In Johnson v. Kindred Healthcare, Inc., decided on January 13, 2014, the Massachusetts Supreme Judicial Court (the “SJC”) considered whether an agent under a health care proxy could contractually bind the principal to arbitrate all disputes arising out of the principal’s stay at a nursing home.
When Barbara Johnson admitted her husband Dalton to a Massachusetts nursing home, pursuant to her authority under a health care proxy, she also signed a document agreeing, on her husband’s behalf, that any disputes between Mr. Johnson and the nursing home would be settled through arbitration (a private, informal process that often favors companies over individual claimants) rather than in the courts. After Mr. Johnson suffered serious burns, and later died from his injuries, his estate filed a negligence claim against the nursing home, seeking damages under the Commonwealth’s wrongful death statute. The nursing home then sought to move the dispute to arbitration, pursuant to the arbitration agreement signed by Mrs. Johnson.
Although the Superior Court found in the nursing home’s favor, the Johnson estate appealed to the SJC. The Massachusetts Chapter of the National Academy of Elder Law Attorneys (“NAELA”), represented by Attorneys Debra Rahmin Silberstein and Rebecca J. Benson, filed an amicus curiae brief with the Court.
In an important victory for individuals, the Court appeared to agree with the NAELA brief, finding that health care agents do not have the authority to contractually bind the principal on matters unrelated to the direct provision of health care and treatment. Responding to the decision, Attorney Benson stated:
“The court adopted the primary argument in the amicus briefs on legislative intent, and expressly held in both cases that a decision to arbitrate is NOT a health care decision within the meaning of Chapter 201D.
The NAELA briefs could not have been completed without the strong support of the Massachusetts chapter and the firm of Margolis & Bloom, and the efforts of NAELA member Debra Silberstein.”
The SJC’s decision turned on the meaning of the term “health care decisions,” as contained in the Massachusetts health care proxy statute. In determining the legislature’s intent in enacting the statute, the Court found that “health care decisions” were limited to those decisions that directly involve the “provision of medical services, procedures, or treatment of the principal’s physical or mental condition.” An arbitration agreement, the court found, does not fall within this narrow, specific definition.
As a result of the decision, the plaintiff’s negligence claim will be allowed to move forward in the court system, and the scope of a health care agent’s authority is significantly clarified. While a power of attorney has the power to bind the principal contractually (subject to the powers granted in the documents), the health care agent’s authority is strictly limited to decisions concerning the provision of health care. While Mr. Johnson’s estate, in this case, benefited from the agent’s lack of authority, the Court’s clear distinction between the two roles (of power of attorney and of health care agent) serves to strongly underscore the importance of having both documents in place.
Read Attorneys Silberstein and Benson’s amicus brief (prepared with the assistance of law student Lauren Gray) here. The SJC’s full opinion can be found here