Health care powers of attorney are for making health care decisions. That seemingly obvious idea was just confirmed by the Arizona Court of Appeals, which sided with a widow trying to sue a care facility.
The case, Heaphy v. Willow Canyon Healthcare, Inc., centers on a contract that Shirley Heaphy, as heath-care agent for her husband, Charles. She signed on Charles’ behalf to admit him to a facility for rehabilitation and skilled nursing. The forms included an option for arbitration. Such a provision waives a person’s right to file a lawsuit in favor of a less formal process. The result can mean disputes are resolved faster with less expense. Such provisions in care contacts have been controversial. Many believe big businesses can have an advantage over ordinary people. They were once common, then banned, and now are permissible but can’t be mandatory.
Death Leads to Lawsuit
Charles died just a few weeks after entering the facility. Shirley, as the personal representative of his estate, sued Willow Canyon, the corporate owner of the facility, and a doctor. She alleged elder abuse, negligence, negligent hiring and supervision, and wrongful death. Willow Canyon, one of 250+ businesses affiliated with an even larger company called the Ensign Group, argued that it had to go to arbitration.
The trial court concluded no. The reason? The health care powers Shirley held as agent did not authorize her to agree to arbitration.
Willow Canyon appealed.
Agreements Require Authority
The Court of Appeals sided with Shirley. The ruling cites Arizona’s statute for health care powers of attorney: “An agent’s authority to make health care decisions on behalf of a principal is limited only by the express language of the health care power of attorney.” The justices examined the HPOA document and concluded that “the HPOA did not authorize Shirley to enter into the Agreement.”
The decision does suggest that if the arbitration provision had been mandatory, Shirley might have lost. Her powers included the authority to take any action necessary to authorize admission into a facility. If an arbitration agreement was necessary to get Charles care, she had the authority. But because it was optional, it was not a health care decision.
The ruling officially clarifies the issue following several “unpublished,” or unofficial, opinions. An earlier case ended with an opposite ending. In Ruesga v. Kindred Nursing Centers, LLC, the Court determined that a wife did have the authority to sign such an agreement. In Ruesga, however, the issue was the wife’s general status as agent, not the authority granted under a power of attorney document.
Understanding Health Care Powers
What does this mean for the rest of us? A couple of things:
- It’s important to read health care power of attorney documents–both those you executed and those that name you as agent. Understand the scope of the authority.
- In either case, if the principal has capacity, consider changes, such as explicitly including or excluding the power to agree to arbitration.
- As agent, consider whether you are acting within your powers when you make decisions. If you don’t have the power as health care agent, the financial agent probably does. And that may be you, too.
- As for arbitration, consider explicitly opting out. Shirley Heaphy spent a long two years fighting for her lawsuit to move forward. Clarity would have helped.
- Understand that facilities are likely to scrutinize health care POA documents more closely. They may insist on inspecting the document, They might require additional signatures if the authority is not clear. That may cause delays and frustration at what is usually an emotional time.
Care homes can take a relatively relaxed approach to health care agents and their powers. The Heaphy ruling should force facilities and agents alike to pay more attention to health care powers — and the limitations thereof. That should have been happening all along.
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