Wyoming Supreme Court holds that Agent under Power of Attorney had authority to consent to arbitration in nursing home admission contract


It is not uncommon for nursing home admissions contracts to include provisions requiring the resident to consent to binding arbitration of any dispute. In this recent case in Wyoming, the question was the enforceability of an optional arbitration clause. The nursing home admission contract for Aletha Boyd was signed by her Agent under a General Durable Power of Attorney (DPOA) which expressly gave the Agent the actual authority to perform all acts “without limitation” on behalf of the principal (Boyd). In bold print, the contract stated that the resident had the option at that time of whether or not to consent to arbitration. The Agent consented to arbitration at the time of signing. 

Ms. Boyd died within two weeks of admission, allegedly due to negligent nursing care, and her Estate sued the facility, Kindred. Kindred filed a motion to compel arbitration pursuant to the signed admissions contract. The motion was denied by the trial court, but on appeal, the Wyoming Supreme Court reversed and ordered that the case be sent to arbitration. The Court’s rationale was that the authority to consent to arbitration was encompassed within the expressed broad power of the DPOA the arbitration clause was not unconscionable because it was optional, and the fact that the designated arbitrator was no longer in service did not void the contractual provision.  The case is called Kindred Healthcare v. Boyd. 

When selecting a nursing home, the applicant or their duly authorized Agent under POA or legal guardian is often faced with making an urgent decision, reviewing lengthy detailed contracts, and making arrangements for this move under time pressure. Senior care planning requires careful consideration of the rights and obligations of the parties involved, and legal advice is helpful to ensure that the individual and family understand what they will be facing. 

Call us for help  in senior care and estate planning, elder law and nursing home admissions issues …. 732-382-6070


Feds announce new Medicaid/Medicare rule banning arbitration clauses in nursing home contracts

Effective in November, 2016, mandatory arbitration clauses in nursing home admissions contracts will be prohibited for all nursing homes which accept federal Medicaid or Medicare dollars. This is a dramatic shift in the landscape which will enable injured parties to decide whether to pursue their negligence claims or other claims through the civil courts or through binding arbitration. Presently, it is common practice by many, perhaps most, nursing homes to include mandatory binding arbitration as a condition in the admissions contract. This means the resident gives up his/her right to sue. It also means the case is kept private and off of the statistics records. The Centers for Medicaid and Medicare Services (CMS) has adopted the regulation, which was first published in the federal register for notice and comment over a year ago.

The NY Times reported on this today. A prior NY Times piece explained that the rule proposal would not be applicable retroactively to contracts that were previously signed.

Other CMS rule proposals are here.

Call us to review your nursing home admission contract and for advice on careful long-term care planning … 732-382-6070