempt to address these issues, U.S. Senator Bill Nelson asked the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees nursing homes, to require that nursing facility inspectors conduct annual audits of resident trust accounts, In a letter to the agency, Nelson wrote, “CMS does not require state agencies to train surveyors on how to identify improper or suspicious withdrawals from these accounts, nor is it clear that the surveyors are required to look for this type of problem. I ask that you require…that surveyors be provided with the training they need to detect improper expenditures from these trust funds, and that these withdrawals be routinely reviewed.”
Greg Crist, senior vice president of the American Health Care Association, stated that most nursing homes already conduct routine audits of resident accounts as part of their own internal financial controls system.