Short Answer

Yes. In North Carolina, medical providers have statutory liens on personal injury recoveries, but those liens are limited by rules that often allow reductions. After paying a reasonable attorney’s fee (capped at one-third of the recovery), providers are paid from the balance and together cannot take more than half of that balance. Medicaid and Medicare have separate rules, and providers must meet certain requirements before enforcing a lien.

Understanding the Problem

You want to know if, under North Carolina law, you (or your lawyer) can reduce the amount a hospital or other provider claims from your accident settlement. Here, a law firm asked a hospital for an updated lien balance on [DATE]. The issue is whether, and how, that lien can be negotiated or limited before settlement funds are disbursed.

Apply the Law

North Carolina law gives hospitals, doctors, and certain other providers a lien on any personal injury settlement or judgment for the “reasonable charges” of accident-related care. Before a provider can enforce that lien, it must provide requested medical records and an itemized statement of charges to the patient or attorney without charging for those copies. When settlement funds arrive, a reasonable attorney’s fee (capped at one-third) is paid first. All perfected medical liens together are then paid from the remaining funds, but cannot exceed 50% of that post-fee balance; if there isn’t enough to pay all liens in full, they are paid pro rata. Medicaid and Medicare reimbursement follow separate statutory and federal rules.

Key Requirements

• Valid lien and perfection: The provider must have a qualifying accident-related charge and must furnish requested records and an itemized bill at no cost to preserve lien rights.
• Attorney’s fee first: A reasonable attorney’s fee (no more than one-third of the recovery) is paid before medical liens.
• 50% cap on liens: The total paid to all medical lienholders cannot exceed 50% of the balance after the attorney’s fee.
• Pro rata distribution: If the post-fee balance is insufficient, lienholders share proportionally rather than “first in, first out.”
• Special payers: Medicaid (state lien) and Medicare (federal recovery) follow specific reimbursement rules that can differ from the general 50% cap.
• Negotiation permitted: Providers often accept reductions consistent with the statutory cap, documentation issues, or hardship considerations.

What the Statutes Say

• North Carolina Gen. Stat. § 44-49 (Medical provider liens) - Creates liens for reasonable charges and requires providers to furnish records/itemized statements upon request.
• North Carolina Gen. Stat. § 44-50 (Distribution of recovery) - Attorney’s fee paid first (up to one-third), then medical liens paid pro rata and capped at 50% of the post-fee balance.
• North Carolina Gen. Stat. § 108A-57 (Medicaid reimbursement) - Sets Medicaid’s right to reimbursement and allocation rules for settlements.
• North Carolina Gen. Stat. § 28A-18-2 (Wrongful death) - Special caps apply to medical and hospital expenses in wrongful death recoveries.

Analysis

Apply the Rule to the Facts: Because the firm requested an updated hospital lien on [DATE], the provider must supply an itemized statement and records without charging copying fees. Once a recovery is made, the attorney’s fee (up to one-third) comes off the top, and the hospital’s lien—together with other perfected provider liens—is limited to no more than 50% of the remaining funds, shared pro rata. The hospital may negotiate below that amount, and Medicaid/Medicare claims, if any, must be handled under their specific rules.

Process & Timing

1. Who files: The injured person (through counsel). Where: Private negotiation with providers; disputes go to the Superior Court in the appropriate North Carolina county. What: Request and review an up-to-date, itemized lien statement and medical records; compute the statutory post-fee cap and a proposed pro rata distribution. When: Do this before disbursing any settlement funds; procedures and agency response times (e.g., Medicaid) can change.
2. Provide the proposed distribution to all lienholders, showing the attorney’s fee, the post-fee balance, the 50% cap, and each provider’s pro rata share; request written reductions where appropriate. Expect back-and-forth over 2–6 weeks, depending on the provider or agency.
3. If a lienholder refuses to cooperate or overreaches, consider filing an interpleader or declaratory action in Superior Court for a court-ordered distribution consistent with North Carolina law.

Exceptions & Pitfalls

• Wrongful death is different: special statutory caps on medical/hospital expenses apply; confirm rules before negotiating.
• Medicaid and Medicare have distinct reimbursement frameworks; the general 50% cap does not automatically control federal claims.
• Perfection defects: if a provider refuses to furnish records or itemized charges upon request or tries to charge for copies, that undermines lien enforcement.
• Pro rata sharing: do not pay one lienholder in full to the detriment of others; distribute proportionally after applying the cap.
• Attorney liability risk: disbursing funds without addressing known liens can expose you or your attorney to claims; obtain written releases.

Talk to a Personal Injury Attorney

If you're dealing with medical liens after an accident and need help applying North Carolina’s lien caps and distribution rules, our firm has experienced attorneys who can help you understand your options and timelines. Call us today.

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.