Nursing Homes Can’t Take Stimulus Checks Intended For Residents, FTC Warns

Federal regulators warn operators of nursing homes and long-term care facilities not to take stimulus checks intended for residents, indicating the funds do not qualify as taxable income, and may not be taken from individuals.

As the second round of stimulus checks from the federal government continue to be disbursed for qualifying individuals as part of a national effort to assist families struggling to manage the economic fallout of the COVID-19 pandemic, the Federal Trade Commission (FTC) issued a stern warning that nursing homes cannot interfere with the payments intended for individuals.

According to the FTC, when the first round of economic impact payments were issued in April 2020, some nursing homes attempted to keep the $1,200 checks paid to qualifying Medicaid recipients residing in their facilities, falsely claiming that because the person is on Medicaid, the facility gets to keep the stimulus payment. However, the agency indicates that the actions were not legal and some Attorneys General have been working to recover those funds for the individual residents.

The FTC indicates economic impact relief payments issued under the CARES Act are considered a tax credit, not taxable income, which excludes the funds from being classified as a recoverable resources for federal benefit programs, such as Medicaid.

Since April, the FTC has become aware of many instances nursing homes seizing stimulus checks, or threatening qualifying residents that if they do not sign over the benefit that they will be released from the facility.

In June 2020, lawmakers called on the Centers for Medicaid Services (CMS) to provide information about what actions to take to ensure nursing homes don’t seize people’s payments and return any payments that may have already been taken.

The announcement followed more than a dozen reports of nursing homes seizing Medicaid recipient stimulus checks to the Missouri, Iowa, New Jersey and Oregon attorney general’s offices.

Nursing Home Financial Exploitation

Stealing, threatening or coercing residents to forfeit their stimulus payments to assisted living facilities is financial exploitation of a resident, and could be considered nursing home abuse.

Nursing home financial exploitation of residents has become one of the most common forms of elderly abuse and often goes unreported. These types of abuse often occur by the facilities forging signatures, deceiving or coercion residents into signing documents, contracts, or wills, theft of a resident’s money or physical possessions, cashing a resident’s check, and improperly using a power of attorney or status as a caregiver.

The FTC warning instructs residents of long term care facilities to contact their state attorney general immediately if a facility attempts to claim their stimulus payment. Reports of these interferences can also be sent to the FTC by using its online fraud reporting system.