FTC Cautions Nursing Homes or other Medicaid-Supported Programs: Under the CARES Act, Residents’ Federal Stimulus Checks Are Not “Available Resources”

The Federal Trade Commission cautions operators of “nursing homes and assisted living residences” they cannot lawfully require residents on Medicaid to “sign over” their pandemic-inspired stimulus checks to pay down their care bills.  Here is why:

According to the CARES Act, those economic impact payments are considered tax credits and tax credits don’t count as “resources” for federal benefits programs like Medicaid. That means that nursing homes and assisted living facilities can’t take that money from residents simply because the resident is on Medicaid. Need some quick cites? Take a look at page 3 of the Congressional Research Services’ COVID-19 and Direct Payments to Individuals: Summary of the 2020 Recovery Rebates/Economic Impact Payments in the CARES Act and 26 U.S.C. § 6409 of the Internal Revenue Code
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Plus the FTC notes this “isn’t just an arcane hypothetical someone has dreamed up. The Iowa Attorney General’s Office and other State AGs have received boots-on the-ground reports this is happening.”

Family members of Medicaid-program LTC clients should also be on the lookout.  FTC advises anyone with concerns about inappropriate actions on stimulous checks to contact their state attorney genera’ls office and report the concern to the FTC.

Thank you to my Dickinson Law colleague, Professor Samantha Prince, for spotting this caution!