The Mississippi Supreme Court held that a primary caregiver had statutory authority as a health care surrogate to agree to arbitration on behalf of her dependent because it was undisputed that the dependent lacked capacity to manage her own affairs and Mississippi case law has previously established that an agreement to arbitrate, where necessary to the provision of health care, constitutes a "health-care decision."

In Magnolia Healthcare, Inc. v. Barnes ex rel. Grigsby, No. 2006-CA-00427-SCT, 2008 WL 95814 (Miss. Jan. 10, 2008), Grigsby and her husband were the primary caregivers for Barnes, an adult with the mental capacity of a three-year-old. When Grigsby's husband became seriously ill, Grigsby admitted Barnes to a nursing home owned by Magnolia Healthcare (Magnolia).

A few years later, Grigsby sued Magnolia on behalf of Barnes, alleging that Barnes had been abused and sexually assaulted during her residency in the home. In response, Magnolia filed a motion to compel arbitration pursuant to an arbitration agreement in the admission contract that Grigsby had signed on Barnes' behalf. The trial court denied the motion on the ground that Grigsby had no authority to agree to arbitration on Barnes' behalf.

On appeal, the issue was whether the Uniform Health Care Decisions Act authorized Grigsby, as Barnes' health care surrogate, to agree to arbitration on Barnes' behalf. In addressing this issue, the Court first examined whether Barnes lacked the capacity to manage her affairs as required by the statute. The Court found that this statutory requirement was satisfied because it was undisputed that Barnes had the mental capacity of a three-year-old.

The Court next turned to the question of whether the agreement to arbitrate constituted a "health-care decision" within the meaning of the statute. Based on its decision in Covenant Health Rehab of Picayune, L.P. v. Brown, 949 So.2d 732 (Miss. 2007), the Court held that the decision to place Barnes in a nursing home and the attendant agreement to arbitrate were a "health-care decision" and thus authorized by the statute.

Since Grigsby had statutory authority to agree to arbitration on Barnes' behalf, the Court reversed the trial court's order denying Magnolia's motion to compel arbitration.

There were two dissenting opinions. One dissenting opinion argued that the statute required Barnes' primary physician to make the finding of lack of capacity. The other dissenting opinion argued that the arbitration agreement did not meet the statutory definition of a "health-care decision" because an agreement to arbitrate is "not strictly related to health-care."

The latter dissent is reminiscent of the claimant's argument in Owens v. National Health Corp., No. M2005-01272-SC-R11-CV, 2007 WL 3284669 (Tenn. Nov. 8, 2007). In that case, the claimant argued that a power of attorney for health care decisions did not authorize the attorney-in-fact to agree to arbitration because the arbitration agreement was a "legal decision" rather than a "health care decision." In rejecting that argument, the court explained that a rule based upon the "purported distinction between making a legal decision and a health care decision . . . would introduce an element of uncertainty into health care contracts signed by attorneys-in-fact that likely would have negative effects on their principals."