No, a bank is not required to — and should not — provide customer records for Medicaid asset verification purposes to a nursing home in the absence of a valid power of attorney or customer authorization.

An Illinois law that became effective in 2019 created a statutory “consent and authorization form” for customers to use when authorizing the disclosure of their financial records to the Illinois Department of Human Services or the Illinois Department of Healthcare and Family Services for purposes of establishing the customer’s eligibility for “Medicaid and Medicaid long-term care benefits for long-term care services.” Importantly, this law prohibits banks from providing a customer’s financial records directly to a long-term care facility — the financial records are to be provided directly to the Illinois agencies responsible for Medicaid eligibility determinations.

Additionally, the law permits your bank to seek reimbursement from your customer for “all costs reasonably necessary and directly incurred in searching for, reproducing, and disclosing a customer’s financial records,” and you may delay delivery of the financial records until “final reimbursement of all costs is received.”

For resources related to our guidance, please see:

• Illinois Banking Act, 205 ILCS 5/48.1(b)(20) (In an exception to the Act’s financial privacy requirements, it does not prohibit “[t]he furnishing of financial records of a customer to the Department to aid the Department’s initial determination or subsequent re-determination of the customer’s eligibility for Medicaid and Medicaid long-term care benefits for long-term care services, provided that the bank receives the written consent and authorization of the customer, which shall:

(1) have the customer’s signature notarized;

(2) be signed by at least one witness who certifies that he or she believes the customer to be of sound mind and memory;

(3) be tendered to the bank at the earliest practicable time following its execution, certification, and notarization;

(4) specifically limit the disclosure of the customer’s financial records to the Department; and

(5) be in substantially the following form: [the statutory form follows]”)

• Illinois Banking Act, 205 ILCS 5/48.1(b)(20)(b) (“In no event shall the bank distribute the customer’s financial records to the long-term care facility from which the customer seeks initial or continuing residency or long-term care services.”)

• Illinois Banking Act, 205 ILCS 5/48.1(b)(20)(d) (“A bank shall be reimbursed by the customer for all costs reasonably necessary and directly incurred in searching for, reproducing, and disclosing a customer’s financial records required or requested to be produced pursuant to any consent and authorization executed under this paragraph (20). The requested financial records shall be delivered to the Department within 10 days after receiving a properly executed consent and authorization or at the earliest practicable time thereafter if the requested records cannot be delivered within 10 days, but delivery may be delayed until the final reimbursement of all costs is received by the bank. The bank may honor a photostatic or electronic copy of a properly executed consent and authorization.”)