Short Answer

In North Carolina, your net settlement is the total settlement minus your attorney’s fee and case expenses, then minus valid medical liens and reimbursement claims. By statute, your attorney’s fee is paid first and is capped at one-third of the recovery. Properly perfected medical provider liens are then paid from the remaining funds, typically pro rata if there isn’t enough to pay all liens in full. Government program liens (Medicare, Medicaid, State Health Plan) must be addressed before disbursement.

Understanding the Problem

You’re deciding whether to accept a bodily injury settlement that sits just below your minimum target. After your attorney’s fee and the medical liens you know about, your estimated take-home is only a few thousand dollars. You’re unsure if more liens exist, and your attorney is making one last effort to improve the offer. You want to know how the math works so you can make an informed yes-or-no decision.

Apply the Law

North Carolina law requires that settlement funds be distributed in a set order. A lien is a legal claim against your recovery that must be paid out of the settlement. Health care provider liens can attach if the provider properly perfects its rights. Your attorney’s fee comes off the top (up to one-third by statute), then case expenses, then valid liens and reimbursement claims are paid from the remainder. If the remainder is too small to pay every perfected provider lien in full, they typically share pro rata. Disputes about amounts or priority can be resolved through the courts if needed.

Key Requirements

• Attorney’s fee priority: Your lawyer’s lien is paid first and may not exceed one-third of the settlement.
• Perfection of medical liens: Providers must properly assert their lien (including an itemized statement and notice) before they are entitled to payment from the settlement.
• Order of payment: After attorney’s fee and case costs, pay government liens and valid provider liens from what remains; if insufficient, providers are usually paid pro rata.
• Government program liens: Medicare, Medicaid, and the State Health Plan have statutory rights that must be honored before you receive funds; these can delay disbursement until final amounts are confirmed.
• Contractual reimbursement: Private health plans or MedPay may claim reimbursement depending on plan terms and applicable law; these must be verified and negotiated as appropriate.

What the Statutes Say

• North Carolina Gen. Stat. § 44-49 (Medical provider liens) - Allows certain providers to claim a lien on personal injury recoveries if properly perfected.
• North Carolina Gen. Stat. § 44-50 (Attorney lien and distribution) - Gives attorney fees priority (capped at one-third) and directs pro rata payment of perfected provider liens from the remainder.
• North Carolina Gen. Stat. § 108A-57 (Medicaid reimbursement lien) - Establishes Medicaid’s right to recover medical assistance paid from third-party settlements.
• North Carolina Gen. Stat. § 135-48.37 (State Health Plan subrogation) - Recognizes the State Health Plan’s recovery rights from liable third parties.

Analysis

Apply the Rule to the Facts: Start with the insurer’s offer as the gross settlement. Subtract your attorney’s fee (up to one-third) and case expenses. From the remainder, your lawyer must pay any confirmed Medicare/Medicaid/State Health Plan claims and any perfected provider liens; if there isn’t enough, providers generally share pro rata. Because you may have additional, unknown liens, your actual take-home could change until all lienholders respond and negotiations conclude.

Process & Timing

1. Who files: Your attorney. Where: Managed through the attorney’s trust account; disputes may be brought in North Carolina’s courts if needed. What: Collect written lien notices and itemized statements; request final lien amounts from Medicare, Medicaid (NC DHHS), State Health Plan, providers, and any plan asserting reimbursement. When: Initiate lien audits before you accept the offer; allow several weeks for responses.
2. Negotiate reductions and confirm perfection. Many providers and plans will reduce to reflect attorney’s fees and the limited funds available; expect 2–8 weeks depending on the lienholder.
3. Finalize disbursement. Your attorney issues a settlement statement showing the fee, costs, each lien payment, and your net amount, then disburses funds from the trust account.

Exceptions & Pitfalls

• Not every medical bill is a lien. Providers must properly assert and support their claim; unperfected claims may not be payable from your settlement.
• Government liens are different. Medicare, Medicaid, and the State Health Plan have statutory rights and procedures; you usually cannot disburse funds until they issue a final amount.
• If funds are short, providers are commonly paid pro rata from the remainder after fees and costs; failing to notify all lienholders can cause problems later.
• Private health plans and MedPay reimbursement depend on contract terms and governing law; some plans are negotiable while others may not be.
• Wrongful death cases follow different rules. Medical expense payments are capped by statute and subject to additional limits not applicable to personal injury settlements.

Talk to a Personal Injury Attorney

If you're dealing with a settlement offer and medical liens, 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.