Healthcare providers in Idaho save lives every day, yet securing payment for their crucial services involves navigating complex legal frameworks under the Idaho Patient Act (IPA) and updated medical lien laws. The IPA was signed into law in 2020[i] and has since been amended to reconcile with Idaho’s medical lien laws found in Idaho Code section 45-701, et seq.  This article will provide the historical background for the IPA, its subsequent amendments, and an analysis of the most recent case law interpreting the IPA. These statutes seek a vital balance between safeguarding patients from surprise bills and aggressive debt collection practices, while ensuring providers receive fair compensation.[ii]

Idaho Patient Act Origin

The IPA arose from stories of Idaho patients blindsided by unexpected fees and overly aggressive collections.[iii] The driving force behind the IPA was Melaleuca, Inc., a large Idaho-based company, and its CEO Frank VanderSloot, whose interest was sparked by the experience of a Melaleuca employee and a court order to garnish her wages.[iv]

This employee faced an unexpected medical debt of $294.00, but was later confronted with a staggering request for nearly $5,600.00 in attorney fees from a debt collection law firm pursuing her for the unpaid balance.[v] This grossly disproportionate escalation highlighted a problem that needed to be addressed:  patients were being blindsided by medical debt collections inflated with steep fees and legal costs.[vi] Due to these unfair practices, VanderSloot and Melaleuca championed change, advocating for legislation to curb these exploitative practices and protect Idahoans from financial ruin caused by deceptive or aggressive medical debt collections.[vii]

As a result, the IPA, through House Bill 515, was proposed and passed, coming into effect on January 1, 2021. It featured robust protections designed to ensure patients receive timely, accurate, and understandable medical billing statements; curtail unethical collection tactics, including excessive attorney fee awards disproportionate to debts owed; require providers to submit claims and communicate charges within strict timelines; and impose meaningful limitations on collections lawsuits and liens until billing obligations are met.[viii] The purpose of the IPA was to protect consumers from collection actions for debts they were unaware of, from healthcare providers whom they do not recognize, and thus govern fair collection of debts owed to healthcare providers to inhibit excessive attorneys’ fees and combat abuses of the collections process.[ix] Some of the limitations of the original IPA included the prohibition of medical providers from engaging in an “extraordinary collection action” without first submitting medical charges to the patient’s insurance within 45 days from the date of service.”[x]

Since its inception, healthcare providers have faced challenges in reconciling Idaho’s medical lien laws with the IPA. That was the case until March 28, 2024, when the legislature resolved the dilemma by permitting compliant medical liens so long as they are filed under new time limits in the lien statute.

Idaho Medical Lien Statute

Idaho’s medical lien statute, enacted in 1941, allows healthcare providers who render treatment to a person injured by the acts of third parties to file a lien against the liable third party to recover for “the reasonable charges for . . . care, treatment and maintenance of an injured person, . . . or to the legal representative of such person, on account of injuries” caused by another person.[xi]  As originally enacted, the medical lien statute required the provider to file its lien either “before, or within ninety (90) days after” the patient’s discharge from the hospital or the last date of medical services provided by a physician.[xii]

The medical lien statute was amended in 2024.[xiii] Now, for the lien to be perfected, the lien must be filed with the relevant county recorder within the statutory time period, which depends on whether the patient has a “third party payor,” which is defined as “a health carrier []  or  a self- funded plan”  includes “multiple third-party payors when applicable.”[xiv]

In the event that the patient does not have a third-party payor, the lien must be filed before or within ninety (90) days of discharge.[xv] But, if the patient does have a third-party payor, section 45-702(2(b) provides that a lien:   

[M]ay be filed during the ninety (90) day period after either the date the patient was discharged from the hospital or the last day services were provided to the patient as a result of the injury but only after all contracted billing adjustments for the services as ordinarily used with that third-party payor are made,[xvi] provided that such lien may additionally be filed during the thirty (30) days after the hospital has received payment from the third-party payor.[xvii]

Lien filers must also notify liable parties within one (1) day after filing the lien with copies of the statement of lien,[xviii] and enforce or release liens within two (2) years after the lien was filed.[xix]

The net effect of these 2024 amendments to the medical lien statute is that a medical lien can now be filed thirty days after payment from the third-party payor.  Until these new time limits were implemented, the IPA prohibited taking “an extraordinary collection action” until after the 90-day period for filing the medical lien expired.  Thus, providers had to choose between the lien and the potential IPA penalties.[xx] There was simply no way to comply with both the IPA and the medical lien statute and medical providers had to choose between the lien and the potential IPA penalties.

With the 2024 amendments to both statutes, providers may file medical liens and other collection actions in cases involving third-party liability, under defined timelines, without violating the IPA. This carve-out represents a practical balance between protecting patient interests while upholding providers’ rights to lien enforcement by giving “the providers an additional time period for filing a medical lien after a citizen’s health insurance has processed the medical bills to ensure that medical providers get paid all of a fair negotiated value for their services. It also prevents providers from overbilling and imposing inflated charges on the liability insurance companies when private health insurance is available to pay.”[xxi]

Why Compliance Matters

Since its passing, the IPA has faced legal challenges. This is especially true for medical liens in effect prior to the 2024 amendments to the IPA and the medical lien statute.  As seen through the Idaho Supreme Court’s recent decision in DeKlotz v. NS Support, LLC, No. 51326, 2025 WL 2395022 (Idaho Aug. 19, 2025),noncompliance risks lien invalidation, litigation costs, and penalties weakening providers’ financial standing and threatening care sustainability, emphasizing why the new statutes are more practical.

In July of 2021, Guy Deklotz suffered serious spinal injuries in a car accident.[xxii] Dr. Paul Montalbano, his neurosurgeon, performed emergency surgery successfully repairing Deklotz’s spinal injuries and provided post-operative care with the assistance of a surgical nurse.[xxiii]  DeKlotz received an invoice from Dr. Montalbano and the surgical nurse for the services provided.[xxiv]  At the time of treatment, DeKlotz was insured by Select Health, but instead of billing DeKlotz’s insurance for the cost of his services, in August of 2021, Dr. Montalbano recorded a medical lien pursuant to Idaho Code section 45-704B for the amount of $183,829.60.[xxv]  The medical lien identified NS Support, LLC dba Neuroscience Associates (“NSA”) as a lien claimant, and Dr. Montalbano co-owns NSA with six other neurosurgeons.[xxvi]

After the lien was filed, DeKlotz retained an attorney on the basis that Dr. Montalbano should have sought payment from insurance first.[xxvii] DeKlotz filed a complaint against Dr. Montalbano, seeking declaratory judgment that Dr. Montalbano violated the IPA by failing to bill [his] insurance prior to filing the medical lien, which rendered the lien invalid.[xxviii] He also requested a declaration that the medical lien was invalid because the lien amount of $183,829.60 was not a “reasonable charge,” as required by section 45-704B.[xxix]

Both Deklotz and Dr. Montalbano filed motions for partial summary judgment on the issue of whether the lien was invalid under the IPA.[xxx] Dr. Montalbano argued that the IPA was inapplicable to a lien filed pursuant to Idaho Code section 45-704B, while Deklotz sought summary judgment on his claim that the lien amount was an unreasonable charge.[xxxi] The lower court found that Dr. Montalbano’s lien was not subject to the IPA because the Act only applies to “extraordinary collection actions,” and [this] did not constitute such an action.[xxxii] On the second issue, the lower court determined there was a genuine dispute of material fact whether the lien amount was a “reasonable charge” for purposes of section 45-704B, and held a bench trial on the reasonable charge issue.[xxxiii] During the bench trial, the district court concluded that Dr. Montalbano’s charges were reasonable for the purpose of the statute on the grounds that the legislature intended the phrase “reasonable charges” in the statute to encompass a physician’s actual charges rather than the objective standard of a reasonable person.[xxxiv] Deklotz appealed.

On appeal, the Idaho Supreme Court addressed the issues considered by the district court.  In reaching its decision, the Court confronted the intersection between the IPA and medical lien statutes in effect at the time Dr. Montalbano’s lien was filed—August 2021.[xxxv]

The Court reversed the order of the lower court, finding that “any medical lien filed under § 45-704B is an ‘extraordinary collection action’ within the meaning of the IPA.”[xxxvi]  The Court held that “the IPA prohibits a healthcare provider from engaging in an extraordinary collection action against a patient unless the healthcare provider first submits its charges to the patient’s insurance.”[xxxvii] The Court reasoned that Dr. Montalbano’s medical lien constituted “placing a lien on a person’s property or assets,” by recording a medical lien “against any and all causes of action, suits, claims, counterclaims, or demands” DeKlotz had against the driver of the vehicle and his insurance.[xxxviii]Second, the Court held that the lien was recorded in connection with a debt due to the unambiguous language provided in Dr. Montalbano’s standard patient payment contract.[xxxix] Because Dr. Montalbano did not comply with section 48-304 at the time he filed his lien against DeKlotz for his medical services provided, he was precluded from filing a lien, and thus the lien was invalid.[xl]

In reaching this conclusion, the Court did address the fact that at the time Dr. Montalbano filed the medical lien against DeKlotz, it was extremely difficult, if not practically impossible, to meet the requirements of the IPA prior to filing a medical lien pursuant to section 45-704B.[xli]  The Court mentioned that the legislature’s recent amendment to the IPA and section 45-704B specifically address[es] the applicability of the IPA to medical liens and allows for the filing of medical liens as long as certain timeliness requirements are met.”[xlii]  However, the Court stated that “[they] were not at the liberty to disregard the plain language of the IPA,”[xliii] reasoning that “if the statute as written is socially or otherwise unsound, the power to correct it is legislative not judicial.”[xliv]

Because the Court held that the lien filed against DeKlotz was invalid, the Court did not address the issue of whether Dr. Montalbano’s charges were reasonable for purposes of Idaho Code section 45-704B.[xlv] The Court reversed and remanded the district court’s order, denying DeKlotz’s motion for summary judgment and vacating the entry of judgment in favor of Dr. Montalbano.[xlvi]

This decision not only invalidated Dr. Montalbano’s lien but also created a precedent that reshapes Idaho’s medical-debt landscape, at least for those liens filed prior to when the statutory amendments took full effect.

As a result, physicians in Idaho must now follow a strict sequence for collecting medical debt in cases involving third-party liability. They must first bill the patient’s health insurance before resorting to a medical lien or other extraordinary collection methods. The ruling in Deklotz also immediately impacts any pre-2024 liens that were filed without first billing the patient’s insurance. These liens, and the physicians who filed these liens, are now vulnerable to legal challenges due to the fact that they can be declared void. This decision strengthens the position of insured patients in medical debt disputes, especially those arising from personal injury cases.  The precedent makes it easier for patients to challenge questionable billing practices and liens that may have been used to inflate settlement pressure.

Thomas J. Mortell is Co-Managing Partner of Hawley Troxell and has been a member of the firm’s governing board since 2014.

Mr. Mortell chairs the firm’s Health Law Practice Group and serves as general counsel of the Idaho Hospital Association. Mr. Mortell has been listed in the Best Lawyers publication for healthcare since 2013 and was selected in 2016, 2022, and 2024 as Lawyer of the Year for Health Care Law in Boise. He was named to the Idaho Business Review’s 2023 Power List of the Most Influential Business Leaders in Idaho. In 2025, Mr. Mortell was selected as the Boise Metro Chamber of Commerce’s Government Advocate of the Year.

He and his firm represent many hospitals in Idaho and surrounding states. Mr. Mortell’s health care practice focuses on advising hospitals and other health care providers on all aspects of health care law.

On the volunteer side, Mr. Mortell serves as a member of the Board of Directors for the Boise Metro Chamber of Commerce and served as the Chamber’s Board Chair in 2021. He is currently the Chair of the Chamber’s Policy Committee and Board Chair of the Boise Valley Economic Partnership. He also serves on the board of the Idaho Shakespeare Festival as well as the board of Faces of Hope, a non-profit corporation that provides crucial services to those affected by domestic violence.

Jean Schroeder is an associate in the firm’s Litigation and Insurance practice groups. A Boise, Idaho native, Jean earned her undergraduate degree from the University of Arizona and her J.D. from the University of Idaho College of Law in 2023. Before attending law school, she had a successful career as a professional ballerina, a foundation that developed her discipline and strong work ethic.

During law school, Jean received the CALI Award for Excellence in Juvenile Justice in 2021 and was actively involved in the Agricultural Law Society and Inns of Court. Prior to joining Hawley Troxell, she worked as an associate at a Boise-based firm, where she assisted in representing clients in insurance defense, medical malpractice, and general litigation matters. She has experience conducting legal research, drafting briefs for district and appellate courts, and managing discovery and depositions.

In her free time, Jean enjoys spending time outdoors with her husband and family.

[i] I.C. § 48-301.

[ii] I.C. § 48-302.

[iii] Id.

[iv] Nathan Brown, VanderSloot announces outline, sponsors for medical debt bill, Post Register (Sept. 15, 2025), https://www.postregister.com/news/local/vandersloot-announces-outline-sponsors-for-medical-debt-bill/article_6998abe0-2302-5ed7-886f-178729e0adff.html.

[v] Id.

[vi] Id.

[vii] NCL staff, Idaho Patient Act a model for other states for protecting consumers from medical debt, National Consumers League (Mar. 20, 2020), https://nclnet.org/idaho_patient_act/.

[viii] Keith Ridler, Bill targeting predatory medical debt collectors advances (Feb. 19, 2020), https://www.spokesman.com/stories/2020/feb/19/bill-targeting-predatory-medical-debt-collectors-a/.; see also I.C. § 48-302 (2020); Act of Mar. 16, 2020, ch. 139, 2020 Idaho Sess. Laws 426, 426-30.

[ix] I.C. § 48-302 (2020).

[x] I.C. § 48-304(1)(a) (2020).

[xi] I.C. § 45-701 et seq.

[xii] Mar. 28, 2024, ch. 236, 2024 Idaho Sess. Laws 819, 820, 819-822.

[xiii] Id.

[xiv] I.C. § 45-702(2), referencing I.C. § 48-303 (internal citations omitted).

[xv] I.C. § 45-702(2)(a).

[xvi] “Contracted billing adjustments” are the negotiated discounts from the hospital or other providers standard charges and are typically included in the contracts between the third-party payor and the hospital or other provider. The adjusted amount is often called the “contractual adjustment” and is typically the amount paid by the payor to the provider.  From the patient’s perspective, this language is an important addition to the medical lien statute and limits the ability of the provider to collect its standard charges without contractual adjustment.

[xvii] I.C. § 45-702(2)(b).

[xviii] I.C. § 45-702(1).

[xix] I.C. § 45-704.

[xx] See DeKlotz v. NS Support, LLC, No. 51326, 2025 WL 2395022 (Idaho Aug. 19, 2025).

[xxi] House Bill 501 Statement of Purpose (2024).

[xxii] Deklotz,No. 51326, 2025 WL 2395022, *1 (Idaho Aug. 19, 2025).

[xxiii] Id.

[xxiv] Id.

[xxv] Id.

[xxvi] Id. at *2.

[xxvii] Id..

[xxviii] Id.

[xxix] Id.

[xxx] Id.

[xxxi] Id.

[xxxii] Id.

[xxxiii] Id.

[xxxiv] Id.

[xxxv] Id. at n.2.

[xxxvi] Id. at *3.

[xxxvii] Id.

[xxxviii] Id. at *4.

[xxxix] Id.

[xl] Id.

[xli] Id. at *5.

[xlii] Id. at n.3.

[xliii] Id. at *6.

[xliv] Id.

[xlv] Id.

[xlvi] Id.