What steps should a claimant take to identify and resolve medical liens on a personal injury settlement? (North Carolina)
What Steps Should a Claimant Take to Identify and Resolve Medical Liens on a Personal Injury Settlement in North Carolina?
Medical liens can dramatically affect how much you take home from a personal injury settlement. In North Carolina, certain health care providers and payers have legal rights to be reimbursed from your settlement before you receive funds. Below is a clear, step-by-step guide to identifying, validating, negotiating, and resolving those liens under North Carolina law.
Detailed Answer
1) Make a complete list of all providers and payers
Gather every name connected to your treatment and bills after the injury:
Government payers (Medicaid, Medicare, VA/TRICARE)
Private health insurance or self-funded employer health plans
Workers’ compensation carrier (if it paid benefits)
Auto insurance medical payments (MedPay), if applicable
Pull your Explanation of Benefits (EOBs), itemized bills, and any collection notices to ensure no provider is missed.
2) Ask each potential lienholder to confirm its claim in writing
Send written requests asking for:
A statement that they claim a lien or reimbursement right
An itemized ledger of charges and payments, including insurance write-offs
Proof of legal basis (statute or contract)
North Carolina grants certain medical providers a statutory lien on personal injury recoveries. See N.C. Gen. Stat. § 44-49 (medical provider liens) and § 44-50 (limits and priorities).
3) Verify whether each claim is legally valid (and perfected)
Not every bill is a lien. In North Carolina:
Statutory provider liens (certain hospitals, physicians, etc.) arise under § 44-49. These providers must give written notice and an itemized statement of charges before funds are disbursed.
Medicaid has a statutory reimbursement right under § 108A-57. Notify the North Carolina Department of Health and Human Services (DSS/Medicaid) of your claim and request a lien amount.
Medicare has federal reimbursement rights. You must report your claim to Medicare, obtain a “Conditional Payment” amount, and then a “Final Demand” before disbursement.
Workers’ compensation carriers may have a lien on third-party recoveries under § 97-10.2.
Private health insurance/ERISA plans may claim contractual reimbursement. Ask for plan documents to confirm whether the plan is self-funded (often enforceable under federal law) or insured (state law defenses may apply).
4) Apply North Carolina’s lien limits and priority rules
North Carolina caps how much statutory medical provider liens can take from your settlement:
Your attorney’s fee is paid first and is superior to medical liens (capped at one-third of the recovery under § 44-50).
After attorney’s fees, the total of all statutory provider liens (§ 44-49) cannot exceed 50% of the remaining recovery (§ 44-50). If those liens together exceed that cap, they are paid pro rata from that 50% pool.
Example: Settlement $30,000; attorney fee (1/3) $10,000; remainder $20,000. Statutory provider liens share up to 50% of $20,000 = $10,000. You keep at least the other $10,000 (subject to any different type of superior federal or contractual claim, like Medicare or certain ERISA plans).
Note: Government and workers’ compensation liens follow their own statutes and may not be subject to the § 44-50 cap. Review each lien’s governing law.
5) Resolve special categories
Medicaid (N.C. DHHS). Provide notice, request a lien/claim amount, and discuss allocation to medical expenses. See § 108A-57.
Medicare. Report the claim, request a Conditional Payment Letter via the Medicare portal, dispute unrelated charges, then obtain and pay the Final Demand (interest can accrue if unpaid timely).
Workers’ compensation. Notify the carrier; if needed, seek equitable reduction by court under § 97-10.2.
Private health plans/ERISA. Request the plan’s reimbursement provision and proof the plan is self-funded. Analyze defenses (e.g., make whole/common fund doctrines may be preempted for self-funded ERISA plans). Negotiate reductions where possible.
6) Negotiate reductions and compromises
With documented settlement limits, ask lienholders to reduce:
Apply the § 44-50 cap and pro rata sharing to statutory provider liens.
Ask providers to honor insurance write-offs, remove duplicate charges, and offer hardship reductions.
Challenge unrelated or non-injury treatment included in a lien amount.
Use Medicare/Medicaid and workers’ comp processes to dispute or compromise where the law allows.
7) Pay in the correct order and document releases
Before releasing funds to yourself, ensure:
Attorney’s fees and costs are paid first (per § 44-50).
Statutory provider liens are paid next, up to the 50% cap of the post-fee remainder, pro rata if necessary.
Government and workers’ comp liens are resolved per their statutes.
Contractual plan claims are addressed and negotiated.
You obtain written lien releases or zero-balance letters for your records.
If lienholders disagree, your attorney can hold disputed funds in trust and, if needed, ask a court to decide priority and amounts.
8) Common pitfalls to avoid
Ignoring Medicare/Medicaid—this can trigger interest, penalties, or double damages.
Paying providers who do not have a valid lien before paying those who do.
Disbursing your settlement before receiving final written lien amounts and releases.
Overlooking radiology groups, labs, or ambulance services that bill separately.
Helpful Hints
Keep a single spreadsheet listing every provider, claimed amount, legal basis (statute/contract), and status of negotiations.
Ask providers for itemized statements to catch unrelated or duplicate charges.
Confirm insurance write-offs and payments—providers cannot claim amounts already written off by contract.
Use the § 44-50 cap and pro rata rule to reach fair reductions with multiple providers.
Notify Medicaid, Medicare, and workers’ comp early to avoid delays in getting final lien amounts.
Get every agreement in writing; keep all correspondence and receipts.
Bottom line: Properly identifying and resolving medical liens protects your recovery and keeps you compliant with North Carolina law, including § 44-49, § 44-50, § 108A-57, and (if applicable) § 97-10.2.
We can help
If you have a settlement on the horizon, do not let liens eat it up. Our North Carolina personal injury attorneys handle lien identification, validation, negotiation, and final resolution every day. We protect your recovery and keep you in compliance. Call us now at 919-313-2737 for a consultation.
