10.07.09.18

.18 Protection of a Resident's Personal Funds.

A. A resident has the right to:

(1) Manage the resident's financial affairs; or

(2) Choose any person who is willing to handle the resident's financial affairs.

B. Except as authorized by being appointed representative payee, a nursing facility may not manage a resident's funds without an express written request from:

(1) The resident; or

(2) An agent who has legal authority to make decisions regarding the resident's funds.

C. Management of Personal Funds. Upon written authorization of a resident or agent, a nursing facility shall hold, safeguard, manage, and account for the resident's personal funds that are deposited with the nursing facility as specified in this regulation.

D. Personal Funds in Excess of $50. A nursing facility shall:

(1) Deposit a resident's personal funds in excess of $50 in an interest-bearing account that is:

(a) Established and maintained by the facility under one of the following terms:

(i) In the name of the resident only;

(ii) In the name of the facility "in trust for" or as the "trustee" for the individual resident; or

(iii) In a residents' pooled account, with a separate accounting for each resident's share; and

(b) Located in a financial institution whose accounts are insured by the:

(i) Federal Deposit Insurance Corporation (FDIC);

(ii) Federal Savings and Loan Insurance Corporation (FSLIC); or

(iii) Other insurer approved by the Department; and

(c) Separate from any of the nursing facility's operating accounts; and

(2) Credit all interest earned to the resident's account at least quarterly.

E. Personal Funds Less Than $50. A nursing facility may maintain a resident's personal funds that do not exceed $50 in a petty cash fund or a non-interest-bearing account that is identified as a residents' account.

F. Establishment of Resident Accounts. When a nursing facility manages a resident's financial affairs, the nursing facility shall establish and maintain a system that:

(1) Ensures a full, complete, and separate accounting, according to generally accepted accounting principles, of each resident's personal funds entrusted to the nursing facility; and

(2) Precludes any commingling of resident funds with the nursing facility funds.

G. For all resident funds entrusted to a nursing facility, the facility shall:

(1) Establish and maintain adequate fire and theft coverage to protect a resident's funds that are on the premises of the nursing facility; and

(2) Otherwise ensure the security of all residents' personal funds deposited with the nursing facility by purchasing a surety bond with the State as obligee on behalf of the nursing facility residents.

H. Limitation on Charges to Personal Funds. A nursing facility may not:

(1) Impose a charge against a resident's personal funds for:

(a) An item or service for which payment is made under Medicare or Medicaid; and

(b) A cost or fee incurred by the facility for establishing and servicing the resident's accounts; or

(2) Use a Medicaid resident's personal funds to offset a contribution of care debt unless authorized by the resident, the resident's agent, or a court.