“This practice is prohibited, and nursing homes that seize these payments from residents could be subject to federal enforcement actions, including potential termination from participation in the Medicare and Medicaid programs,” the Centers for Medicare & Medicaid Services (CMS) said in an alert to providers.
The Federal Trade Commission in May issued a similar admonishment to nursing homes and assisted living facilities, citing reports that some operators had attempted to claim checks sent to Medicaid residents under the assumption that they counted as income or “resources.”
The payments, which can total up to $1,200, instead, fall under the category of tax credits, and thus cannot be considered income under Medicaid rules, according to the FTC.
“We’ve heard that some facilities are requiring residents on Medicaid to sign over their stimulus payments to the facility,” the FTC noted, encouraging potential victims to contact the commission. “That contradicts the CARES Act, so you’ll be doing your clients a favor by cautioning them against that practice.”
CMS acknowledged that the agency has not received any formal complaints about facilities that illegally required residents to surrender the funds, but emphasized that the seizure of checks could be considered a violation of federal laws protecting elders from abuse, neglect, and exploitation — as well as residents’ rights to maintain their own financial affairs and personal property.
The agency encouraged residents or family members who may have been compelled to sign over their stimulus money to nursing home operators to file complaints with State Survey Agencies — the state-level groups that perform nursing home inspections on behalf of CMS — as well as their specific state attorney general.
“CMS and state investigators will make referrals to the states’ attorneys general, as appropriate, if they find a nursing home in violation of these requirements,” the agency concluded.
