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Assisted Living Facility Fined Over Power of Attorney

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Assisted living facility fined

An Arizona assisted living facility, fined last year over two powers of attorney, appealed its civil sanction through the courts. It’s story raises concerns about the vulnerability of ALF residents. It also offers insight into common practices in the industry.

The first resident’s story

The case involved two residents at Heritage at Carefree Senior Living in the Phoenix area. A July, 2016, complaint to the Arizona Department of Health Services alleged that Heritage owner Daniela Holbura had been named as agent on a resident’s health care and financial powers of attorney.

After investigating the complaint, the Department decided that yes, Ms. Holbura had been named as the resident’s agent. It did not appear that Ms. Holbura had actually taken any steps as agent — either regarding health care or finances. Still, it seemed like a situation ripe for abuse.

In fact, Arizona law directs that a “manager” of an assisted living facility may not act as a “representative” for any resident. The rules don’t define “representative” (though “manager” is a defined term) — but the purpose is clear: facility managers should not be in control of residents’ personal affairs.

The resident in question did not recall having given Ms. Holbura a power of attorney. Ms. Holbura herself, though, acknowledged that she knew the resident had signed the documents while applying for benefits through ALTCS, the Arizona Medicaid program, in 2014. The documents were unrevoked — and unused.

The facility agreed to modify its practices, and submitted a plan of correction. After review, the Department accepted that plan in January, 2017.

A second resident’s powers of attorney

The very same day that the Department accepted Heritage’s plan of correction, it also received a second complaint. This time their investigation showed that a daughter of a Heritage employee had secured appointment as health care and financial agent for a resident.

In the second resident’s case, the employee’s daughter had allegedly told the resident to sign the documents to “get a better rate” at Heritage. Once again, it did not appear that the powers of attorney had actually been used. Unfortunately, the resident was no longer capable of telling investigators very much about the circumstances.

Based on the new allegation, the Department decided it would need to impose a civil penalty against Heritage. The assisted living facility was fined $11,000 in September, 2017.

Heritage appeals its fine

The assisted living facility appealed the fine imposed against it. A hearing officer reduced the fine to $2,000. The agency raised the fine back up to $2,200; oddly, the agency’s head gets to rewrite decisions by administrative law judges. Heritage appealed that fine to the courts, and the Arizona Court of Appeals considered the case last week.

In its decision, the appellate court agreed with the Department of Health Services. The court ruled that the $2,200 fine was reasonable and justified.

The Department’s authority came from the Arizona Administrative Code and state statutes, said the appellate judges. The purpose of the prohibition was to prevent exploitation of residents by assisted living facilities, and a civil penalty was appropriate. Heritage at Carefree LLC v. Arizona Department of Health Services, July 16, 2020.

What does having an assisted living facility fined mean?

Ultimately, the only penalty levied against Heritage Carefree was a small civil penalty — a fine of $2,200. But that isn’t the real significance of this enforcement action.

The Arizona Department of Health Services regulates assisted living facilities, nursing homes, adult foster care homes and other health care facilities. By imposing even a modest fine (and defending it through the court system), the Department has made clear that it does not approve of facilities taking charge of finances or health care decisions for residents.

Neither of the power of attorney sets were actually used. One of the people named on powers of attorney wasn’t even an employee of the facility. Still, the facility’s manager must develop policies and procedures to protect against exploitation or abuse.

But the agency’s (and the court’s) expansive reading of the regulation should give pause to health care facilities generally. The regulations deal with a facility manager acting as “representative” of a resident — or allowing other staff members to do so. That should be broad enough to include acting as representative payee for Social Security or other benefits payments. It would prevent facilities or employees from handling any funds or personal decisions.


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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

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Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.