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Heritage at Carefree LLC v. Ariz. Dep’t of Health Servs. - 7/16/2020

Arizona Court of Appeals Division One holds that an assisted living facility may not hold a Power of Attorney for a resident or allow an employee or family member to do so.

To protect against possible exploitation, an Arizona Department of Health Services (ADHS) Rule mandates that assisted living facilities “[n]ot act as a resident’s representative and not allow an employee or a family member of an employee to act as a resident’s representative for a resident who is not a family member of the employee.”  A.A.C. R9-10-803(G)(1).  ADHS received complaints that the owner of an assisted living facility held a power of attorney (“POA”) for a resident, and that the daughter of an employee held a POA for another resident.  The holders of the POAs asserted that they had not exercised them.  ADHS initiated an enforcement proceeding and imposed a financial penalty against the facility, which appealed to the superior court and then the court of appeals, both of which affirmed.

On appeal, the facility argued that it did not “act as a resident’s representative” because it never used the POAs.  The Court of Appeals rejected this interpretation of the Rule.  The Court held that because the POAs superceded and revoked all prior POAs, accepting them was enough to violate the Rule.  In addition, the employee’s daughter had used the POA by signing an updated service plan related to the resident’s care at the facility.  The Court rejected the facility’s contention that this conduct was irrelevant because the service plan was merely informational – the service plan was a regulatory requirement to ensure that each resident directed the services provided to them at the facility.

The Court also rejected the facility’s argument that it could not have violated the Rule because no harm had occurred.  The Court held that the Rule was prophylactic, and properly so.

Judge Thumma delivered the opinion of the court; Judge Howe and Chief Judge Swann joined.

Posted by: Josh Bendor

Posted On: 9/10/2020