Financial Abuse and Suspected Fraud Scheme Uncovered During Payee Review.  Results in Criminal Complaint and Scrutiny from SSA

During the representative payee audit of a Skilled Nursing Facility (SNF), a staff member at the facility disclosed to the OPRABA compliance investigator that multiple employees had orchestrated the theft of hundreds of thousands of dollars from residents.

According to the whistleblower, the California Department of Public Health (CDPH) completed an investigation of the SNF, but their audit was incomplete and only revealed a fraction of the funds stolen. As a result, few if any residents received reimbursements from SNF and the facilitator of the conspiracy went on to hold a comparable position at another facility, despite her demonstrated history of robbing vulnerable residents.

The compliance investigator then referred the whistleblower’s report to the Disability Rights California’s Investigations Unit, which has since corroborated several of the allegations through resident and witness interviews as well as financial records reviews. The IU found additional schemes to defraud, including a Medi-Cal hospice care practice of recycling residents to and from hospice to increase their billable service to Medi-Cal. DRC filed a complaint with the Department of Medi-Cal* Fraud & Elder Abuse (DMFEA) with the state Department of Justice. SSA is currently scrutinizing the SNF while a criminal investigation in ongoing.

An OPRABA compliance investigator conducted a review of a skilled nursing facility and uncovered several problematic recordkeeping practices during the audit.

The facility was over-billing their residents. For one resident beneficiary, Roger, the payee ledgers revealed withdrawals for care cost that were in full amount of the beneficiary’s monthly Social Security while other months there were no withdrawals. Further financial records review did not reconcile with the amounts withdrawn from the beneficiary’s trust account for his Share of Cost indicating that the facility had overcharged Roger by several thousand dollars each month.

OPRABA also found that the payee failed to properly safeguard beneficiary information. The facility was found in violation with their own internal security policies a resident funds were found unsecured in their offices. This security failure included financial documentation and medical records left out in public view. In addition, several large purchases marked as “personal needs items” were made for Roger yet lacked supporting documentation such as detailed receipts or monthly bank statements to show that they were meant for him.

While the payee reported that personal needs purchases were given to Roger to deposit into his personal account, the payee was unable to provide any documentation to confirm that those funds were received by Roger. Roger also reported that he never received “personal needs items” that the facility claimed it purchased for him.  During subsequent questioning of the facility’s business office manager (BOM) about our findings they indicated that they were concerned with some of the recordkeeping and financial practices that they noticed during their time working at the facility.  The BOM agreed to work with the compliance investigator as a whistleblower after they left employment at the facility.

OPRABA eventually filed a complaint with the California Department of Public Health (CDPH) and the Long-Term Care Ombudsman outlining the findings of the review and the numerous alarming deficiencies and poor practices. CDPH later substantiated the allegations in our complaint and opened their own investigation into the facility and their practices. 

A financial misuse allegation was also submitted to SSA due to the suspected employee theft that was exposed as part of OPRABA’s investigation. SSA later substantiated the misuse allegation and referred it to the Office of Inspector’s general (OIG) for further criminal investigation.