Understanding the Importance of Nursing Home Resident Trust Accounts
Are Your Resident’s Trust Accounts Properly Monitored?
Read below for a short list of key facts and best practices that nursing home facilities and operators should be aware of.
Over the years, resident funds accounts are one of the most commonly audited events that occur in the provider community. So common that we feel it’s important to review the key facts and practices relating to Resident Funds Accounts.
What Is a Resident Trust Account?
Let’s start with the basics, a resident trust account is a bank account in the name of the nursing facility which is utilized to manage finances for a resident. It is common practice for a facility to have a single bank account that individually tracks each resident’s balance and transactions. This is typically an interest-bearing account for the residents’ benefit. The interest is allocated to residents based on each resident’s balance as a percentage of total resident funds.
Residents are not required to set up a resident trust fund account with the facility, but must be offered the opportunity. Residents opting in do not relinquish financials decisions on their behalf to the facility; each resident, or possibly a family member, retains the right to determine how the funds will be spent.
Resident trust funds should be tracked on a regular basis, as it is very common for nursing home residents to receive Medicaid benefits. Any resident who exceeds the maximum threshold for Medicaid eligibility can lose their Medicaid benefits. Losing Medicaid eligibility will change a resident’s payer source from Medicaid to private pay, which could result in a bad debt expense.
Many states commonly perform audits of resident trust accounts, which can also uncover circumstances leading to loss of Medicaid eligibility. It is best practice to establish a monitoring policy and procedure for notifying family members if a resident’s account reaches a certain dollar threshold, in order to ensure the Medicaid threshold is not exceeded.
Having proper policies, procedures and controls will help safeguard resident funds, including segregation of duties, spend down forms, and internal audits.
In the event of a resident’s passing, remaining funds must be returned to whomever is in charge of the estate within 30 days of resident’s passing. The remittance should also be accompanied by a final report verifying the correct amount of funds.
Resident trust accounts may be a small item on the books of a nursing facility, but there could be larger implications if not tended properly. Proper distribution of interest to residents, effective policies and procedures to safeguard the assets, and ensuring balances comply with Medicaid eligibility maximum thresholds are just a few of the reasons why it is important to monitor and manage resident trust funds on a regular basis.
