Nearly half the states do not require background checks for nursing home office workers who handle residents' trust accounts, and only a handful of states require that those accounts be audited.

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WASHINGTON — Many states do not require criminal background checks on nursing home staff who manage residents' trust funds, and few demand audits of those accounts – a regulatory gap that contributes to scores of cases in which the money is stolen or mismanaged.
Nearly every state requires background checks for nursing home staff in caregiving roles, but 20 states don't apply that requirement to office workers who do not routinely have direct patient contact, a USA TODAY review of state laws finds. Those office employees typically manage the trust accounts that nursing homes must maintain for residents who request that the facility safeguard their money.
In an investigation published in October, USA TODAY found that thousands of nursing home residents have had their savings stolen while held in the trust accounts, usually by business managers, bookkeepers and other office staff. Because the accounts generally don't have to be audited, those crimes often go undiscovered for months, even years, and the thefts can reach hundreds of thousands of dollars.
"Obviously, this is a problem that should be addressed, and obviously it's one that hasn't been addressed very well," says Janet Wells, former director of public policy for the National Consumer Voice for Quality Long-Term Care.
Federal law provides the regulatory framework for the nation's 16,000 nursing homes, which have to meet an array of standards to participate in Medicare and Medicaid. Federal rules do not require audits for resident trust fund accounts, and most states take the same approach.
The U.S. Centers for Medicare and Medicaid Services, the federal agency responsible for nursing home regulation, is considering whether additional oversight is needed to address theft and mismanagement of residents' funds.
"We are aware of this situation and are reviewing the (inspection) procedures used to detect these kinds of problems," agency spokesman Aaron Albright said when asked about USA TODAY's findings. "CMS takes safeguarding nursing home patients very seriously."
In addition to the four states that require audits of resident trust accounts, USA TODAY identified four others that mandate partial or occasional audits, such as periodic reviews of a sampling of a facility's trust fund records.
Greg Crist, senior vice president of the American Health Care Association, a nursing home industry trade group, notes that many nursing home operators audit trust accounts themselves as a matter of practice. He says many also do background checks on all staff, regardless of their duties.
"Several (chains) across the country have made the decision to just build these practices into their business model," Crist says.
Nursing homes are required to maintain a surety bond for resident trust accounts, Crist adds, so any funds that are lost or stolen ultimately should be repaid. Still, he says, such crimes should never happen, and the association has launched initiatives to raise awareness and improve training and oversight of staff who manage the funds.
USA TODAY's investigation identified more than 1,500 cases since 2010 in which state or federal inspectors cited nursing homes for failing to pay interest on the accounts, failing to account properly for their holdings, and failing to keep the funds properly insured.
The newspaper also documented scores of cases in which nursing home employees stole money for everything from shopping and gambling sprees to routine household expenses. In many cases, the problems could have been caught far sooner or avoided altogether if audits and background checks were routine practice.
Last year, for example, Joseph Feagin Jr. was convicted on charges that he stole more than $115,000 from resident trust accounts while working as a financial specialist at Wetumpka (Ala.) Health and Rehabilitation Center. During the investigation, the state attorney general's office found that the facility was unaware that Feagin had been convicted in a first-degree theft case in another county and was on probation.
This year, Virginia Soules was convicted on charges that she stole $140,000 from trust funds for multiple residents while working as an accounting clerk at Meridian Manor in Waterbury, Conn. After the nursing home's office manager discovered suspicious checks were being drawn from trust funds, the facility commissioned a forensic audit that revealed Soules' thefts had gone undetected for a year.
After USA TODAY's investigation, Sen. Bill Nelson, D-Fla., chairman of the Senate Committee on Aging, asked the inspector general at the Department of Health and Human Services to examine whether sufficient oversight is in place to make sure nursing homes properly manage resident funds.
Citing trust fund theft cases uncovered by the newspaper, Nelson noted in his request letter that "several of these … culprits were caught merely by accident or due to the suspicions of a co-worker, and not by systemic financial auditing or tight management controls."
The inspector general's office has not announced how it will proceed.
Contributing: Morgan Fecto and Dan Singer