Colorado Assisted Living Association (CALA)

–Tom Kinrade, CALA President (Excerpt from the CALA March 2010 Newsletter)
“I have a pet peeve”.

It’s a problem that most ALF owners have already had to deal with or will have to deal with in the future. It’s a serious problem for some of our elderly residents and probably going to get worst as the U.S. recession continues.

The problem: Financial Manipulation and Abuse of the Elderly.

This involves unauthorized use of an elderly person’s funds or property by a family member. An unscrupulous family member may misuse an elder’s personal checks, credit cards and accounts; steal cash, or income checks. Co-mingle the elder’s funds or forge the elder’s signature and even engage in identity theft.

According to the adult protection agency: “Caretakers and loved ones typically start with small crimes, such as stealing jewelry and blank checks, before moving on to larger items: coercing confused seniors to sign over the deeds to their homes, change their wills or liquidate their assets. “Because of Alzheimer’s, dementia or overmedication, [elders] don’t know one document from another and sign whatever is in front of them.” The adult protection agency also reports that even when caught, prosecuting a family member can be extremely difficult. “Family members have a built-in defense if they get caught, which is ‘Oh, she wanted me to have all that money’, it’s hard to overcome that defense. We need to prove the individual didn’t have the capacity to understand.”

Our company had financial losses of over $35,000.00 in 2009 due to family caretakers and POA’s misappropriating resident’s funds.

The scenario usually goes something like this: The resident is private pay, the POA reports that the resident is running out of funds and will have to go on Medicaid soon. The Medicaid process is started and as the case manager investigates, she finds some very strange transactions have taken place with the resident’s accounts. We had one case where all the resident’s funds were put into the son’s personal account, including over $150,000 from the sale of the resident’s home. Those funds were then used by the son for his personal expenses. The State denied the Medicaid claim for a period of two years. Meanwhile there are no funds available to pay for the residents care. In another case the daughter, who was the POA, used the resident’s funds to remodel her (the POA’s) personal condo. It started out as a loan but when the daughter lost her job the funds ran out too. The resident is the biggest loser in these cases; she/he is left with no money and no home. The facility ends up with a non-paying resident and a problem of where to go next.

How do you protect yourself as a business owner? Most of our friends with large facilities have financial departments with policies that guard against such loses. It’s the small to medium size ALF’s that I see having the biggest problem. We don’t always dig deep enough into the financial records of the resident. Usually it’s just a question like “do you have funds”. If the answer is yes, the resident moves in.

You have to protect yourself and your business. You have to know about the resident’s financial situation. Ask questions, you have a right to know. You also have to know the warning signs of trouble. The key is to identify the problem and act upon it before it is too late. Are checks bouncing, are payments starting to come in late? These are signs of trouble to come. If you suspect at problem with financial abuse get the adult protection agency involved. It’s your job to protect your residents.