Short Answer

In North Carolina, you finalize a lien reduction by giving the lienholder complete settlement documentation, asking for a written approval of the reduced payoff, and keeping the disputed funds in your attorney’s trust account until approval issues. If the lienholder (such as Medicaid) will not agree, you can ask a Superior Court judge to determine the proper lien amount and authorize distribution.

Understanding the Problem

You settled a North Carolina personal injury claim and asked for a Medicaid subrogation lien reduction. You already sent the gross settlement, attorney fee percentage, costs, other liens, and a chiropractic lien with an agreed reduction. You’re waiting for the agency or provider to approve the final reduced payoff so funds can be disbursed.

Apply the Law

North Carolina law recognizes statutory medical provider liens and Medicaid subrogation rights that attach to personal injury recoveries. A lienholder is entitled to be paid from settlement proceeds, but only for valid, properly noticed charges and only up to the amount allowed by statute. Your attorney should hold enough of the settlement in trust until the lien is resolved and, if needed, seek a court order to determine the correct payoff. The main forum for any court determination is Superior Court, and when a petition is used to bring the issue before the court, respondents generally have 20 days after Rule 4 service to answer before a hearing can be noticed.

Key Requirements

• Validate the lien: Confirm the lienholder’s legal basis, itemized charges, dates of service, and compliance with notice requirements.
• Provide full settlement data: Send the gross settlement, attorney fees, costs, and all competing liens so the lienholder can calculate an allowed reduction.
• Request and document reductions: Ask for hardship, pro rata, or statutory reductions and obtain written approval of the final payoff.
• Hold disputed funds in trust: Do not disburse the contested portion until the lien is released or a court order authorizes payment.
• Seek court allocation if needed: If the parties cannot agree (especially for Medicaid), move in Superior Court for an order determining the lien amount and allocation.

What the Statutes Say

• N.C. Gen. Stat. § 44-49 (Health care provider liens) - Allows providers to assert a lien on personal injury recoveries for reasonable charges when statutory steps are met.
• N.C. Gen. Stat. § 44-50 (Enforcement and distribution) - Addresses attorney liens, payment priority, and how provider liens are satisfied from settlement funds.
• N.C. Gen. Stat. § 108A-57 (Medicaid subrogation liens) - Establishes Medicaid’s recovery rights and allows court determination of the proper lien share when parties disagree.

Analysis

Apply the Rule to the Facts: You have already supplied the core settlement figures and an agreed chiropractic reduction, which are essential to any lien review. The next step is to obtain a written payoff approval from the Medicaid unit, keeping enough in trust to cover the claimed amount. If the agency delays or disputes the reduction, filing a narrowly focused motion in Superior Court to determine the appropriate Medicaid share will let a judge set the final payoff so you can disburse the funds.

Process & Timing

1. Who files: Injured party (through counsel). Where: Superior Court in the North Carolina county where the case was filed or where venue is proper. What: A verified motion/petition to determine lien amount/allocation; serve the agency/provider under Rule 4. When: After you’ve given complete settlement details and good‑faith reduction requests; if impasse persists, file promptly.
2. After Rule 4 service, respondents generally have 20 days to answer. If no resolution occurs, notice a hearing; time to hearing varies by county.
3. Present the settlement breakdown, competing liens, itemized medicals, and your proposed allocation; the court issues an order setting the lien payoff. Use the order to obtain written releases and disburse remaining funds.

Exceptions & Pitfalls

• Medicaid vs. Medicare vs. private ERISA plan: Each follows different federal/state rules; confirm the payor before negotiating.
• Incomplete documentation: Missing itemized charges or settlement data slows approvals; send a complete packet on the first request.
• Premature disbursement: Do not release disputed funds; keep them in trust until you have a written payoff or court order.
• Multiple lienholders: Coordinate pro rata reductions and get written releases from each to avoid duplicate or later claims.
• Notice/service errors: For court relief, use Rule 4 service on each lienholder; improper service can delay the order.

Talk to a Personal Injury Attorney

If you're dealing with a settlement lien and waiting on a final reduction approval, 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.