The Montana Supreme Court ruled that the Montana Department of Public Health and Human Services (the Department) was not precluded from seeking to recover amounts paid on behalf of a deceased Medicaid recipient from a person who received the deceased recipient’s property by distribution despite the Department’s failure to present a timely creditor’s claim against the estate to the probate court. Montana Dept. Pub. Health & Human Serv. v. Johnson, DA 25-0240 (Mont. Dec. 2, 2025).
In April 2023, Florence Pound died intestate at age 77. The Department had paid $5,360.89 in Medicaid benefits on Florence’s behalf after she had reached age 55. Florence’s home, which was the sole asset of her estate, was valued at $200,000 at the time of her death. Her daughter, Minta Johnson, was her sole heir. Minta applied for probate on May 1, 2023. As personal representative for the estate, Minta published a notice to creditors on May 12, 19, and 26, 2023, in a local newspaper pursuant to Mont. Code Ann. § 72-3-801. The Department presented its creditor’s claim to recover the Medicaid benefits from Florence’s estate on September 13, 2023, one day following the expiration of the four-month period for creditors to file timely claims under section 72-3-801. The probate court denied the Department’s claim and distributed the estate to Minta.
The Department filed a lawsuit against Minta in district court seeking to recover Medicaid benefits under Mont. Code Ann. § 53-6-167(2), which states that it may assert a claim against a person who has received property of the Medicaid recipient by distribution or survival. The district court entered summary judgment in favor of Minta, finding that the Department’s claim was untimely under section 72-3-801. In addition, the district court held that the Department’s claim was barred by issue preclusion because the issues before the district court were identical to those that the probate court had decided, and Minta was in privity with the decedent. The Department appealed.
In a de novo review, the Montana Supreme Court noted that the Department has a duty arising from federal legislation to recover Medicaid benefits paid to a recipient after their death to ensure that the program remains adequately funded. In evaluating whether the Department was barred from filing an action under Mont. Code Ann. § 53-6-167(2) following the probate court’s denial of its untimely creditor’s claim, the court recognized that, to the extent possible, it must harmonize statutes that touch on the same subject matter and give effect to each of them.
Mont. Code Ann. § 53-6-167(1) states that the Department shall present a claim against the Medicaid recipient’s estate within the time specified in the published notice to creditors in an estate proceeding for the total amount paid. In addition, Mont. Code Ann. § 53-6-167(2) states that the Department may bring an action in district court to collect the amount paid on the decedent’s behalf against a person who has received the deceased Medicaid recipient’s property by distribution. Mont. Code Ann. § 53-6-167(6) states that the Department may seek recovery under either subsection 53-6-167(1) or subsection 53-6-167(2), or both, until its claim is satisfied in full.
The court rejected Minta’s assertion that the mandatory language used in subsection 53-6-167(1)—that the Department shall present a timely claim in the estate proceeding—meant that, if the Department’s claim was untimely, it was precluded from seeking to recover the amount owed from her under subsection 53-6-167(2). According to the court, such an interpretation would ignore the express cause of action created by subsection 53-6-167(2) and render that subsection meaningless because it operates only after the decedent’s property has passed through a probated estate or other arrangement to the decedent's survivor, heir, assignee, or beneficiary. The court found that the legislature intended to provide the Department with wide latitude to recover Medicaid payments and that subsection 53-6-167(2) was an alternate path. Section 53-6-167 creates two separate claims: one against the estate of the Medicaid recipient and an alternative one against a person who received property from the Medicaid recipient’s estate.
The court also noted that medical service providers have one year to present their claims to the Department, which is sometimes incompatible with the Department’s duty to recover Medicaid payments made on behalf of a deceased recipient. Interpreting the four-month statutory period for presenting a claim against an estate, set forth in section 72-3-803, as a bar against recovery under subsection 53-6-167(2) would defeat the plain language and substance of section 53-6-167 and hinder the Department in fulfilling its duty to recover Medicaid payments paid on behalf of recipients after their deaths.
Further, the court ruled that the Department’s claim under subsection 53-6-167(2) was not barred by issue preclusion. The probate court lacked the jurisdiction to consider the Department’s claim against Minta under subsection 53-6-167(2), and the issues addressed before the probate court were not identical to the issues the Department raised in the district court.
The court reversed and remanded with an instruction to enter a judgment in favor of the Department.
Subscribe to the Knowledge Bank.
