Short Answer

In North Carolina, medical providers and certain payers (like Medicaid and Medicare) can claim repayment from your settlement before you receive funds. Your attorney’s fee (up to one-third by statute) is paid first; then valid medical liens and required reimbursements are paid, often pro rata if the money is not enough. If bills still exceed what’s available, you may remain responsible for balances unless they are reduced by negotiation or barred by other rules.

Understanding the Problem

You want to know what happens in North Carolina if your personal injury settlement cannot cover all accident-related medical charges. Here, the actor is the injured person pursuing a claim; the action is distributing a settlement; and the key timing trigger is when settlement funds are received and must be disbursed to lienholders and payers. One salient fact: your treatment is billed to Medicare and a secondary insurer, and medical liens may be asserted.

Apply the Law

North Carolina law gives healthcare providers a lien on personal injury recoveries for reasonable, accident-related charges. Attorneys’ fees up to one-third come off the top, then valid liens and required reimbursements are paid from the remaining funds. Medicaid (state program) and Medicare (federal program) generally must be repaid from settlements, and unpaid private balances may remain unless reduced or not legally recoverable. The plaintiff’s attorney usually handles lien resolution and distribution; strict notice and repayment timelines can apply, especially for Medicare/Medicaid.

Key Requirements

• Accident-related and reasonable charges: Only reasonable costs tied to the injury can be recovered through a lien.
• Provider compliance: Providers must supply itemized statements and make records available upon request to maintain a lien.
• Priority of fees: Your attorney’s fee (not exceeding one-third of the recovery) is paid before provider liens.
• Pro rata sharing if short: If funds are insufficient, valid lienholders share the remaining settlement proportionally.
• Statutory payer rights: North Carolina Medicaid has statutory reimbursement rights; Medicare also requires reimbursement under federal rules.
• Patient responsibility: Any unpaid balances may remain your responsibility unless reduced, written off, or otherwise limited by law or contract.

What the Statutes Say

• North Carolina Gen. Stat. § 44-49 (Medical provider lien) - Creates a lien for reasonable accident-related medical charges and requires providers to furnish statements/records on request.
• North Carolina Gen. Stat. § 44-50 (Lien priority and distribution) - Gives attorney’s fees priority (up to one-third) and directs distribution of remaining funds to lienholders.
• North Carolina Gen. Stat. § 108A-57 (Medicaid reimbursement) - Requires repayment to North Carolina Medicaid from personal injury recoveries, subject to statutory limits.

Analysis

Apply the Rule to the Facts: Because your treatment involves Medicare and a secondary insurer, expect repayment claims. Your lawyer’s fee (up to one-third) comes off the top, then valid medical liens and Medicaid/Medicare reimbursement claims are paid from what remains. If the settlement cannot cover all, lienholders are typically paid pro rata, and any uncompensated balances may persist unless negotiated down or limited by payer rules (for example, Medicare/Medicaid rules bar certain balance billing).

Process & Timing

1. Who files: The injured person’s attorney. Where: No court filing is required to create these liens; distributions occur from the attorney’s trust account in North Carolina. What: Provide signed authorizations; request itemized provider statements; open Medicare and, if applicable, North Carolina Medicaid recovery files; verify any private plan claims. When: Notify Medicare/Medicaid early; Medicare repayment is typically due within 60 days of the final demand.
2. Obtain and audit lien/claim statements; dispute unrelated or unreasonable charges; and negotiate reductions. Medicare/Medicaid often take several weeks to issue conditional and final demands; provider negotiations may occur in parallel.
3. On settlement, pay the attorney fee first, then disburse the remaining funds to valid lienholders and required reimbursements (often pro rata if short). Issue a written closing statement showing payments and any remaining balances.

Exceptions & Pitfalls

• If a provider does not furnish itemized statements/records after request, its lien may be unenforceable.
• Only accident-related, reasonable charges are recoverable through the lien; challenge unrelated or excessive items.
• Private health insurance reimbursement depends on plan language and governing law; not all plans can recoup under North Carolina law, while some are allowed under federal preemption.
• Medicare/Medicaid have strict repayment rules; ignoring them can trigger interest or penalties and delay your disbursement.
• Fee-sharing between law firms should not increase your agreed contingency fee; you should receive written disclosure and consent.

Conclusion

In North Carolina, your attorney’s fee (up to one-third) is paid first from a settlement, then valid medical liens and required Medicaid/Medicare reimbursements are paid from what remains. If the money is short, lienholders usually share proportionally and unpaid balances can persist unless reduced or limited by law. Next step: complete intake and authorizations so your attorney can immediately open Medicare/Medicaid files, request itemized provider statements, negotiate reductions, and pay any Medicare final demand within its deadline.

Talk to a Personal Injury Attorney

If you’re facing a settlement that may not cover all of your accident-related medical bills or liens, our firm has experienced attorneys who can help you understand lien priorities, negotiate reductions, and manage Medicare/Medicaid timelines. Reach out 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.