How can I make sure Medicare and my secondary insurer’s liens are paid from my personal injury settlement?: Answered for North Carolina personal injury cases
How can I make sure Medicare and my secondary insurer’s liens are paid from my personal injury settlement? - North Carolina
Short Answer
In North Carolina, you protect yourself by identifying every payer with reimbursement rights (Medicare, Medicaid, providers, and any plan that paid your bills), verifying the accident-related charges, applying North Carolina’s lien-cap rules, and paying in the correct order. Medicare must be notified early, its “final demand” must be paid on time, and North Carolina’s provider-lien cap limits how much of your settlement can go to medical providers after attorney’s fees.
Understanding the Problem
You want to know how, in North Carolina, you can ensure Medicare and a secondary insurer are properly reimbursed from your personal injury settlement without losing control of the entire recovery. The decision point is this: before any settlement money is disbursed, can you coordinate lien/resolution so Medicare and any other payers are paid correctly and on time? One key fact here is that your treatment has been billed to Medicare and a secondary insurer, so both may claim reimbursement.
Apply the Law
North Carolina law recognizes statutory medical liens in injury cases and sets a priority and cap on how much of a settlement can go to those liens after attorney’s fees. Separate rules apply to government programs like Medicare and Medicaid. Practically, most lien work happens outside of court (with Medicare’s recovery contractor or plan administrators), but a North Carolina court can resolve disputes when needed.
Key Requirements
Identify and notify lienholders: Confirm who paid your accident-related bills (Medicare, Medicaid, providers, ERISA/self-funded plans, or other insurers) and send formal notice.
Verify related charges: Request itemized statements; remove unrelated or duplicate charges; require providers to supply bills and records as a condition of lien rights.
Apply priority and caps: Pay a reasonable attorney’s fee first; then apply North Carolina’s cap to provider liens; handle Medicare/Medicaid separately because their rights are statutory and priority-based.
Negotiate reductions: Seek reductions for attorney-fee “procurement costs,” hardship, or billing errors; confirm any plan’s right to reimbursement under applicable law.
Pay and document: After settlement, obtain Medicare’s final demand and pay it by the deadline; issue payments to other approved lienholders; secure written releases.
N.C. Gen. Stat. § 44-50 (Distribution and caps) - After a reasonable attorney’s fee, no more than a capped portion of the remainder may be used to pay provider liens; courts can resolve disputes.
Apply the Rule to the Facts: Because Medicare and a secondary insurer have paid some of your treatment, both may assert reimbursement. We would open a recovery file with Medicare, verify only accident-related charges, and obtain a final demand to pay on time. For the secondary insurer, we would confirm whether it truly has a reimbursement right under applicable law; if it does, we would seek appropriate reductions. Provider liens in North Carolina are capped after attorney’s fees, which helps when the settlement is tight.
Process & Timing
Who files: Your attorney. Where: Medicare’s Benefits Coordination & Recovery Center (BCRC) and the secondary insurer/plan administrator; providers are contacted directly. What: Medicare Proof of Representation/Consent to Release, request for Conditional Payment summary, itemized bills/records from providers, and plan documents from the secondary insurer. When: Start immediately after intake; do not wait for settlement.
Audit charges, dispute unrelated items with BCRC and providers, and request written lien/reimbursement statements. After settlement is reached, request Medicare’s Final Demand and provide the settlement details. Typical verification and negotiations can take several weeks; county practices do not control these administrative timelines.
Distribute funds from the attorney trust account: pay a reasonable attorney’s fee first, then Medicare’s Final Demand by its deadline, then valid liens subject to North Carolina’s cap and any negotiated reductions. Obtain written satisfaction/release letters for your file.
Exceptions & Pitfalls
Not all “secondary insurers” have a lien: In North Carolina, many private health plans cannot recover from a personal injury settlement unless a federal or statutory right applies; confirm plan status before paying.
Medicare Advantage vs. Medigap: Medicare Advantage plans often assert reimbursement similar to Medicare; Medigap policies typically do not. Identify the product type early.
Provider-lien prerequisites: Providers must supply itemized bills and records and limit claims to reasonable, accident-related charges; failure can jeopardize lien rights.
Overpaying beyond the cap: Do not pay providers more than North Carolina’s capped share after attorney’s fees unless required by superior statutory rights.
Timing missteps: Do not disburse client funds before receiving Medicare’s Final Demand; late payment can add interest.
Fee-sharing concerns: If attorneys share the fee, it should come from the agreed attorney-fee portion and does not expand lienholders’ rights or reduce statutory caps.
Conclusion
To make sure Medicare and your secondary insurer are paid from a North Carolina injury settlement, notify every potential lienholder, verify only accident-related charges, and follow North Carolina’s distribution rules: pay a reasonable attorney’s fee first, then satisfy Medicare’s final demand on time, and pay valid provider liens within the statutory cap. Next step: have your attorney open a Medicare recovery file, request the Conditional Payment summary, and gather all provider and plan lien documentation before any disbursement.
Talk to a Personal Injury Attorney
If you’re dealing with Medicare and insurance reimbursement claims against your settlement, our firm has experienced attorneys who can help you understand your options and timelines. Reach out today at (919) 341-7055.
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.
