Understanding Medicaid Liens in Montana Personal Injury Settlements

Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for advice about your specific situation.

Detailed Answer

When you receive Medicaid benefits in Montana, the Department of Public Health and Human Services (DPHHS) has the right to seek reimbursement from any third-party recovery, including personal injury settlements. This right is set out in Mont. Code Ann. § 53-6-131, which directs DPHHS to recover the cost of medical assistance paid on your behalf. You must understand how this process works to protect your entitlement to settlement funds for pain and suffering, lost wages, and attorney fees.

1. Statutory Basis for Recovery

• Mont. Code Ann. § 53-6-131: Grants DPHHS a right of recovery from third-party settlements. View statute.
• Federal Rules (42 C.F.R. § 433.139): Limit recovery to the amount of medical assistance paid and require protection of attorney fees and costs charged against the settlement. View federal regulation.

2. Notification Requirements

You must notify DPHHS within 30 days of filing a third-party claim or lawsuit. Failure to timely notify can trigger penalties or a larger lien. Use the DPHHS Third-Party Liability Division forms available on the DPHHS website.

3. Calculating the Lien

DPHHS will calculate the lien based only on medical assistance paid directly related to your injury. The lien does not include non-medical damages such as pain and suffering. DPHHS must provide an itemized billing statement showing the amount paid.

4. Protecting Your Settlement Funds

• Attorney Fees and Costs: Federal law requires that fees and litigation costs be paid before the state lien. Your lawyer should segregate these amounts and seek court approval to ensure they’re deducted first.
• Non-Medical Damages: Clearly allocate portions of the settlement to non-medical damages in your release and settlement agreement to prevent DPHHS from claiming those dollars.

Steps to Navigate a Medicaid Lien

1. Engage Counsel Early: Hire a personal injury attorney experienced with Medicaid lien issues in Montana.
2. Notify DPHHS Promptly: Within 30 days of your claim, send notice to DPHHS’s Third-Party Liability Division.
3. Request Lien Statement: Ask DPHHS for an itemized statement of medical assistance paid.
4. Negotiate Reduction: If any billed services are unrelated or duplicative, dispute them with supporting documentation.
5. Allocate Settlement: In settlement documents, separate medical damages from pain and suffering and attorney fees.
6. Obtain Court Approval: File a motion in court (if required) to approve the distribution of settlement proceeds, ensuring fees and costs are paid first.
7. Finalize Payment: Work with DPHHS to issue payment of the final lien amount once the settlement is approved.

Helpful Hints

• Keep thorough records of all medical bills and proof of Medicaid payments.
• Maintain a calendar reminder for the 30-day notification deadline.
• Request an itemized medical payment history from DPHHS to verify the lien amount.
• Negotiate to exclude amounts paid by other insurers or erroneously paid services.
• Ensure your attorney drafts settlement language that clearly allocates amounts to non-medical damages.
• Confirm DPHHS’s lien release once you satisfy the lien to avoid future claims.