Short Answer

In North Carolina, valid medical provider liens (including rehab providers) attach to your injury recovery and must be addressed before your lawyer can disburse settlement funds. Confirm the lien is valid and injury-related, apply the statutory caps after attorney’s fees, negotiate a reduction or get a written release, and then pay the approved amount. If a dispute remains, your lawyer should hold the disputed amount in trust and may ask a court to decide who gets paid.

Understanding the Problem

You’re settling a North Carolina personal injury claim and a rehabilitation provider still has a lien tied to a recent service. You want to know if you must pay it now or can get it rescinded so the settlement can close. This is the right place: we’ll focus on what you, the injured claimant, can do to clear that last medical lien so your settlement can be finalized.

Apply the Law

North Carolina law allows medical providers to assert liens on personal injury recoveries for reasonable, injury-related charges. Providers’ liens are subordinate to your attorney’s fees and costs. All medical provider liens together are limited to a capped share of the net recovery and, if multiple providers claim liens, they are paid pro rata within that cap. Disputes over lien validity or amount can be resolved by negotiation, and unresolved disputes can be brought to Superior Court, where the disputed funds can be deposited and the court can order mediation and decide priority.

Key Requirements

• Valid lien notice: The provider must assert a lien tied to your injury claim with clear billing and notice; charges must be reasonable and related to the injury.
• Attorney fees come first: Your lawyer’s fees and litigation costs are paid before any medical liens.
• 50% cap on medical liens: All medical provider liens together cannot take more than one-half of your recovery after attorney’s fees; multiple liens share pro rata.
• Release or payoff needed: To clear title to your settlement funds, obtain a written lien release/rescission or pay the agreed amount and secure a satisfaction.
• Dispute process: If you and the provider disagree, your lawyer should hold the disputed amount in trust and may file interpleader in Superior Court to have a judge decide allocation; courts commonly encourage mediation.

What the Statutes Say

• N.C. Gen. Stat. § 44-49 (Medical provider liens) - Creates liens for injury-related medical charges on personal injury recoveries.
• N.C. Gen. Stat. § 44-50 (Priority and cap) - Attorney’s fees paid first; all medical liens together are capped at a portion of the net recovery and share pro rata.
• N.C. Gen. Stat. 1A-1, Rule 22 (Interpleader) - Allows depositing disputed funds and asking the court to decide competing claims.

Analysis

Apply the Rule to the Facts: Because one rehab lien remains, first confirm it’s for reasonable, injury-related services tied to your claim and properly noticed. Next, calculate the lien room: your attorney’s fees and costs come off the top, and the provider can collect only within the capped share of your net recovery. With most liens withdrawn, there’s likely no pro rata split—so negotiate a reduction and obtain a written release; if the amount is disputed, your lawyer should hold that amount in trust and, if needed, ask the court to resolve it.

Process & Timing

1. Who files: Injured claimant (through counsel). Where: Negotiation is handled privately; disputes go to Superior Court in the county where the civil action is or would be filed. What: Exchange itemized bills/records; request a written lien reduction and release; if needed, file a civil interpleader under Rule 22 and deposit the disputed funds. When: Do this before any client disbursement of settlement funds.
2. If filed, the court typically sets a schedule; judges often direct the parties to mediate. Your attorney keeps undisputed funds moving while holding only the disputed amount in trust.
3. On resolution, obtain a written release/rescission or court order; pay the approved amount from trust and disburse the balance to you.

Exceptions & Pitfalls

• Government or plan rights: Medicare, Medicaid, and certain ERISA/self-funded plans may have separate recovery rights; their rules can differ from state lien caps.
• Non-injury or unreasonable charges: Providers cannot claim unrelated or unreasonable charges; challenge them and request itemized statements.
• Notice and documentation issues: If the provider fails to provide adequate notice or itemization on request, lien enforcement can be affected—use this to negotiate.
• Pro rata math: When multiple liens exist, they share the capped pool pro rata; don’t overpay one provider and short others.
• Settlement timing: Close the settlement with a carve-out by holding only the disputed amount in trust; avoid delaying full disbursement unnecessarily.

Talk to a Personal Injury Attorney

If you’re dealing with a medical or rehab lien that’s holding up your North Carolina 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.