According to a Tennessee appellate court, a health care surrogate may only act under Tennessee law if the patient is found to lack capacity, and if the supervising health care provider has designated the surrogate in its records.

In McKey v. National Healthcare Corp., No. M2007-02341-COA-R3-CV, 2008 WL 3833714 (Tenn. Ct. App. Aug. 15, 2008), Brewer was admitted to a National Healthcare Corporation (NHC) nursing home. At the time of admission, Brewer's daughters, McKey and Fletcher, signed the admission paperwork. These documents contained an arbitration agreement.

After Brewer died during her residency at NHC's facility, McKey sued for wrongful death as administratrix of Brewer's estate. NHC moved to compel arbitration. The trial court found that neither Fletcher nor McKey possessed authority as a legal representative or a health care surrogate to agree to arbitration on Brewer’s behalf.

On appeal, the Court first noted the undisputed fact that Fletcher and McKey did not have power of attorney, guardianship, or other legal authority to bind Brewer. However, NHC argued that McKey and Fletcher had the requisite authority as a health care surrogate under the Tennessee Health Care Decisions Act (THCDA). Tenn. Code Ann. § 68-11-1806.

According to the Court, a surrogate can only act under § 68-11-1806 (b) and (c)(1) of the THCDA if there is "(1) a prior determination by the designated physician that the patient lacks capacity and (2) identification of the surrogate by the supervising health care provider with documentation in the current clinical record."

The Court found that neither Brewer nor her supervising physician designated any surrogate prior to her admission. Therefore, according to the Court, the physician designated as responsible for Brewer's care was the only party that could act under § 68-11-1806(c)(1) on behalf of Brewer at the time of admission, unless that party was not "reasonably available" at the time of admission.

In the admission documents, Dr. Khatri was clearly designated as Brewer's physician, and there was no evidence offered at trial that Dr. Khatri was not "reasonably available" at the time of admission to make a determination of lack of capacity. See Tenn. Code Ann. § 68-11-1806(a)(15) (defining "availability" broadly, even including "availability by telephone"). There was also no evidence that Brewer was determined to lack capacity before admission. Therefore, without this capacity determination, neither McKey nor Fletcher could act as a surrogate with authority to agree to arbitration on Brewer’s behalf.

Finally, the Court distinguished contrary holdings from Mississippi and Texas courts, finding the latter decision informed by a statute that determined surrogate status from a predefined "priority list," and the former decision turning on a physician's express determination that the patient lacked mental capacity. See Covenant Health Rehab of Picayune, L.P. v. Brown, 949 So.2d 732, 737 (Miss. 2007) ("Brown was incapacitated by virtue of admission by her representatives and corroboration by her admitting physician"); In re Ledet, No. 04-04-00411-CV, 2004 WL 2945699, at *4 (Tex. App. Dec. 22, 2004) (citing the priority list of surrogates under Tex. Health & Safety Code Ann. § 313.002(10)).