Outcry as some nursing homes try to grab stimulus checks

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Chairman Sen. Chuck Grassley, R-Iowa, listens during a Senate Finance Committee hearing on "COVID-19/Unemployment Insurance" on Capitol Hill in Washington on Tuesday, June 9, 2020. (Leah Millis/Pool via AP)

WASHINGTON – Compounding the hardships of the coronavirus, some nursing homes have demanded that low-income residents turn over their $1,200 economic stimulus checks, a cash grab lawmakers want to halt.

On Tuesday, Sens. Chuck Grassley, R-Iowa, and Ron Wyden, D-Ore., called on the Health and Human Services inspector general's office to issue a warning to nursing homes and assisted living facilities that such practices are “improper and unlawful.”

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In the House, Reps. Richard Neal, D-Mass., and Frank Pallone, D-N.J., asked the Centers for Medicare and Medicaid Services to spell out to nursing homes that the relief money from Congress is not considered income that facilities can legally claim to defray the cost of care.

Low-income Medicaid recipients must not be “coerced into wrongly handing over their checks for fear of being kicked out of their homes,” wrote Neal and Pallone. Any funds taken must be returned.

Nationally, over 35,500 people have died from coronavirus outbreaks at nursing homes and long-term care facilities, about a third of the national toll, according to a running tally by The Associated Press.

The attempt to claw back stimulus checks from residents on Medicaid was flagged last month by the Federal Trade Commission's elder justice office, which said it had received reports from Iowa and other states. Oregon's attorney general has issued a “scam alert," calling the practice unlawful.

The nursing home industry says if there's a problem, it's not that common. “We are not aware of widespread issues with resident stimulus funds," the American Health Care Association said in a statement.

But the FTC's elder justice coordinator, Lois Greisman, posted earlier that “this is not just a horror story making the rounds.”

Some nursing homes were claiming that if a resident was on Medicaid, the facility would get to keep the $1,200 stimulus payment.

Generally, a Medicaid recipient’s taxable income is taken into account in determining their eligibility for the program. Taxable income can be taken by a nursing home, according to congressional staff, while the resident can keep a small amount as a personal allowance.

But lawmakers said Congress structured the payments as a tax credit, not as taxable income. They were part of the $2.2 trillion CARES Act, passed to provide an economic lifeline as the pandemic shut down much of the nation's business activity.

“Congress expressly intended that any refund be disregarded in the administration of federal programs and federally assisted programs,” wrote Grassley and Wyden. Translation: Medicaid recipients can keep the money.

The Trump administration agrees. CMS chief Seema Verma tweeted on Tuesday that “nursing homes engaging in this behavior will be subject to enforcement action.”

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