Liens on Personal Injury Recoveries in Montana: What You Need to Know

If you recover money after a Montana injury, other parties may claim a legal right to part of that money. This article explains common types of liens, how those claims can affect the money you actually receive, and practical steps to protect your recovery.

Detailed Answer

What is a lien in this context?

A lien is a legal claim against money from a settlement, jury verdict, or judgment. A lien does not always require a separate lawsuit; some liens arise from statute, contract, or a provider’s asserted right to be paid from the recovery. If the lien is valid and enforceable, the holder can demand payment from settlement proceeds before you receive your share.

Common types of liens that arise in Montana personal injury cases

• Health-care provider or hospital liens: Some hospitals, medical providers, or health systems use lien agreements or rely on state statutes and case law to assert they are owed medical charges from a plaintiff’s recovery. Whether a provider has an enforceable lien depends on the written agreement, applicable statutory law, and timing.
• Private health insurance subrogation or reimbursement claims: Private insurers often pay medical bills while reserving the right to be reimbursed from a later personal injury recovery. Those rights usually arise by contract or state common law. If the insurer is an ERISA-governed plan, federal ERISA rules can control how the plan enforces its claim.
• Medicaid (Montana Medicaid) recovery and liens: Montana’s Medicaid program and federal Medicaid rules require state programs to seek reimbursement from third-party recoveries for medical assistance paid on a beneficiary’s behalf. That reimbursement right can mean Medicaid asserts a claim against settlement proceeds. For general Montana Medicaid information, see the Montana Department of Public Health and Human Services: https://dphhs.mt.gov/. For the Montana Code Annotated and statute search, see: https://leg.mt.gov/bills/mca_toc/.
• Medicare conditional payment recovery: If Medicare paid for medical care related to the injury, federal rules allow Medicare to recover conditional payments out of a settlement. Federal rules and CMS procedures govern Medicare’s right to repayment and the timing of that demand. See the Centers for Medicare & Medicaid Services overview on recovery: https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview.
• Attorney charging liens and contractual fee claims: Many contingency-fee agreements allow the attorney to be paid from a recovery. In many jurisdictions, an attorney has a charging lien (a claim against the judgment or settlement) or an equitable right to fees. Review your fee agreement carefully to see how the attorney’s fee and costs are calculated and paid.
• Judgment liens and creditors: If you already owe money or a creditor has a judgment against you, that creditor may try to reach proceeds from a personal injury recovery. The applicability and priority of such claims depend on Montana lien and judgment enforcement law.

How liens can affect the money you actually receive

Liens reduce your net recovery. Common effects include:

• Lower net proceeds: Valid lien holders can be paid before you get your share. The larger the lien, the smaller your compensation after fees and costs.
• Priority disputes: Multiple lien holders may claim the same funds. Priority depends on law, the timing of claims, the type of lien, and any controlling federal rules (for example, Medicare or ERISA).
• Delay to distribution: Defendants or insurers may escrow settlement money until lien disputes resolve. That delays your receipt of funds.
• Settlement leverage: Lien holders may pressure you or the defendant to pay their claim in full or to accept a reduced payoff amount. Insurers may factor liens into settlement offers.
• Obligation even if not itemized: If you sign a release that broadly discharges claims and you later discover a lien, you may still be responsible for paying it unless the settlement agreement and releases address liens specifically.

How Montana law and federal rules interact

Montana law governs state-created liens and state procedures. Federal law controls in some areas — for example, ERISA plans and Medicare have federal protections and recovery processes that can limit how state law applies. You should identify whether the claimant is a private insurer, public program (Medicaid/Medicare), or a private provider because each category follows different rules and timelines.

For statutory text and Montana-specific provisions, search the Montana Code Annotated at the Montana Legislature site: https://leg.mt.gov/bills/mca_toc/. For guidance on Medicaid recovery procedures, consult Montana DPHHS: https://dphhs.mt.gov/. For ERISA and federal plan issues, see the U.S. Department of Labor ERISA resources: https://www.dol.gov/agencies/ebsa.

Practical options when a lien exists

• Demand written proof: Ask the lien claimant for a written itemization and legal basis for the lien (contracts, bills, payment history, statutory citation).
• Negotiate reductions: Many lien holders will accept less than billed charges. Hospitals, insurers, and government programs sometimes compromise to avoid litigation or administrative delay.
• Escrow disputed funds: You can request that the insurer or defendant hold funds in escrow while you resolve lien disputes.
• Seek a court order or interpleader: If parties cannot agree, a court can determine lien validity and priority, and direct distribution.
• Address liens in settlement documents: A well-drafted settlement agreement will identify liens, allocate responsibility for payment, and include language that protects you from future claims.

Helpful Hints

• Collect documentation early: Keep medical bills, insurance explanations of benefits (EOBs), correspondence with insurers, and copies of any signed agreements.
• Ask the insurer and any treating provider to state their claim in writing and to list the legal basis and exact amount demanded.
• Do not sign a broad release without confirming who will be paid from the settlement and how liens will be handled.
• Negotiate lien payoffs before finalizing a settlement. A modest reduction in the lien is common if you or your attorney negotiate firmly and present an accurate breakdown of reasonable medical costs and damages.
• If Medicaid or Medicare might have a claim, contact the appropriate agency early. Those agencies have administrative processes and timelines for submitting a claim and negotiating repayment.
• Understand attorney fees: Confirm how your lawyer’s fee and case costs will be allocated relative to lien payments. Ask for a net-proceeds worksheet showing expected distribution.
• Get releases and lien satisfaction in writing: After payment, obtain written lien releases or satisfactions so you do not face later claims on the same recovery.
• Speak with a lawyer experienced in lien resolution: Liens can involve state statutes, federal law, and contract interpretation. If lien amounts are large relative to your recovery, consider counsel who handles lien negotiations or litigation.

Resources: Montana Code Annotated search: https://leg.mt.gov/bills/mca_toc/. Montana Department of Public Health & Human Services (Medicaid): https://dphhs.mt.gov/. Centers for Medicare & Medicaid Services — recovery overview: https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview. Montana State Bar (find an attorney): https://www.montanabar.org/.

Disclaimer: This article provides general information about Montana law and common issues related to liens on personal injury recoveries. It is not legal advice, and it does not create an attorney-client relationship. For advice about your specific situation, consult a licensed attorney in Montana.