FraudJournal Blog

March 26, 2011

Potential for Elder Fraud on the Horizon


Hello Everyone. I know its been awhile. Today I would like to share concerns from various conversations with others in the elder care community. This group includes tax preparers, CPA’s, business litigators, caregivers, senior care facilities (both assisted living residential and commercial), and health care workers, and fraud investigators. Why?

Well, as most of you have heard that the number our seniors that have aging parents now needing to place them into assisted care and skilled nursing homes and facilities are increasing. Most locations have been able to accommodate the ebb and flow of family and friends seeking help for their aging parents, spouses, partners and family members. Recently I was visiting an assisted living facility and the executive director commented that he no longer has rooms for the growing number of requests he receives on a daily basis. In fact, he now has had to create a waiting list without any way of assuring the families of a time frame when their loved one can be cared for by skilled staff and in a safe environment.

Which brings me to the next point. Due to the huge and I mean that quite literally, huge upcoming increase in senior/elder care needs, locating affordable and qualified care will be in high demand. This creates a large pool of vulnerable adults open to be preyed upon by the fraudsters in the health care field. This includes medical billing, quality care and safe environments where abuse is not tolerated or able to take place, qualified and vetted personnel (as in proper background checks and monitored activity), not to mention reasonable costs for the care received.

One women in a caregiver support group was aghast when she found out that a facility wanted to charge her a very large administration fee, first and last months space/care fee, a cleaning deposit, and a slush fund for small care needs. This amounted to over $10,000 up front for the first month of care. Most families can barely cover the costs of taking time off to care for a loved one let alone the initial upfront costs to begin care. This was a residential home that was set up to care for six elderly residents, and was part of an LLC that included six other homes just like it. There are many of these homes that work very hard to take very good care of their residents. But this home was not well maintained and the individuals that ran the home allowed family members to come and go and hang around as if it was a normal family home, served only their ethnic foods and was not keeping up the care on the home. This was very disconcerting to the woman and she did remove her mother from the home and chosen to take care of her herself. Which is what many are choosing to do because the costs end up meeting the same as the income they were trying to earn in the first place.

Now, having said this, I know for a fact that a qualified care facility with little turn-over and properly maintained premises is not cheap. Paying the staff what they deserve for the hard work, and think about it, it is hard work otherwise we would not have the need for these types of residential and commercial care locations, are key to running a safe and clean environment. Familiarity or routine is key to helping the elderly feel safe and willing to participate in the care they need. One director told me it takes close to $2000 per new employee to get them properly trained at the level he felt was key to providing the care expected for the fees charged and to remain in compliance with state laws and regulations.

Which brings the next point. There are no standards for care and costs regarding taking care of our elderly citizens aside from the currently established medical and government codes and regulations on running a business or medical practice. That puts the burden on the family to research, vet out and locate places they can both afford and feel their loved ones are safe. This also means they are relying on the homes and facilities to do their ‘due-diligence’ regarding their personnel and policy and procedures.

So here is my final point – the biggest potential for fraud is that the needs will over run the availability of qualified personnel to care and monitor our vulnerable adults. Recent economic conditions create a situation ripe for fraudsters to prey on the elderly either directly or through their caregivers as everyone gets stretched beyond their limits. So here are some ideas that I would like the fraud community to spark conversations on to build a grassroots approach to keeping our loved ones safe and out of harms way.

First, educate as many of those around you on what elder abuse looks like and who and where to report it. Each local city/county has an organization to connect you to the resources available. Second, if you know of someone you think is being targeted or IS unsafe, please reach out to the local law enforcement and ask for them to check in and verify all is well. They have access to governmental agencies for support. Third, ask questions if you need answers regarding the cognitive skill level of our seniors. Early signs may be there and steps need to be taken so they do not become pray to neighbors, family, and other commercial entities looking for easy targets. This includes those of you working in banks and stores.

Now for financial exploitation – this is going to be a very serious situation in the next years ahead. The generation of seniors that are now reaching increased levels of dementia were raised during a time when they understood they needed prepare for retirement. This means most of them have squirreled away some sort of funding to cover their final years. These savings have become an easy target for family, neighbors, and I am sorry to say fellow members of religious organizations to zero in on for support. Befriending the elderly can be easy because they believe in giving people the benefit of the doubt, which means most of them if they are lonely, and they usually are, end up trapped before they know and then have no means to reach out in time to protect themselves from the leeches they have welcomed into their homes and life. Not to mention, if they are in a state of dementia they will not remember what they recently did or agreed to at the time they were parted from their financial future.

Here are some sites to research and get your selves prepared to protect our seniors from harm:

http://helpguide.org/mental/elder_abuse_physical_emotional_sexual_neglect.htm

http://ctwatchdog.com/category/finance/elder-care

http://www.ncea.aoa.gov/ncearoot/Main_Site/index.aspx

http://www.apa.org/pi/aging/resources/guides/elder-abuse.aspx

http://www.calbankers.com/post/preventing-elder-financial-exploitation-how-banks-can-help

http://www.elderangels.com/

http://www.elderangels.com/

 

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