Colorado Court of Appeals Limits Use of Medical Powers of Attorney to Bind Residents to Arbitration

Background of the Case

The resident signed an MDPOA in 2014 naming her daughter as agent. The document authorized the agent to act in all matters relating to the resident’s healthcare, to consent to medical treatment and procedures, and to authorize admission to or transfer from a healthcare facility. It did not mention arbitration.

Nearly a decade later, the resident was admitted to the facility. The resident attended part of the admissions meeting but left before it concluded; the agent completed the paperwork alone, including the arbitration agreement. About a month after admission, the resident suffered two falls within roughly forty-eight hours and passed away days later.

The estate sued for negligence, Colorado Consumer Protection Act violations, and wrongful death. The facility moved to compel arbitration. The trial court denied the motion, finding the agent had neither express MDPOA authority nor actual or apparent authority to sign the arbitration agreement. The Court of Appeals affirmed.

What the Court Held

1. An MDPOA must expressly authorize arbitration.

Building on Lujan v. Life Care Centers of America (Colo. App. 2009) and Fresquez v. Trinidad Inn, Inc. (2022 COA 96), the division held that entering a voluntary arbitration agreement is not a “medical treatment” decision within the meaning of the MDPOA statute (§ 15-14-505(7), C.R.S.). Authority to make healthcare decisions therefore does not subsume authority to waive the resident’s right to go to court. The court expressly disagreed with the contrary holding in Moffett v. Life Care Centers of America (Moffett I), which had assumed an MDPOA agent could sign arbitration agreements unless restricted.

2. The HCAA “delinks” arbitration from admission.

Healthcare arbitration agreements are governed by Colorado’s Health Care Availability Act (HCAA), §§ 13-64-101 to -503, C.R.S. The HCAA requires that such agreements be voluntary, contain mandatory disclosures, and be rescindable for any reason within three months—and it prohibits conditioning admission or care on signing one. § 13-64-403(4), (7). Because arbitration is, by statute, untethered from the resident’s admission, it is not “necessary” admission paperwork, and authority to handle admission does not reach it.

3. The facility failed to establish actual or apparent authority.

The court also rejected the facility’s fallback theories. There was no express authority beyond the MDPOA. Implied authority failed because the arbitration agreement was not documentation necessary for admission. And apparent authority failed because the resident’s decision to step out of the meeting was not a manifestation—by her words or conduct—that she consented to the agent signing an arbitration agreement. Apparent authority flows only from the principal’s conduct, not the agent’s.

4. The court rejected the facility’s procedural arguments.

Because the facility bore the burden of proving the agent’s authority and proffered no supporting evidence despite discovery, the trial court was not required to hold an evidentiary hearing. The court also declined to reach the facility’s estoppel argument, which had been raised for the first time in a reply brief and was therefore unpreserved.

Impact on Colorado Healthcare Facilities

Reno consolidates a now near-uniform line of Colorado authority and aligns with recent decisions in California, Tennessee, and Wyoming. The risk is concrete: arbitration agreements your admissions team has been collecting in reliance on a resident’s MDPOA may not be enforceable.

For facilities that use arbitration agreements, the case highlights several practical steps to improve enforceability:

• Note that garden-variety MDPOA will not compel arbitration. If the MDPOA does not expressly grant authority to enter arbitration agreements, an agent’s signature does not bind the resident.

• Identify the enforceable pathways. Realistically, an agent-signed arbitration agreement is enforceable only where (a) the resident personally signs while capacitated; (b) the agent holds a general / unlimited power of attorney; or (c) the MDPOA or a separate writing expressly and specifically authorizes arbitration agreements.

• Read the actual document at intake. It is not enough to note that “a POA exists.” Staff should obtain the instrument, confirm whether its language reaches arbitration, and route anything ambiguous for review before relying on it.

• Do not lean on the “admission paperwork” rationale. Because the HCAA forbids conditioning care on arbitration, that theory will not supply implied authority in Colorado.

• Build the record where authority is asserted. The facility lost in part on an empty evidentiary record. If you rely on agent authority, document the basis for it contemporaneously.

• Confirm HCAA compliance generally. Voluntariness, the mandatory disclosures, the three-month rescission right, and the no-conditioning rule all remain prerequisites to enforceability—independent of the authority question.

How GRSM Can Help

GRSM would welcome the opportunity to review your facility’s arbitration agreement and admissions process in light of Reno and the HCAA. That review can include:

• Assessing your current arbitration agreement form and disclosures for HCAA compliance;

• Developing intake procedures and a checklist for evaluating an agent’s authority (including specimen MDPOA/POA language to look for);

• Preparing training materials and a short in-service for your admissions staff; and

• Recommending practical steps to strengthen the enforceability of agreements going forward.

If you would like to learn more, please reach out to author Christopher Jones to discuss next steps. This legal alert was authored by Jones, in collaboration with Legal Secretary Karla Freeman.