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Don't really do that, it would be brutal. But that is the reason the AL is "insisting."
I actually did once do that, but it wasn't to an elderly lady - it was when a gentleman who'd been declining support with personal care for five days running at last agreed to stand up from his armchair for a wash, and I began, and then said "WOAH - !" and took a picture (with his permission) to send to the District Nurses for urgent attention. He'd had no idea how bad things had become. He then also agreed to an OT visit to help him find a way to transfer to bed at night.
If possible you need to nip this in the bud. She isn't refusing because of where the bed is placed, evidently. She won't call for help? She's afraid of not being able to get out of the bed? Next time you go, ask her to rehearse the routine and see if you can spot what the real problem is.
And do talk to her about the risks to her skin integrity and decreased mobility. People get comfy in their riser recliners and start insisting that they sleep just as well in them, but the reality is that we all move around when we sleep and you can't do that in an armchair. It's a disaster.
Is this her own bed, by the way, or a new one that she isn't used to?
If none of that applies, maybe you could place a favourite throw, pillow, or bedspread, sheets from home (if permitted), or a wool underlay to cosy it up a bit.
Even a favourite doll/teddy bear could be more inviting.
One more suggestion is to have the meal served on a bed table, while watching tv, or pursuing a favourite activity to remove the negative perception.
BTW, 'insisting' does not fill me with confidence that the staff have the necessary skills to negotiate and be, pardon the pun, accommodating.
... and ooh, if she just can't get out of the bed, why not provide a grab rail (attachment to bedframe) - my dad found this most helpful.