Montana has already answered the question every discharge planner eventually asks: no, you cannot be paid for the introduction, and the company offering would be breaking state law by paying you. Under the Montana Viatical Settlement Act at MCA 33-20-1313, a licensee may not pay or offer to pay a finder’s fee, commission, or other compensation to a physician, attorney, accountant, or other person providing medical, legal, or financial planning services to the policyholder or insured, in connection with a policy insuring an individual with a terminal illness or condition.
That is unusually clean. Most states leave hospital staff to work the question out from the federal Anti-Kickback Statute, hospital policy, and professional codes. Montana wrote the prohibition into the insurance code, which means a settlement company approaching your department with an offer is telling you something about itself.
What you can do is tell a family that the option exists, in a written list, without ranking it and without naming a company. In a state where the nearest skilled nursing bed may be two hours away and recent published cost-of-care surveys put the median semi-private rate in the range of roughly $9,000 to $10,500 per month, families need to know the full range before they surrender a policy for a fraction of what it might be worth. This guide covers 42 C.F.R. 482.43, the three-midnight and 100-day mechanics, DPHHS timing, and how to present options without steering.
In This Article
Montana’s statute already drew the line
The regulator is not a department of insurance in the usual sense. Insurance in Montana is overseen by the Commissioner of Securities and Insurance, an office held by the separately elected Montana State Auditor. The Viatical Settlement Act sits at Title 33, chapter 20, part 13 of the Montana Code Annotated, with the short title at 33-20-1301, contract terms at 33-20-1308, and the conduct requirements at 33-20-1313.
Section 33-20-1313 does four things. It prohibits a licensee from paying a finder’s fee, commission, or other compensation to physicians, attorneys, accountants, or other persons providing medical, legal, or financial planning services to the policyholder or insured, in connection with policies insuring individuals with a terminal illness or condition. It prohibits discrimination in entering settlement contracts on grounds including race, age, sex, national origin, creed, religion, occupation, and marital or family status. It prohibits false or misleading advertising and solicitation. And it prohibits a licensee from selling another insurance product to the contract holder without the commissioner’s approval — a provision aimed at the practice of converting settlement proceeds into an annuity sale.
Montana also has a separate fraud provision addressing viatical settlement fraud at MCA 33-1-1304. Between those, a Montana discharge planner has a concrete answer for two hard moments: when a vendor offers something, and when a family asks whether a company is legitimate. Statutes get renumbered, so if you are putting this into a department policy, confirm current text with the Commissioner’s office. Our page on life settlement licensing in Montana covers it for families, and consumer complaints route through the office described on our page on Montana insurance department consumer help.
The federal discharge planning requirement
Hospital discharge planning is governed by 42 C.F.R. 482.43, a Medicare Condition of Participation substantially rewritten by the CMS discharge planning final rule effective in November 2019 to implement the IMPACT Act.
The hospital must maintain a discharge planning process covering all inpatients and identifying those likely to suffer adverse health consequences without adequate planning. The discharge plan must be developed with the patient and, where applicable, the patient’s representative or support person. Where post-acute care is indicated, the hospital must assist the patient and family in selecting a post-acute provider by using and sharing data on applicable quality and resource use measures relevant to the patient’s goals of care and treatment preferences, and must document that the list was presented. And the hospital must not specify or otherwise limit the qualified providers available to the patient, while disclosing any home health agency or skilled nursing facility in which it holds a disclosable financial interest.
In frontier Montana that last requirement collides with reality in an uncomfortable way. When there are two facilities within 150 miles, the practical choice is already narrow, and it is tempting to shorten the conversation further. Resist it. The obligation is to present what exists and let the family choose, and the same discipline applies to financial options: give the full menu, name no company, document the family’s selection. Networks like Billings Clinic under Intermountain Health, Benefis Health System in Great Falls, Bozeman Health, and Logan Health in Kalispell each anchor a region of Critical Access Hospitals, and the referral patterns between them are well worn — which makes documented neutrality more important, not less.
Three midnights, observation, and the MOON
Medicare Part A covers skilled nursing facility care only after a qualifying inpatient hospital stay of at least three consecutive days. The admission day counts; the discharge day does not. Time in observation status does not count, because observation is an outpatient service billed under Part B regardless of how many nights the patient spends in a hospital bed.
This is invisible from the bedside and it is the single most common cause of a family’s fury at discharge. Three nights classified as observation yield no SNF benefit at all.
The NOTICE Act, Public Law 114-42, created the Medicare Outpatient Observation Notice — the MOON, CMS form 10611 — to force disclosure. A patient receiving observation services as an outpatient for more than 24 hours must be given the MOON no later than 36 hours after observation services begin, accompanied by an oral explanation and a signature acknowledging receipt. Timely delivery is compliance; comprehension is practice. Say the sentence plainly: this stay may not qualify the patient for Medicare nursing home coverage.
In Montana the transfer pattern adds a specific hazard. A patient stabilized at a Critical Access Hospital and transferred to a regional center may accumulate nights across two facilities, and families assume the nights add up. Whether they do depends on status classification and the sequence of admissions, not on the calendar. Bring utilization review in before the family starts counting on their own arithmetic. There is also an evolving appeals process arising from federal litigation over patients reclassified from inpatient to observation; confirm current procedures with your compliance function.
| Situation | What Montana law or Medicare says |
|---|---|
| A settlement company offers you a referral fee | MCA 33-20-1313 bars paying medical, legal, or financial service providers a finder’s fee |
| A company wants to sell the family an annuity with the proceeds | 33-20-1313 bars selling another insurance product without commissioner approval |
| Observation nights before a SNF stay | Do not count toward the three-midnight requirement |
| MOON delivery deadline | Within 36 hours of observation services beginning, with oral explanation |
| Days 21–100 of a SNF stay | Daily coinsurance reset annually; $209.50 per day in 2025 |
| Medicaid determination standard | 45 days generally, 90 with a disability determination |
| Home-based alternative to a facility | Big Sky Waiver, through the Senior and Long Term Care Division |
| Median semi-private nursing facility cost | Roughly $9,000–$10,500 per month in recent surveys |
The 100-day count in a frontier state
After a qualifying stay, Part A covers up to 100 days of skilled nursing care per benefit period. Days 1 through 20 carry no coinsurance; days 21 through 100 carry a daily coinsurance CMS resets annually, which was $209.50 per day in 2025. Confirm the current-year figure. A benefit period ends after 60 consecutive days with no inpatient or skilled care.
Families need the same two corrections everywhere: 100 days is a maximum rather than a promise, and coverage stops when skilled need stops, which is often well before day 100. And the back eighty days cost roughly $16,800 at the 2025 rate.
Montana adds a cost families do not anticipate. When the available facility is 90 or 150 miles from home, visiting is a full-day undertaking, and in winter it may be impossible for stretches. Families frequently respond by moving a spouse closer to the facility temporarily, which is an unbudgeted housing cost during a period they had assumed was fully covered. Naming that at the start is squarely within your role and it lets a family plan rather than discover.
Day 101, or the day skilled coverage ends, is the cliff: private pay at the facility rate until Medicaid eligibility is established. That interval is where assets get liquidated in the wrong order, and where an in-force life insurance policy either becomes a resource or gets destroyed for a small fraction of its value. Our page on nursing home Medicaid spend-down explains the sequence for families.
DPHHS, the Big Sky Waiver, and application timing
Montana Medicaid is administered by the Department of Public Health and Human Services, with long-term services and supports through the Senior and Long Term Care Division. Home and community-based services for older adults and people with physical disabilities run through Montana’s Big Sky Waiver, which for many rural families is a better fit than a facility two hours away — and it is an option worth naming early rather than treating institutional placement as the default.
Timing follows the federal standard at 42 C.F.R. 435.912: generally 45 days for a determination, 90 days where a disability determination is required. Long-term care applications commonly run past the standard because five years of financial records must be verified under the 60-month look-back at 42 U.S.C. 1396p(c). Federal law permits retroactive coverage for up to three months before the application month under 42 U.S.C. 1396a(a)(34); confirm how Montana applies it with DPHHS.
The rule that decides whether a policy is a Medicaid problem is federal and worth memorizing. Under 20 C.F.R. 416.1230, the cash surrender value of life insurance is a countable resource unless the total face value of all policies on that insured is $1,500 or less, in which case the cash value is excluded outright. Above that face-value threshold, the entire cash value counts. Term insurance with no cash value is not a resource at all. The countable resource limit for a single institutionalized applicant is commonly applied at $2,000, with a community spouse resource allowance between an indexed federal minimum and maximum — the 2025 range ran $31,584 to $157,920. Confirm current figures rather than quoting a chart.
And the distinction to hand off rather than resolve: a sale at fair market value is not an uncompensated transfer and creates no look-back penalty, but the proceeds become a countable resource in the month after receipt. That is a question for the family’s elder law attorney or Medicaid planner. See our Montana Medicaid planner guide.
Presenting options without steering
The method: a written menu, unranked, with no company names, plus a note in the record. The menu should cover personal savings and family contribution; VA Aid and Attendance for a wartime veteran or surviving spouse; an existing long-term care insurance policy; a reverse mortgage on a home the patient will not return to; an accelerated death benefit or chronic illness rider that may already sit on a life insurance policy at no extra cost; a policy loan; surrender; sale in the regulated secondary market; the Big Sky Waiver as an alternative to facility placement; and Medicaid. Add the Area Agency on Aging and the state’s Aging and Disability Resource Center as neutral referral points.
Put the accelerated death benefit rider at the top. Many policies issued in the past twenty-five years carry one, it is already paid for, it requires only a call to the carrier, and it generates no commission for anyone — which is precisely why nobody with something to sell brings it up. Our page on accelerated death benefit riders is written for families.
Then document: funding options discussed, written list provided, no specific vendor recommended, family referred to their own advisers. If a family asks which company to use, the answer is that you cannot recommend one and that any provider or broker must be licensed with the Commissioner of Securities and Insurance, which they can verify themselves.
On screening, so you do not raise a hope that cannot be met: institutional buyers generally will not bid below roughly $100,000 of death benefit because fixed underwriting and servicing costs do not scale down; the typical candidate is an impaired insured in their late seventies or older; and term insurance whose conversion window has closed has no value to anyone. If those screens pass, three documents produce a real answer — the policy cover page, the most recent annual statement or in-force illustration, and the current premium notice. Nobody legitimate needs a Social Security number, bank details, or a medical file to say whether a policy is worth pursuing, and an upfront evaluation fee is a warning sign. Montana imposes no estate or inheritance tax, so there is no state death tax argument for holding a policy the family cannot afford. Nothing here is medical, legal, tax, or financial advice or a recommendation about any patient’s care. Pine Lake Life Solutions provides education and a free policy review and does not purchase policies; the review is free at (305) 209-7183, and that is a number for the family to call.
Frequently Asked Questions
A broker offered our case management team a referral arrangement. What do I do?
Decline and route it to compliance. MCA 33-20-1313 prohibits a Montana licensee from paying a finder’s fee, commission, or other compensation to persons providing medical, legal, or financial planning services to the insured in connection with policies insuring terminally ill individuals. A company making that offer is proposing something the state prohibits, which tells you what you need to know about them.
Can I mention a life settlement at all without steering?
Yes, if you present it as one line on a written menu of funding options, decline to rank the options, name no company, and document that a written list was provided and no vendor was recommended. That approach is consistent with the freedom-of-choice requirement in 42 C.F.R. 482.43 and with the collaborative planning the rule contemplates.
The patient was at a Critical Access Hospital for two nights and transferred here for two more. Do the nights add up?
It depends on status classification and the sequence of admissions, not on the calendar. Observation time never counts, and combining stays across facilities is not automatic. Bring utilization review in before the family starts relying on their own count, because a wrong assumption here shows up as an unexpected private-pay demand from the facility.
Should I mention the Big Sky Waiver instead of a nursing facility?
Include it on the menu rather than recommending it. Montana’s home and community-based waiver for older adults and people with physical disabilities is frequently a better fit for rural families than a facility two hours from home, and it is an option many families do not know exists. Presenting it alongside the others preserves the choice while widening it.
How long before Medicaid pays?
The federal standard at 42 C.F.R. 435.912 is 45 days, or 90 days if a disability determination is needed, and long-term care applications routinely take longer because DPHHS must verify five years of records under the 60-month look-back. Retroactive coverage may reach back up to three months before the application month; confirm how Montana applies it.
What is the fastest way to tell a family a policy is not sellable?
Look at the face amount. Below roughly $100,000 of death benefit, institutional buyers generally will not bid, because the fixed cost of underwriting, legal review, and servicing does not scale down. Say so directly rather than letting the family spend a week on it, and redirect them to any accelerated death benefit rider already attached to the policy.
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Related Reading
- Life Settlement Licensing Montana
- Montana Insurance Department Consumer Help
- Nursing Home Medicaid Spend Down
- Medicaid Planner Life Settlement Guide Montana
- What Is An Accelerated Death Benefit Rider
- Montana Medicaid Asset Income Limits
- Snf Business Office Life Settlement Guide Montana
- Surrender Vs Sell Policy
Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.