Section 325.20115. Patient trust funds.

(1) A nursing home shall develop a policy regarding the holding of monies in trust for patients. A representative payee, unless authorized in writing by the patient or patient guardian, shall not function as the person designated to handle the personal property of the patient for purposes of this rule. The policy established by the nursing home may provide that the home will not handle monies of any patient which

exceed the sum of $5,000.00. A home may charge a reasonable fee, not to exceed the actual cost of providing the service, the fee charged to other patients, or the amount of interest which accrues all trust monies deposited for such patients for whom the service is provided. In the case of patients who are physically or mentally incapable of handling their own money and who do not have a legal guardian or other person designated in writing to handle the personal property of the patients, the home may charge a fee as specified in this rule.

(2)    At the time of admission, a nursing home shall provide each patient and the patient's legal guardian or designated representative with a written statement which states all of the following:

(a)    That there is no obligation for the patient to deposit his or her funds with the facility.

(b)   The patient's rights regarding personal funds, including, at a minimum, all of the following:

(i)   The right to receive, retain, and manage his or her personal funds or to have this done by a legal guardian, if any.

(ii)    The right to apply to the social security administration to have a representative payee designated for purposes of federal or state benefits to which he or she may be entitled.

(iii)     The right to designate, in writing, another person to act for the purpose of managing his or her personal funds.

(iv)    The right to authorize, in writing, the nursing home to hold, safeguard, and account for the patient's personal funds in accordance with state law and the nursing home policy.

(c)   The nursing home's policy for handling patient funds shall include the provision that it will provide the service of holding monies in trust for persons who are incapable of handling their own funds and who have no guardian or designated representative to provide the service.

(d)    In summary form, the home's procedures for handling, accounting for, and giving access to, monies held in trust for patients.

(3)   A nursing home shall establish written procedures for implementing its policies for handling patient funds in trust. The written procedures shall cover, at a minimum, all of the following items:

(a)   How and where trust fund records will be kept.

(b)    Patient or patient representative access to records, including the times when access is normally permitted.

(c)   Periodic statements of account.

(d)  Interest on account monies.

(e)   Access to funds held within and outside the facility.

(f)  How to get information regarding trust fund services.

These written procedures shall be made available for inspection by patients and patient representatives, upon request, during normal business hours.

(4)   For each patient whose funds it holds, safeguards, and accounts for, the facility shall meet all of the following requirements:

(a)     The nursing home shall maintain current, written, individual records of all financial transactions involving patients' personal funds which the facility has been given

for holding, safeguarding, and accounting. The facility shall keep these records in accordance with the American institute of certified public accountants' generally accepted accounting standards, and the records shall include, at a minimum, all of the following:

(i)   The patient's name.

(ii)   Identification of the patient's representative, if any.

(iii)   Admission date.

(iv)   Date and amount of each deposit and withdrawal.

(v)   The name of the person who accepted withdrawn funds.

(vi)   The balance after each transaction.

(vii)   Receipts indicating the purpose stated by the person withdrawing the funds for which the withdrawn funds were to be spent, except that a patient may withdraw his or her own funds without stating a purpose for the withdrawal.

(viii)   The patient's earned interest, if any.

(b)     The home shall provide each patient reasonable access to his or her own financial records, including not less than 2 hours each business day during normal business hours.

(c)   The facility shall provide a written statement, at least quarterly, to each patient or patient representative. The quarterly statement shall reflect any patient funds which the facility has deposited in an interest-bearing account or a non-interest-bearing account, as well as any patient funds held by the facility in a petty cash account. The statement shall include, at a minimum, all of the following:

(i)   The balance at the beginning of the statement period.

(ii)   Total deposits and withdrawals.

(iii)   Interest earned, if any.

(iv)     Identification number and location of any account in which the patient's personal funds have been deposited.

(v)   The ending balance.

(vi)    The sources, disposition, and date of each transaction involving the patient's funds during the statement period.

(d)      The home shall keep any funds received from a patient for holding, safeguarding, and accounting separate from the facility's funds and from the funds of any person other than patients. Trust funds held by the home for patients may be pooled in an interest-bearing account, as provided in these rules, if individual records are kept and the other requirements of these rules are followed to assure that the funds of each patient are accounted for separately.

(e)   A nursing home may keep up to $200.00 of a patient's money in anon-interest- bearing account or a petty cash fund. The home shall, within 15 days, deposit in an interest-bearing account any funds in excess of $200.00 from an individual patient. The account may be individual to the patient or pooled with other patients. The account shall be in a form that clearly indicates that the facility does not have an ownership interest in the funds. The account shall be insured under federal or state law. At the election of the nursing home, the interest earned on any pooled interest-bearing account shall be distributed in either of the following ways:

(i)   Prorated to each patient on an actual interest-earned basis.

(ii)   Prorated to each patient on the basis of his or her end-of-quarter balance.

(f)   At a minimum, in the case of patient monies held in a petty cash fund by the facility, a patient shall have access to his or her funds during normal business hours. The facility shall, upon request or upon the patient's transfer or discharge, return to the patient, the legal guardian, or the designated representative all or any part of the patient's personal funds which the facility has received for holding, safeguarding, and accounting and which are maintained in a petty cash fund. For a patient's personal fund that the facility has received and deposited in an account outside the facility, the facility, upon request or upon the transfer or discharge of the patient, shall, within 3 business days, return all or any part of those funds to the patient, legal guardian, or designated representative.

(5)    When a nursing home is serving as a representative payee under the social security act or otherwise receives monthly benefits to which the patient is entitled, it shall fulfill its duties as a representative payee in accordance with federal rules. Except for the patient care portion of such monthly benefits, the home shall deposit all such funds in excess of $200.00, as provided in subrule (4)(e) of this rule, in the patient's trust account. Payments of amounts due from the patient to the nursing home or others shall be made from the patient's trust funds only upon the authorization of the patient or the legal representative of the patient. The home shall not interfere with the right of a patient or patient's representative to control all monies or benefits paid to the patient other than that portion of benefits designated for patient care.

(6)   Upon the sale or other transfer of ownership of the nursing home, the home shall provide the new owner with a written accounting, prepared in accordance with the American institute of certified public accountants' generally accepted auditing procedures, of all patient funds being transferred and shall obtain a written receipt for those funds from the new owner. The facility shall also give each patient or his or her representative a written accounting of a personal fund held by the facility before any transfer of ownership occurs.

(7)   A nursing home shall provide the executor or administrator of a patient's estate with a written accounting of the patient's personal belongings and funds within 10 business days of a patient's death. If a deceased patient's estate has no executor or administrator, the facility shall provide the accounting to the patient's next of kin, the patient's representative, and the clerk of the probate court of the county in which the patient died.

(8)     A nursing home shall purchase a surety bond to guarantee the security of patients' funds held in trust by the facility, and the surety bond shall be in the name of the individual facility as licensed. The surety bond shall meet the requirements of section 21721(1) of the code, but shall not be less than $2,000.00 for any licensed home.

(9)   If a nursing home determines that a patient is incapable of managing his or her own personal funds and that the patient has no legal guardian or patient representative designated to handle the patient's personal property, the facility shall notify the Michigan department of human services, in writing, of its determination.

History: 1981 AACS; 2014 AACS.