Short Answer

Usually yes. In North Carolina, your attorney can release the undisputed portion of your settlement after paying fees and costs, while holding enough in trust to satisfy valid liens. Medical provider liens must be honored and are capped by statute, and certain statutory lienholders (like Medicaid or the State Health Plan) have separate repayment rules. Any amount that is disputed must stay in the trust account until the lien is resolved.

Understanding the Problem

You’re resolving a North Carolina personal injury case. A chiropractor’s lien has been negotiated. Your health insurer asserts a statutory lien, and negotiations with the insurer are ongoing. You want to know whether you can receive any money now or if you must wait until the insurer’s lien is finalized.

Apply the Law

North Carolina law allows partial distribution of settlement funds so long as valid liens are protected. Medical providers can assert liens on personal injury recoveries if they give proper notice. Attorneys must withhold enough to satisfy valid, perfected liens and cannot disburse disputed funds. Private medical provider liens are subject to a statutory cap tied to your net recovery after attorney’s fees and costs. By contrast, certain statutory lienholders—such as Medicaid and the State Health Plan—have specific reimbursement rights that are not governed by the same cap and must be resolved before the reserved funds are released. The attorney’s trust account is the holding place for any disputed amount.

Key Requirements

• Identify and verify liens: Confirm who has a lien (providers, Medicaid, State Health Plan) and the claimed amounts; ensure providers gave proper written notice to perfect a lien.
• Hold disputed funds in trust: Your attorney must keep any disputed portion of the settlement in the trust account until the lien is resolved.
• Honor statutory caps for provider liens: Private medical provider liens are limited to a percentage of the net recovery after fees/costs; total provider liens cannot exceed that cap.
• Treat statutory health benefit liens separately: Medicaid and the State Health Plan have statutory repayment rights that can operate outside the medical-provider cap and must be satisfied or reserved for before final disbursement.
• Disburse the undisputed balance: After attorney’s fees/costs and appropriate reserves for liens, the remaining undisputed funds may be paid to you.

What the Statutes Say

• North Carolina Gen. Stat. § 44-49 (Medical provider liens) - Allows certain providers to assert liens on personal injury settlements when proper notice is given.
• North Carolina Gen. Stat. § 44-50 (Enforcing provider liens; cap) - Requires paying perfected provider liens from the recovery and caps their total to a portion of the net after fees and costs.
• North Carolina Gen. Stat. § 108A-57 (Medicaid lien) - Authorizes Medicaid recovery from third-party settlements; applies specific allocation rules.
• North Carolina Gen. Stat. § 135-48.37 (State Health Plan subrogation) - Grants the State Health Plan subrogation/reimbursement rights against liable third-party recoveries.

Analysis

Apply the Rule to the Facts: Your chiropractor’s lien is a provider lien. Once negotiated, your attorney can pay that agreed amount from the settlement. Your health insurer’s “statutory lien” (for example, Medicaid or the State Health Plan) must be addressed under its statute. While negotiations continue, your lawyer should hold enough in trust to cover the highest reasonable lien amount, but may distribute the undisputed balance to you after deducting fees/costs and honoring the provider lien cap for private medical bills.

Process & Timing

1. Who files: Your attorney. Where: Communications go to lienholders (e.g., the medical providers, North Carolina Division of Health Benefits for Medicaid, or the State Health Plan recovery unit). What: Provide settlement details and itemized bills; request final lien/demand figures or reductions. When: Typically immediately after settlement; agencies often take several weeks to issue final figures.
2. Your attorney disburses attorney’s fees/costs, pays any finalized liens, and holds the disputed amount in the trust account while negotiations with the statutory lienholder continue.
3. After a written reduction or final demand is received and paid (or satisfied from the reserve), your attorney releases the remaining reserve to you with a closing statement.

Exceptions & Pitfalls

• Medicaid and the State Health Plan have statutory rights that may not follow the private medical-provider cap; expect different calculations and reserve accordingly.
• Do not disburse disputed funds early; premature payment can expose you and your attorney to repayment claims and penalties.
• Ensure providers perfected liens by proper notice; unperfected claims may not require withholding, but verify before disbursing.
• If liens could exceed the remaining net, partial distribution may be limited until reductions are secured.

Talk to a Personal Injury Attorney

If you’re waiting on lien negotiations and need to know what can be paid out now, our firm can help you plan partial distributions and protect your rights. Contact us today to discuss your options and timelines.

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.