Short Answer

You can settle, but your lawyer must protect any statutory liens and reimbursement claims before disbursing money to you. In North Carolina, that usually means holding part of the settlement in the attorney trust account until Medicare, Medicaid, the State Health Plan, and medical providers issue final lien figures or demands. Some claims (like Medicare and Medicaid) must be repaid under law, and certain provider recoveries are capped, so careful holdbacks and written releases are essential.

Understanding the Problem

You’re asking whether you can settle a North Carolina personal injury claim before health insurers send their final lien ledgers, and what that means for getting your money. The decision point is whether funds can be safely disbursed now or must be held until the lien numbers arrive and are resolved.

Apply the Law

Under North Carolina law, certain payors (for example, Medicare, Medicaid, and the State Health Plan) have statutory rights to be repaid from liability settlements. Medical providers may also assert statutory claims against the settlement. Your attorney must identify and protect these claims, negotiate when appropriate, and pay them from settlement funds before distributing the balance. Some claims have repayment deadlines once the agency issues a final demand. North Carolina law also caps certain medical provider recoveries from settlements, but those caps do not limit Medicare or the State Health Plan’s statutory recovery rights.

Key Requirements

• Identify all potential lienholders early: Medicare, Medicaid, the State Health Plan, private plans, and providers who treated the injury.
• Protect and hold funds: Keep enough of the settlement in the attorney trust account to pay known or asserted claims until final ledgers/demands arrive.
• Honor statutory priorities and exceptions: Some public program claims must be repaid by law and are not limited by typical medical provider caps.
• Apply caps where allowed: North Carolina caps certain medical provider recoveries from settlements; your lawyer should apply the cap correctly.
• Resolve and document: Negotiate reductions where available, obtain written confirmations/releases, then disburse the remaining funds.
• Special situations: Court approval may be required for settlements involving minors or incompetents; different allocation rules apply in wrongful death cases.

What the Statutes Say

• N.C. Gen. Stat. § 108A-57 (Medicaid third-party liability) — Medicaid payments are recoverable from liable third-party settlements.
• N.C. Gen. Stat. § 135-48.37 (State Health Plan subrogation) — The State Health Plan may recover medical payments from liable third-party settlements; not limited by typical provider caps.
• N.C. Gen. Stat. § 28A-18-2 (Wrongful death damages) — Sets medical/burial expense rules and caps for wrongful death proceeds; Medicare reimbursement is still required.

Analysis

Apply the Rule to the Facts: If you settle before final lien ledgers arrive, the safe and common practice is to escrow enough to cover all potential lien claims. For example, if Medicare paid for treatment, your lawyer holds back the estimated Medicare amount until a written final demand issues and is paid. If Medicaid or the State Health Plan paid, their statutory reimbursement must also be satisfied from the holdback before releasing the balance to you.

Process & Timing

1. Who files: Your attorney. Where: No court filing is needed to request lien ledgers; the lawyer contacts Medicare’s recovery contractor, N.C. DHHS (Medicaid), the State Health Plan, private plans, and providers. What: Request claim/payment ledgers and negotiate reductions where available. When: Begin immediately upon settlement; place funds in the attorney trust account and wait for written final demands/releases.
2. On receipt of each final demand, pay it from the escrowed funds. Some agencies impose short payment deadlines and may assess interest if not timely paid. Timelines vary by agency and can change.
3. After all liens/claims are paid and written confirmations are received, your attorney disburses the remaining balance to you and documents the file.

Exceptions & Pitfalls

• Medicare/Medicaid/State Health Plan claims are not limited by the typical medical provider cap; do not over-disburse assuming a cap applies to those programs.
• Disbursing before you have final written demands can expose you and your lawyer to repayment risk and possible interest. Use escrow holdbacks.
• Provider billing disputes or coding errors can change amounts. Request itemization and negotiate when appropriate before paying.
• Wrongful death vs. personal injury: different allocation and cap rules apply; in wrongful death, medical expense payments are limited by statute, but Medicare reimbursement still must be made.
• Minors/incompetents: court approval may be required; the Clerk of Superior Court may scrutinize lien payments and allocations.

Talk to a Personal Injury Attorney

If you’re resolving an injury claim and need to protect Medicare, Medicaid, or provider liens, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at 919-313-2737.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney–client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.