Avoid Trouble with AHCA: Managing Resident Payee Funds the Right Way

Assisted living facilities (ALFs) play a crucial role in providing care and support to residents, many of whom rely on Social Security and other benefits for their expenses. However, facilities can easily find themselves in hot water if they do not comply with regulations related to managing residents’ funds. Many facilities assume that once Social Security payments are set up to automatically deposit into the facility’s account, no further action is needed. This common misconception can lead to significant compliance issues. Let’s break down what the regulations require and how facilities can avoid costly mistakes.

When a facility receives funds or property belonging to a resident, those funds are considered trust funds. According to regulations, these funds must be kept separate from the facility’s own finances and from other residents’ funds. This can be done by either keeping a separate account or specifically crediting the funds to the resident.

1.Separate Accounts: The facility cannot mix a resident’s money with its own or with other residents’ funds.

2.Restricted Use: These funds must only be used for the benefit of the specific resident.

The Regulation:

Facilities are required to provide residents (or their guardian, trustee, or conservator) with a detailed statement every 3 months. This statement must show all the funds received on behalf of the resident, their sources, and how those funds were used. Additionally, these statements must be provided:

•Annually (once a year).

•Upon the resident’s discharge or transfer to another facility.

•To government or charitable agencies contributing to the resident’s account annually and upon discharge.

1.Failure to Provide Quarterly Statements:

•Many facilities fall into a routine where they rely on automatic Social Security deposits into their accounts. This leads them to overlook the requirement of sending out detailed statements every three months.

•It’s easy to assume that since payments are coming in automatically, there’s no need for invoicing or statements. However, this assumption is incorrect and can result in non-compliance with state regulations.

2.Lack of Documentation:

•Even when statements are issued, facilities often forget to document proof that residents received these statements. In the event of an audit, not having a resident’s signature as confirmation of receipt can be seen as a compliance failure.

3.Improper Use of Trust Funds:

•Using a resident’s trust funds for expenses not directly benefiting that resident is a serious violation. This can occur unintentionally when funds are not properly separated or tracked.

1.Implement a Tracking System:

•Use software to automate the creation of quarterly statements. This will help ensure that every resident receives a detailed report on time, reducing the chance of forgetting.

2.Require Signed Acknowledgements:

•After issuing the quarterly statement, ask the resident (or their guardian) to sign off confirming receipt. Keep these signed acknowledgments on file as proof.

3.Regular Internal Audits:

•Conduct quarterly internal audits to ensure that all resident trust funds are being managed correctly, statements are being sent on schedule, and all required documentation is in order.

4.Staff Training:

•Train staff on the importance of handling resident funds properly. Make sure they understand that failing to comply with these regulations can lead to fines, penalties, or even legal action against the facility.

In summary, managing resident funds properly is not just a regulatory requirement—it’s a responsibility that ensures trust and transparency between your facility and its residents. By setting up the right systems, documenting every transaction, and staying vigilant, facilities can avoid unnecessary penalties and maintain a high standard of care.

Remember: Delaying compliance tasks or assuming they’re not necessary can put your facility at risk. It’s often simpler and quicker to handle compliance properly upfront than to deal with the consequences of non-compliance later.

ALF BOSS: Improving Assisted Living Compliance and Marketing

I hope this article helps you inform facilities of the risks associated with improper handling of resident funds and empowers them to stay compliant! Would you like any additional sections or modifications?