Short Answer

In North Carolina, a medical provider lien is a legal claim by your doctors or hospitals against your personal injury settlement for accident-related treatment. Valid provider liens attach to your settlement and must be paid from it, but state law caps the total paid to medical providers at no more than 50% of the funds remaining after attorney’s fees and case costs are paid. Health plans (Medicare, Medicaid, and the State Health Plan) have separate reimbursement rights that can apply in addition to provider liens.

Understanding the Problem

In North Carolina personal injury cases, can you keep your full settlement if your doctors treated you on credit and now say they have liens on your case? Here, you are settling your claim, your providers assert liens, and your health insurer says it must be repaid. You also must receive a single lump-sum payment rather than separate checks to pay bills or fees.

Apply the Law

North Carolina law lets medical providers assert a lien on personal injury recoveries for reasonable charges related to the injury. To be enforceable, providers must give written notice and provide an itemized bill on request before funds are disbursed. Your attorney must hold settlement funds in trust, pay approved fees and costs, and then resolve valid liens. The combined payout to medical providers under the lien statutes cannot exceed 50% of the amount left after attorney’s fees and costs. Government health payers (Medicare, Medicaid, and the State Health Plan) have separate statutory or federal rights to reimbursement that may apply alongside or outside the 50% provider-lien cap. Disputes can be resolved in the courts if needed.

Key Requirements

• Valid lien notice: A provider who treated you for accident-related care must give written notice of its claim and, on request, provide an itemized statement before funds are disbursed.
• Attorney’s fees first: The lawyer’s approved fee and case costs are paid first from the settlement; liens are addressed from the remaining amount.
• 50% cap on provider liens: The total paid to all medical providers under the lien statutes is limited to 50% of the post-fee/cost balance; if liens exceed that, they are prorated.
• Health plan reimbursement: Medicare, Medicaid, and the State Health Plan have separate reimbursement rights that may not be limited by the 50% provider-lien cap.
• Forum for disputes: If providers or payers disagree about amounts, your attorney can withhold disputed funds and seek court direction (through the Clerk of Superior Court or Superior Court).

What the Statutes Say

• North Carolina Gen. Stat. § 44-49 (Medical liens; notice and itemized charges) - Creates provider liens and requires notice and itemization.
• North Carolina Gen. Stat. § 44-50 (Distribution; 50% cap) - Limits total provider-lien payout to no more than half of the net recovery after fees/costs.
• North Carolina Gen. Stat. § 108A-57 (Medicaid third-party liability) - Establishes Medicaid’s right to reimbursement from third-party recoveries.
• North Carolina Gen. Stat. § 135-48.37 (State Health Plan subrogation) - Gives the State Health Plan recovery rights that can operate outside provider-lien caps.

Analysis

Apply the Rule to the Facts: Because your providers treated you on credit and gave lien notice, your lawyer must protect valid liens from the settlement. Your attorney’s fee and case costs come off the top; then, all provider liens together cannot take more than 50% of what remains, and they share that amount pro rata if necessary. Your health insurer’s repayment right depends on the plan: Medicare/Medicaid/State Health Plan follow separate statutes and federal rules and may require repayment regardless of the 50% provider-lien cap. The single lump-sum settlement does not change these repayment duties.

Process & Timing

1. Who files: Providers do not file a court case; they serve written lien notice and itemized bills. Where: Notice is sent to the liability insurer and/or your attorney. What: Your attorney holds settlement funds in trust and documents all bills, plan claims, and fees. When: Before any client disbursement, your lawyer must verify liens and plan claims and calculate the 50% cap.
2. Your attorney negotiates with providers and health plans, seeks reductions when appropriate, and prorates provider liens if their total exceeds the cap. Timing varies; coordination with Medicare/Medicaid/State Health Plan can add weeks.
3. If any amount remains disputed, your attorney may hold just the disputed portion and ask the court (through the Clerk of Superior Court or Superior Court) to apportion or decide entitlement. Final distributions are then issued with a closing statement.

Exceptions & Pitfalls

• Government payer claims: Medicare, Medicaid, and the State Health Plan have statutory or federal rights that may not be limited by the 50% provider-lien cap.
• Notice and itemization: A provider that fails to give proper notice or won’t provide an itemized bill on request risks an unenforceable lien.
• Multiple liens: When liens exceed the cap, providers are paid pro rata; do not prefer one provider over another without a legal basis.
• No “separate checks”: You cannot bypass liens by asking the insurer to pay bills or fees directly; the lump-sum settlement still must satisfy valid liens and plan claims.
• Holdbacks: If a dispute exists, only withhold the disputed amount; promptly distribute the undisputed balance to avoid delay.

Talk to a Personal Injury Attorney

If you're navigating medical liens and health plan paybacks from a personal injury settlement, our firm has experienced attorneys who can help you understand your options and timelines. Call us today to discuss your case.

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.