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If you can identify a particular theme to the bad dreams or hallucinations, it may give you ideas on things that may be stimulating them. Unfortunately, when someone is in a facility, even if you identify the issues it may be difficult to find someone there help limit the exposures. The mind is very complicated whether we are awake or asleep.
As others have suggested, a thorough evaluation of her medicine may be in order because it may be contributing to the issue or there may be a medicine that may help. There are geriatric pharmacy consultants who can help with this. Using one has made all the difference in resolving issues for my husband.
https://www.ascp.com/
https://www.bpsweb.org/bps-specialties/geriatric-pharmacy/
Any pharmacist may can help, but there are many issues that can affect how medications react or are absorbed in the elderly population. Without the training and experience many contributing factors can be overlooked. When we consulted with the geriatric pharmacy consultant he looked at my husband's health history and looked at all the recent lab work, asked about the recent concerns, then did a detailed evaluation of the prescription and OTC meds, etc. He then created a report with his suggestions to take to our providers to consider. Sometimes it was simply change the times certain meds were given or adjust the dosages. Never make changes without the approval of your personal providers.
One day at a time.
I went through his meds and saw that several of them can cause vivid dreams/nightmares. Trying to get my sister who takes him to his Dr. appointments to bring this up to see if they can adjust or change some of his meds.
If you can go take her and be present for the appointment, please do.
I requested discontinuing the drug, and the vivid dreams stopped almost immediately (along with her constant urge to urinate, I must ad.)
Check possuble side effects if her meds.
Best if luck to you!