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Mother in law with dementia will not pay for her phone to be turned back on so she can go back to her home with in-home health care worker.

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Does anyone have POA for her? If yes, they can pay the bill with her funds.

Where is she now?
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Clearly THIS is but the tip of the iceberg. For the missing of one of the tips the Titanic went down. The MIL should likely not return home without someone responsible for assisting with her bills. If she will not allow this, cannot allow this, home is likely not where she should be. Guardianship can be considered, a fiduciary appointed, conservatorship, something of that sort or this is only the beginning of problems.
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Need more info.

A person suffering from Dementia needs 24/7 care. They are very unpredictable so you never know what they will do. She may not understand why she needs to pay the bill and she should no longer have the responsibility. Reasoning, being able to process what is being said and comprehending are the first things to go with short term memory. One day they seem fine, another day be totally confused. Be OK at 10am and at 4pm sundowning where the symptoms of Dementia are very noticeable.

This will not get better. I am assuming here that rehab will not release her until certain caregiving is in place. Maybe its time for an AL or LTC. In my opinion, its a myth that a parent can stay in their home till they pass.
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