My mom had Medicaid and it was cancelled by them. Can they do that and why?

What does the letter say the reason is?

None of that happened. She only have one pension from her deceased husband. Not much

Probably the most common reason is failure to fill out the annual renewal application. If that is the case, it is a matter of re-applying.

There will be something in the letter telling you how to access someone to find out, and how to file a claim saying you disagree with the conclusion. It's oblique language but it is in there. Read the letter again, now that you are over the shock, and find that language, and do what it says.
Sometimes they discover that people have assets that weren't disclosed, or weren't listed appropriately, or that came post-acceptance. Did something like that happen?