The Tennessee Comptroller’s Office has completed a Medicaid examination of a nursing home in Antioch, with the report released on August 29, 2024. The review covered the facility’s financial operations for the years 2022 and 2023, and auditors identified six key findings related to the facility’s financial management.
A significant issue was the failure to refund credit balances for 93 deceased or discharged residents, totaling $139,057.56. Out of this amount, $83,421.59 should be returned to the residents or their authorized representatives, while $55,635.97 is owed to the Medicaid Program.
The examination also uncovered problems with the management of trust fund accounts. Specifically, the facility did not properly allocate certain trust fund dollars to residents’ subsidiary ledgers, and it was found that the trust fund balances of 10 residents exceeded the Medicaid resource limit of $2,000.
Additionally, the report noted that the facility had included $281,025.14 in nonallowable expenses on its 2022 Medicare Cost Report and $26,545.33 in nonallowable expenses on Schedule C of its Medicaid Supplemental Cost Report. These nonallowable expenses comprised unsupported, unpaid, and non-care-related costs, potentially impacting the Medicaid reimbursement rate the facility receives.
Compliance Perspective
Issue
Under federal regulations, nursing homes must follow specific rules for refunds and managing resident funds. According to F582, if a resident dies, is hospitalized, or is transferred and does not return, the facility must refund any deposits or charges already paid, minus the per diem rate for the days the resident occupied or reserved a bed. This refund must be issued within 30 days to the resident, their representative, or their estate. F571 mandates that nursing homes cannot charge a resident’s personal funds for items or services covered by Medicaid or Medicare, except for applicable deductibles and coinsurance. Nursing homes must also accurately report expenses related to resident care and operations. Nonallowable expenses, such as unsupported, unpaid, or unrelated costs, should not be included in Medicare Cost Reports or Medicaid Supplemental Cost Reports. Errors in reporting can affect Medicaid reimbursement rates and lead to financial penalties. Furthermore, nursing homes must manage resident trust funds properly. Trust fund balances should be correctly allocated to residents’ subsidiary ledgers, and no resident’s trust fund balance should exceed the Medicaid resource limit of $2,000. Proper management is essential for compliance with Medicaid regulations and for protecting residents’ financial interests.
Discussion Points
- Review policies and procedures to ensure they address the accurate and timely refund of credit balances for deceased or discharged residents, as well as the correct allocation and reporting of expenses. Also Include clear guidelines for managing resident trust funds, making sure balances are properly allocated and do not exceed the Medicaid resource limit of $2,000.
- Train appropriate staff on your policies and procedures for managing refunds, logging expenses, and handling trust funds. Ensure staff are not charging residents for items and services which are covered under Medicaid or Medicare and that accurate records are kept.
- Audit billing practices to ensure compliance with state and federal regulations, focusing on the accuracy of charges and the exclusion of nonallowable expenses. Verify that refunds are issued promptly and in accordance with regulatory requirements, checking that all necessary documentation is complete and accurate. Implement regular reviews of trust fund management practices to ensure they adhere to the Medicaid resource limit and are correctly recorded.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
