Disclaimer: This article is for informational purposes and does not constitute legal advice. Consult a licensed attorney for guidance on your specific situation.
Detailed Answer
1. Identify Potential Lienholders
Before distributing settlement proceeds, you must locate all entities that may assert a claim against the recovery, including:
- Hospitals and medical providers. Under Montana’s Hospital Lien Act, providers who furnish emergency or inpatient treatment can file a lien. See Mont. Code Ann. § 71-3-101.
- Health insurers that paid medical bills. Insurers often have subrogation rights allowing them to seek reimbursement from your settlement. These rights arise under common-law subrogation principles.
2. Request Lien Statements and Proof of Payment
Send written requests to each hospital or medical provider for:
- A copy of the lien filed with the county clerk (see Mont. Code Ann. § 71-3-102).
- An itemized statement showing the dates of service, charges, outstanding balance, and any payments received.
Similarly, ask your health insurer for its subrogation demand and documentation of payments it seeks to recover.
3. Verify Lien Perfection and Amount
Review each lien for procedural compliance:
- Was the lien filed within 90 days after discharge? (Mont. Code Ann. § 71-3-102).
- Does the lien notice include a sworn statement of the debt?
- Is the amount claimed reasonable and supported by records?
Challenge any defective or inflated liens by filing a motion to reduce or discharge under Mont. Code Ann. § 71-3-103.
4. Negotiate or Litigate to Resolve Disputes
If a hospital or insurer overstates its lien, negotiate a reduction or, if necessary, file a declaratory judgment action in district court to determine the valid balance.
5. Obtain Releases and Payoff Letters
Once the agreed amount is set, obtain:
- A lien release or waiver from the hospital or provider.
- A payoff letter from your insurer confirming the remaining balance to satisfy subrogation.
6. Document Satisfaction of Liens
After payment, file a satisfaction of lien with the county clerk’s office. Ensure insurer subrogation claims are formally released by sending a signed subrogation waiver or satisfaction document.
7. Disburse Net Settlement Funds
Only after confirming all liens are resolved should you distribute the remaining proceeds to the client and other parties. Retain copies of all releases and filings in case of later disputes.
Helpful Hints
- Maintain a deadline calendar for lien filings and responses under Mont. Code Ann. § 71-3-102.
- Obtain lien searches from the county clerk where the hospital is located to uncover unfiled claims.
- Use a certified mail proof-of-service when requesting statements or filing satisfactions.
- Consider a small holdback in the settlement escrow to cover late-emerging liens.
- Work with a settlement administrator experienced in Montana medical liens to streamline the process.