Introduction

Few Montana cases have had as lasting an effect on the practice of workers’ compensation claims as Malcomson v. Liberty Northwest Insurance Corp., 2014 MT 242. Decided more than a decade ago, Malcomson continues to define the limits of insurer communications with medical providers—and the scope of an injured worker’s right to privacy under the Montana Constitution.

In an era where insurers, nurse case managers, and managed care organizations seek greater efficiency through direct access to medical professionals, Malcomson stands as a constitutional reminder: efficiency cannot come at the expense of privacy. Ten years later, the lessons from Malcomson remain as relevant as ever for insurers, employers, and claimants navigating the delicate intersection between medical management and legal rights.

The Background: Why the Issue Matters

At the heart of the case lies a simple question—one that every claims adjuster and nurse case manager should ask before picking up the phone:

“Did this information help the doctor diagnose or treat the patient—or did it simply help the insurer manage the claim?”

Montana’s constitutional right of privacy under Article II, Section 10 is among the strongest in the nation. It protects not only the content of a person’s medical information, but also how and when that information is shared. The workers’ compensation system, though designed to be administrative rather than adversarial, is not immune to constitutional scrutiny.

The Case: Malcomson v. Liberty Northwest

Tina Malcomson, a workers’ compensation claimant, signed releases authorizing Liberty Northwest Insurance and its nurse case manager to communicate with her medical providers. Almost immediately, problems began to surface. The nurse took control of Malcomson’s medical management—scheduling appointments without her consent, attending visits, changing appointment dates to fit her own schedule, and contacting providers directly without notifying Malcomson or her attorney. Over time, the nurse made 32 ex parte phone calls totaling nearly nine hours—some of them even after Malcomson revoked her authorization.

Malcomson’s attorney objected, offering instead a HIPAA-compliant release that would allow Liberty to obtain copies of her medical records and bills without prior notice. Liberty refused and responded by terminating both disability and medical benefits, citing Malcomson’s refusal to allow ex parte communications. Malcomson sued, arguing that § 39-71-604(3), MCA, which permitted such contact, violated her constitutional right to privacy.

The Challenged Statute

At the time, § 39-71-604(3), MCA, stated that a signed claim for workers’ compensation benefits authorizes the insurer or its agent to communicate with a physician or other health care provider about relevant health care information—by phone, letter, or other means—without prior notice to the injured employee or their attorney. The statute essentially gave insurers blanket permission to contact medical providers privately. The question before the Montana Supreme Court was whether that authorization could coexist with the state’s strong privacy protections.

The Constitutional Issue

Malcomson’s argument was straightforward: she was not refusing to share medical information—she was simply requiring that her attorney be informed of any communication and given the chance to participate. The insurer’s position was that the statute gave them unfettered access to treating providers once a claim was signed, with no duty to include the claimant or counsel in the discussion. The Montana Supreme Court disagreed with the insurer.

The Court’s Ruling: Privacy Prevails

The Court reaffirmed that the privacy interests concerning a person’s medical information implicate Article II, Section 10, of the Montana Constitution. That right cannot be infringed absent a compelling state interest, and even then, the means of achieving that interest must be narrowly tailored to serve it. Applying strict scrutiny, the Court asked whether the State’s interest in efficient claims management was compelling enough to justify ex parte contact. The answer was no.

For nearly a century before the 2003 amendment to § 39-71-604(3), the workers’ compensation system functioned adequately without ex parte communications. The Court concluded that the statute, as written, was overbroad and unconstitutional because it exposed claimants to potential violations of their privacy rights without advancing a narrowly tailored state interest.

What Malcomson Means in Practice

The Malcomson decision drew a clear line between substantive and administrative communication:

– Substantive communication—any discussion involving diagnosis, treatment, prognosis, restrictions, or causation—requires prior notice and an opportunity for the claimant or attorney to participate.
– Administrative communication—scheduling or logistical coordination—may occur without notice but must stay within those limits.

To comply with Malcomson, insurers must ensure that all written correspondence with providers is shared simultaneously with the claimant or counsel using identical methods (email, fax, or mail).

Ten Years Later: Common Areas of Risk

A decade after Malcomson, the most common violations occur through misunderstanding of what the decision actually prohibits.

1. Nurse Case Managers – Their role can easily drift into substantive territory. Questions about treatment or return-to-work timelines require prior notice.
2. Releases Waiving Privacy Rights – Several insurers use standard release forms that contain waivers allowing the insurer to engage in ex parte contact; these should be reconsidered.
3. Email Correspondence – Adjusters must ensure simultaneous delivery to counsel.
4. Fraud Investigations – Showing surveillance footage to a provider without notice may constitute substantive communication.

Ethical and Practical Considerations

From an ethical standpoint, Malcomson reinforces that the insurer’s role is not to act as a shadow medical manager but as an administrator of benefits under the law. While the decision may seem to favor claimants, it promotes transparency and fairness. Requiring inclusion of the injured worker or counsel ensures communications remain focused on medical necessity, reduces misunderstandings, and prevents providers from being placed in adversarial positions.

“You may not be responsible for causing the problem, but you are accountable for ensuring it is solved.”

Best Practices Moving Forward

Conclusion

Malcomson v. Liberty Northwest remains one of the most important privacy decisions in Montana workers’ compensation law. It reaffirmed that while insurers play a crucial role in administering benefits, constitutional rights do not yield to administrative convenience. Ten years later, the message is clear: transparency is not optional—it’s the law. Montana’s right to privacy ensures that every injured worker retains a voice in the conversation about their own medical care.