Medicare and Medicaid Liens on a Montana Injury Settlement

By the FigureMyTax Editorial Team · How we calculate

The Montana Department of Public Health and Human Services has a lien on settlement money to the extent it paid medical assistance and the money represents payment for medical expenses. Reasonable attorney fees and costs come off first, and the department is paid what it paid less a pro rata share of them, with the rest to you. Medicare recovers under federal rules.

The lien

MCA 53-2-612(1) says that, on notice by the department or the recipient to a third party or its insurer, the department has a lien on money paid in satisfaction of a judgment or settlement of the recipient's claim for personal injury, to the extent it paid medical assistance for the same injury and to the extent the money represents payment for medical expenses.

The order of payment

The lien is subordinate to your attorney's lien. From the amount collected, reasonable attorney fees and costs are deducted first. Unless you and the department agree otherwise, the amount it paid, less a pro rata share of attorney fees and costs, is deducted next and paid to it, but only to the extent it does not exceed the portion of the recovery that represents medical expenses. The remainder goes to you. The department need not share in fees unless your claim results in a recovery out of which it is paid.

Your recovery is not reduced

Unless the law provides otherwise, your right to recover damages may not be reduced or denied because the department paid your medical treatment under a public assistance program.

Federal limit and Medicare

In Arkansas Department of Health and Human Services v. Ahlborn (2006), the U.S. Supreme Court held that Medicaid may reach only the portion of a settlement that represents medical costs. Under the Medicare Secondary Payer statute, 42 U.S.C. 1395y(b)(2), the United States may recover conditional payments and collect double damages from responsible entities; 42 CFR 411.24 governs recovery, and 42 CFR 411.37(c) reduces Medicare's recovery by its procurement-cost share. On a $100,000 settlement with $36,333 of fees and costs, $15,000 of Medicare payments would shrink to about $9,550.

Next steps

See how provider liens work and why Montana health plans must wait until you are fully compensated, then enter every claim in the Montana medical lien calculator.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Montana's rules apply to your specific case with a licensed Montana attorney.