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My mom had the wildest delusions about goings on at the assisted living. She would dream stuff and think it was real. Had to be scary for her, even though it made no sense at all...but then really she seemed to think it was all just matter of course and was not that upset. I guess some of the tales made her feel better about herself, at least she was not as confused as THOSE other people doing REALLY weird stuff.
I hated it. Not much could be done, other than adjusting meds, and even then I was not sure if Mom really didn't have delusions anymore or just kept them to herself more.
I'm not saying that every rehab or nursing home is great. Many aren't. But the examples given seem to be very common misinterpretations made by people with dementia.
My advice would be to support your grandmother by letting her know that you're checking into this. You don't want to ague with her or make her feel bad by telling her that she's wrong. Letting her know that you are checking into the problem will help her feel supported. You may want to learn more about validating her feelings by reading this article or contacting your local Alzheimer's organization.
https://www.agingcare.com/articles/validation-therapy-for-dementia-166707.htm
If there truly seems to be a problem in the rehab center, try talking with the social worker first, and then the administrator. You can, if you are convinced that this is a problematic center, try to get advice from a long-term care ombudsman. While rehab isn't long-term care, many are connected to ltc facilities. The place to look is www.ltcombudsman.org.
Good luck with your grandmother. She needs your love and support.
Carol