Arizona Court of Appeals Rules that a Health Care Power of Attorney Does Not Authorize the Patient’s Agent to Sign an Arbitration Agreement
May 26, 2021 – In Heaphy v. Willow Canyon Healthcare, Inc., 2 CA-CV 2020-0113 (App. May 18, 2021), the Arizona Court of Appeals held that a health care power of attorney (“HPOA”) did not authorize the patient’s representative to execute an arbitration agreement. Although the HPOA authorized the patient’s representative to make medical decisions and to assert certain claims related to the patient’s health care, it did not grant “wholesale authority to take any legal action” on the patient’s behalf. Accordingly, the court refused to enforce the arbitration agreement.
Many skilled nursing facilities, assisted living facilities, and other health care institutions include optional arbitration agreements in their admission documents. When properly executed and enforceable, these agreements require the parties to resolve their disputes in an arbitration instead of a lawsuit. The types of claims affected include allegations of malpractice and abuse or neglect. The scope and enforceability of these agreements are regularly litigated and have been the subject of numerous published appellate decisions.
Entering into an arbitration agreement in the health care setting requires careful and strategic thought. Arbitration can be faster and less expensive than normal litigation, but the limited rights of appeal from an unfavorable decision create risks that do not exist in regular litigation.
If your institution offers arbitration agreements, the Heaphy case shows clearly the need to ensure that the person who signed the agreement actually had authority to do so. A standard HPOA might not be adequate. If a patient’s representative is acting pursuant to a Power of Attorney (“POA”), you should carefully examine the POA to ensure that the representative actually has authority to enter into the agreement. You should also include a copy of the POA in the patient’s admission paperwork.
For more information or questions, please contact any of our health care law attorneys listed below.