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Georgia Court of Appeals Reaches Opposite Conclusions about Arbitration Clauses- Health Law and Regulation Update Blog Post by Eric Frisch

Health Law and Regulation Update Blog Post by Eric Frisch.

In a pair of decisions related to the enforceability of arbitration provisions in the healthcare context, two panels of the Georgia Court of Appeals reached opposite conclusions recently.

In the first case, the Court of Appeals reversed a trial court’s ruling that an arbitration provision was procedurally unconscionable and therefore unenforceable. An elderly patient moved to skilled nursing facility. Before admission, the patient’s daughter and power of attorney faxed the facility of the power of attorney form. Although the facility received the power of attorney, an employee presented the patient “89 pages of admissions documents” on arrival and without the daughter present. The documents were “prepopulated” with spaces for the signatures of both the patient and the daughter.

The patient died following a fall and the family filed suit. The facility filed a motion to dismiss and to compel arbitration, which the trial court denied. The trial court ruled that the facility failed to determine the patient’s mental status or ability to read before having them sign the paperwork, the failure to have the daughter sign the paperwork when knowing she was the power of attorney, and failure to give copies of the paperwork to everyone. The trial court ruled that the provision was unenforceable because it was procedurally unconscionable.

The Court of Appeals reversed, holding that, despite the trial court’s conclusions, the evidence showed that the patient was competent, the financial power of attorney did not divest the patient of the authority to enter into the agreement, and the fact that it was “prepopulated” was not a sign of unconscionability. The Court further held that the failure to give the patient and the daughter copies did not relate to the making of the agreement or fraud to induce an unsophisticated party into signing.

The case is PruittHealth-Augusta, LLC v. Lyell, 2022 WL 590675 (Ga.Ct.App. Feb. 28, 2022).

In the second case, the Court of Appeals affirmed the denial of a motion to dismiss and compel arbitration. This case arose out of claims related to complications from delivery at a hospital. The patient – a pregnant mother – signed two forms for consent to treatment that contained identical arbitration provisions. The arbitration provision stated that they had authority if they were signing on behalf of a child or other person for whom they are legally responsible. The form then had multiple signature lines for “patient or patient representative.” The mother signed both forms on both signature lines but did not include a statement indicating her relationship to the patient. Following a difficult delivery, the baby died two weeks later.

The Court of Appeals affirmed the denial of the motion to dismiss and compel arbitration. Specifically, the Court held that because the mother only signed in her personal capacity and not as the legal representative of the unborn child, the arbitration provision was not enforceable. The Court also found it significant that the unborn child was not identified in the documents as “the patient.”

The case is Emory Healthcare, Inc. v. Engelen, 2022 WL 600762 (Ga.Ct. App. March 1, 2022).

Take-home: the enforcement of arbitration provisions in healthcare contracts is factually nuanced. When different panels of the appellate courts reach different conclusions on the procedure, the only take home is that each case is going to be decided on a fact-specific basis.

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