Can the nursing home take money from a life insurance policy after the patient dies?

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Depends who the life insurance beneficiary is. Usually the policy pays the spouse. If the death benefit is payable to you, I don't see how they can touch it.
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As for the nursing home getting the money, the nursing home would bill Medicaid [if said patient was on Medicaid], and Medicaid would pay them. Now Medicaid would like to be paid thus that life insurance policy could be valuable to them to help in all the costs involved caring for a loved one.

Check with the State Medicaid office, as there are many different types of life insurances and different value amounts.... its a bit complex.
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