Arbitration clauses in nursing home agreements which are signed by a health care surrogate for the resident are not enforceable in West Virginia, according to the Supreme Court of Appeals of West Virginia in an opinion issued January 25, 2013, in State ex rel AMFM LLC. v. King. This is the latest opinion in an increasing line of cases refusing to enforce arbitration clauses in long-term care agreements, reflecting the Court’s hostility toward what it has found are unfair adhesion contracts. See, Brown v. Genesis Healthcare Corp., 729 S.E.2d 217 (2012).
The basic facts surrounding the case were not contested. After Ms. Beulah Wyatt became incapacitated and unable to make her own medical decisions, her physician appointed her daughter, Ms. Belcher, to serve as her health care surrogate as allowed by West Virginia Code §16-30-8 (2002) for patients who have not signed advance directives. Two days later, Ms. Belcher admitted her mother to McDowell Nursing and Rehabilitation Center for nursing home care. Included in the admission paperwork which Ms. Belcher signed was an Arbitration Agreement. The arbitration agreement was not required for Ms. Wyatt to receive care at the nursing home. Two months later, Ms. Wyatt appointed Ms. Belcher as her power of attorney. For approximately ten months, Ms. Wyatt received nursing care at McDowell Nursing and Rehabilitation until she died on July 31, 2010. Thereafter, another of her daughters, Ms. Baker, brought suit as the representative of the estate, claiming that Ms. Wyatt sustained injuries and death as a result of poor care.
Judge King of the Circuit Court of Kanawha County refused to enforce the arbitration agreement, holding the authority of the health care surrogate, Ms. Belcher, was “limited to making health care decisions on behalf of [the resident] and did not extend to the subject Arbitration Agreement.” McDowell Nursing and Rehabilitation sought a writ of prohibition in the Supreme Court of Appeals of West Virginia.
In an opinion authored by Justice Robin Davis, the court affirmed Judge King’s order and refused to enforce the arbitration agreement. The court issued three new syllabus points, representing the binding precedent in the case:
6. The West Virginia Health Care Decisions Act, W. Va. Code § 16-30-1 et seq., authorizes a health care surrogate to make health care decisions on behalf of the incapacitated person for whom the surrogate has been appointed.
7. The health care decisions that a health care surrogate is authorized to make on behalf of the incapacitated person for whom the surrogate has been appointed are “decision[s] to give, withhold or withdraw informed consent to any type of health care, including, but not limited to, medical and surgical treatments, including life-prolonging interventions, psychiatric treatment, nursing care, hospitalization, treatment in a nursing home or other facility, home health care and organ or tissue donation.” W. Va. Code § 16¬30-3(i) (2002) (Repl. Vol. 2011).
8. An agreement to submit future disputes to arbitration, which is optional and not required for the receipt of nursing home services, is not a health care decision under the West Virginia Health Care Decisions Act, W. Va. Code § 16-30-1 et seq.
The opinion makes clear that an arbitration agreement signed by a health care surrogate appointed by a physician pursuant to statute will not be enforced by West Virginia courts. While not specifically addressing the authority of medical powers of attorney designated in advance by the patient, language in the case certainly suggests the Court will not be inclined to enforce any arbitration agreement signed by a health care surrogate, even if selected in advance by the patient. Even so, arbitration clauses in nursing home agreements face an uphill battle in West Virginia courts on unconscionability grounds, as seen in prior cases.
State ex rel AMFM, LLC. v. King may have impact beyond the enforcement of arbitration clauses. If the opinion stands broadly for the proposition that the only decisions and agreements that health care surrogates can make directly relate to health care, it raises potential issues regarding other terms in nursing home admission agreements, including those related to payment for services rendered, and other issues relating to payment by Medicare and the patient.
In this regard, a significant and very practical problem is that SER AMFM v. King, if broadly interpreted, suggests nursing homes may have to require a person admitting a loved one to have full guardianship or full power of attorney to deal with the medical, legal and financial issues attendant to placing a loved one in long-term care. This is impractical for both families and nursing homes. It is often difficult for family members to obtain signed powers of attorney before their loved one becomes incapacitated. Nursing homes are presented with new residents every day by people who have the apparent, if not actual, authority to make their decisions for them and on such an understanding and belief, care is given. This decision, while clearly addressing the enforceability of arbitration agreements, leaves open whether other provisions can be enforced.
The full opinion in State ex rel AMFM v. King can be downloaded from the Supreme Court’s website, here.