Will Medicaid take my mother's personal needs allowance over a certain amount?

She is going on her third year in a nursing home in NY State. She is on Medicaid and they take her social security and pension. She gets $50 a month in an account for haircuts, clothes, snacks, etc. - and it has been building up to currently $1000 or more. Someone said Medicaid will seize that personal needs allowance when it gets to $2000. Is this true? If so, I will take some out because there are things I am buying for her out of my own pocket. I was hoping to put that money (if not spending it ) toward eventual funeral costs, as of course she has made no provision for that.