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Click on your state for a brief summary of that state's laws affecting or impacting subrogation recoveries.
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Montana Subrogation Laws
Sections
State Subrogation
Made Whole Doctrine
Common fund
Collateral Source Rules
Hospital Lien Act
Medicaid Statute
State Subrogation
YES, equitable and contractual
Very concerned with preventing double recovery, but recognizes that this only occurs after the insured has been made whole. Thus, subrogation is only allowed after the insured has been made whole (Swanson v. Hartfor Ins. Co. of Midwest, 46 P.3d 584 (Mont. 2002)).
Made Whole Doctrine
YES, cannot contract around
Very strict in not allowing recovery until the insured has been made whole, regardless of contract. Also, being “made whole” includes attorney’s fees and costs – insured must recover all losses and costs of litigation/fees. (See Skauge v. Mountain States Tel. & Tel. Co., 565 P.2d 628 (Mont. 1977) and Swanson v. Hartford Ins. Co. of Midwest, 46 P.3d 584 (Mont. 2002)).
Common fund
YES, the doctrine applies
Requirements for establishing a common fund: (1) one party must create, reserve, or increase a common fund, (2) that party must incur legal fees in establishing the common fund, and (3) the common fund must benefit ascertainable, non-participating beneficiaries. Mountain W Farm Bureau Mut Ins Co v Hall, 308 Mont 29, 32; 38 P3d 825, 827 (2001).
Collateral Source Rules
Mont. Code Ann. §27-1-308 governs
The statute describes the procedure for when collateral source payments can be deducted, but states that it does not apply to a collateral source that has a subrogation right, taking health insurance out of the equation.
Hospital Lien Act
- Mont. Code Ann. §71-3-1114: hospitals have a lien for the values of services/products provided
- An attorney’s lien has priority over a hospital lien, and the hospital is not liable for attorneys’ fees and litigation costs
- Mont. Code Ann. §71-3-1115: the hospital must serve written notice upon the interested parties
- No statutory or case law references to balance billing
Medicaid Statute
- Mont. Code Ann. §53-2-612(1): the department has a lien upon money paid by a third party to a benefits recipient to the extent that the money represents payment for medical expenses
- Reduction: Mont. Code Ann. §§53-2-612(3)(a/c): this lien is subordinate to the lien of an attorney. From the amount collected by the department or recipient from legal proceedings or settlement, reasonable attorneys’ fees and costs must first be deducted and paid. Unless the department and the recipient agree to a different settlement, the amount previously paid as medical assistance by the department, less a pro rata share of attorney fees and costs, must be deducted next and paid to the department, but only to the extent that the amount paid does not exceed the portion of the amount that represents payment for medical expenses. The remainder is paid to the recipient
- Mont. Code Ann. §53-2-612(4): a recipient must notify the department within 30 days of asserting a claim against a third party