Malcomson v. Liberty Northwest – Denial of Insurer’s Ex Parte Communication With Doctors

Our Spartanburg workers’ compensation attorneys know that in some cases, insurers providing coverage will seek to communicate with medical providers outside the patient’s knowledge or participation. This is called ex parte communication, and it can only be done with a patient’s explicit, written consent.
While that communication may sometimes necessary for certain administrative purposes, the Montana Supreme Court recently ruled in Malcomson v. Liberty Northwest the communication should not be unlimited, particularly when information gleaned is broad and not relevant to the immediate case. Further, the court affirmed an earlier ruling by the state’s workers’ compensation commission that a patient’s refusal to allow unmitigated access to her health care providers regarding her case violated her constitutional rights to medical privacy.

This is a case that illustrates why it is important to have an attorney assisting you from the outside of filing a claim.

Here, claimant injured her back in the course of performing work-related duties as manager of a pizza shop. That same day, she filed a claim for workers’ compensation benefits.

The workers’ compensation insurer hired a registered nurse to act as the insurer’s agent and the worker’s medical case manager. The nurse presented an authorization form to the claimant, indicating it had to be signed in order for her to receive benefits. The form authorized the worker’s health care providers and insurance company to release relevant health care information to one another or their agents. The forms also indicated the insurer and/or agents could communicate with doctors absent worker’s knowledge or opportunity to participate. Both forms indicated patient could revoke authorization for this clause in writing at any time, and it would be effective upon the insurer’s receipt.

The nurse immediately made appointments for claimant with doctors not of her choosing, and the nurse attended those appointments with her. The nurse also changed appointment dates to those more tailored to her schedule. Further, she contacted and spoke with the worker’s doctors without the worker’s knowledge.

Worker was later notified by insurer her temporary partial disability benefits were terminated because the employer fired her for disciplinary reasons. With a lawyer, worker requested emergency reinstatement of benefits while resolution of the termination dispute was pending. In the same request, she revoked releases and authorizations she’d previously signed. She declined to allow insurers to speak with her doctors without first talking with her or her attorney and granting them the opportunity to participate. She did offer to allow certain releases that would grant insurer ability to obtain copies of her medical file and bills without notifying her first.

The insurer indicated it would not reinstate TPD benefits, and further because she had revoked the authorization of ex parte communications with her doctors, it was terminating her medical benefits too. She and her attorney worked to construct a release acceptable to both sides, but were unable to reach an agreement.

Following an emergency trial before the state worker’s compensation commission, which ruled the insurer’s insistence of maintaining unlimited ex parte communication was unconstitutional. The commission reasoned this authorization would have allowed the insurer to discuss wide-ranging health care information with numerous providers, some which may not be relevant to the claim, without first providing notice. The commission found the statute allowing this was not narrowly tailored to effectuate the interest of an orderly workers’ compensation process. It therefore indicated that a release granting an insurer limited ex parte communication for the purpose of facilitating and expediting claim handling (scheduling appointments and requesting medical documents) would be acceptable.

Insurer appealed.

The commission’s ruling was affirmed, finding the statute undermined patient privacy rights. Patient did not object to insurer’s right to access relevant health information, but rather to the unrestricted access without her knowledge or opportunity to participate. The court found that just because a worker consents to release of relevant medical information to an insurer does not mean he or she forfeits all privacy interests in how the information is circulated or disseminated. This right would be lost if the worker doesn’t know what information is being gleaned or to whom.

If you have been injured at work in South Carolina, contact the Lee Law Offices at 800-887-1965.

Additional Resources:
Malcomson v. Liberty Northwest, Sept. 10, 2014, Montana Suprem Court

More Blog Entries
Adamson v. Municipality of Anchorage and Novapro Risk Solutions: Work-Related Cancer and Firefighters, Sept. 17, 2014, Spartanburg Workers’ Compensation Lawyer Blog

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