Short Answer

In North Carolina, Medicaid has a statutory lien against your personal injury recovery for accident-related medical bills it paid. By law, the lien is limited to the portion of your settlement allocated to medical expenses and is generally capped by a rebuttable presumption of up to one-third of the total recovery. Medicaid’s claim is also reduced to reflect your attorney’s fees and case costs. If you and Medicaid disagree, a Superior Court judge can decide the medical-expense share.

Understanding the Problem

You settled a North Carolina personal injury case and asked Medicaid to reduce its lien. You sent the settlement amount, your attorney fee percentage, costs, and other liens, and you’re waiting on a decision. The narrow question is: after a case settles, how does North Carolina determine the dollar amount Medicaid gets repaid from the settlement?

Apply the Law

North Carolina law gives the state a lien and subrogation right against third-party recoveries (settlements or judgments) for Medicaid-paid, accident-related medical care. The default rule presumes up to one-third of the total recovery represents medical expenses, and Medicaid can recover the lesser of that amount or what it actually paid for your accident-related treatment. That presumption can be challenged in Superior Court with evidence showing the medical-expense portion is lower. Medicaid’s recovery must also account for your attorney’s fees and litigation costs so you do not bear all the procurement expense.

Key Requirements

• Covered payments: Medicaid paid for medical care related to the injury that produced your settlement.
• Recovery exists: You obtained money by settlement or judgment from a liable party.
• Cap/presumption: The lien cannot exceed the portion of the recovery allocated to medical expenses; by statute, a rebuttable presumption treats up to one-third of the total recovery as medical damages.
• Procurement costs: Medicaid’s payback is reduced to reflect your attorney’s fees and case costs.
• Dispute forum: If there’s no agreement, either side may ask the Superior Court to determine the medical-expense allocation.
• Payment timing: Your attorney must resolve the lien before disbursing settlement funds.

What the Statutes Say

• North Carolina Gen. Stat. § 108A-57 (Medicaid lien and subrogation) - Creates Medicaid’s lien on third-party recoveries, sets the medical-expense allocation rule and court challenge process.
• North Carolina Gen. Stat. § 44-49 (Medical provider liens) - Addresses provider liens and their conditions in personal injury cases.
• North Carolina Gen. Stat. § 44-50 (Distribution; attorney’s fee and lien limits) - Describes attorney fee priority and caps affecting medical liens in settlements.

Analysis

Apply the Rule to the Facts: Because Medicaid paid for your neck and back treatment and you recovered a settlement, North Carolina’s lien statute applies. Medicaid will compare what it paid to the presumptive medical share of your settlement (up to one-third) and claim the lesser amount, then account for your attorney’s fees and costs. You have already submitted the settlement statement and lien information, which Medicaid uses to calculate and, where appropriate, reduce its claim. If the reduction request is denied or not aligned with the medical-expense share, you can seek a Superior Court allocation.

Process & Timing

1. Who files: The injured Medicaid member (through counsel). Where: Medicaid’s Third Party Recovery unit (North Carolina Department of Health Benefits). What: Provide the settlement statement, attorney fee agreement or percentage, itemized costs, paid Medicaid claims list, and other lien details; submit a written reduction/allocation request. When: Immediately after settlement and before any client disbursement.
2. If no agreement on the lien amount, file a petition asking the Superior Court to determine the portion of the recovery that compensates medical expenses. Courts may set hearings on a relatively short timeline; practices can vary by county.
3. After written approval from Medicaid or a court order, your attorney disburses: fees and costs, the approved Medicaid lien amount, then any remaining funds per the settlement.

Exceptions & Pitfalls

• If you want less than the statutory presumption for medical expenses, be ready to present evidence (for example, significant wage loss or non-medical damages) to the Superior Court.
• Do not disburse client funds until the Medicaid lien is resolved in writing or by court order; premature disbursement can create repayment risk.
• Medical provider liens (like chiropractic bills) follow different statutes and caps; coordinate them with the Medicaid lien so total distributions comply with North Carolina law.
• Make sure Medicaid has accurate settlement documents and costs; missing or incorrect figures can increase the claimed lien.

Talk to a Personal Injury Attorney

If you're dealing with a Medicaid lien after a North Carolina personal injury settlement, our firm has experienced attorneys who can help you understand your options and timelines. Call us 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.