Short Answer

In North Carolina, you should give each lienholder a full settlement breakdown: total settlement, your attorney’s fee percentage and itemized costs, current balances for each medical bill, and proof of any payments, write‑offs, or reductions already agreed. State law caps and priorities apply to what lienholders can take from a personal injury recovery, and Medicaid has a statutory lien that must be adjusted for fees/costs and limited to the portion of the recovery attributable to medical expenses.

Understanding the Problem

You settled a North Carolina personal injury claim and want to negotiate down medical liens before funds are disbursed. The question is: what settlement details do you need to share to move those negotiations forward and get lawful approvals from Medicaid and providers? You already asked NC Medicaid to reduce its subrogation claim after treatment for neck and back pain and have a chiropractic reduction lined up.

Apply the Law

North Carolina law gives certain medical providers a lien on personal injury recoveries and sets strict rules for how settlement money is distributed. Provider liens must be honored within statutory limits, attorney’s fees have priority up to one‑third, and the total payout to provider liens is capped. Separately, NC Medicaid has a statutory right to recover what it paid for accident‑related care, reduced by its share of attorney’s fees and costs and further limited to the portion of the settlement that represents medical expenses. Disputes about Medicaid allocation can be taken to Superior Court if needed.

Key Requirements

• Identify and notify lienholders: List every provider and plan with a claim (providers under North Carolina lien law, Medicaid, Medicare, State Health Plan, and any other subrogating insurer).
• Provide the settlement accounting: Share the gross settlement, the attorney’s fee percentage and dollar amount, and an itemized list of case costs (copy of the signed fee agreement and closing worksheet helps).
• Document each medical claim: Send itemized bills, dates of service, diagnosis codes when available, current balances, explanations of benefits, insurance payments, and write‑offs to show the enforceable amount.
• Show other liens and reductions: Include any agreements (e.g., the chiropractic reduction letter) and all known hospital, physician, and insurer liens so proration can be calculated within statutory caps.
• Observe statutory caps and priority: Attorney’s fees (up to one‑third) come off the top; total payments to perfected provider liens are capped; Medicaid must apply a pro‑rata reduction for fees/costs and is limited to the medical‑expense portion of the recovery.

What the Statutes Say

• North Carolina Gen. Stat. § 44-49 (Medical provider lien) - Creates liens for hospitals/clinicians on personal injury recoveries and sets prerequisites.
• North Carolina Gen. Stat. § 44-50 (Enforcement and distribution limits) - Protects attorney’s fees (up to one‑third) and caps total payments to perfected provider liens.
• North Carolina Gen. Stat. § 108A-57 (Medicaid third‑party recovery) - Gives NC Medicaid a lien on settlements, reduced for fees/costs and limited to the medical‑expense portion.
• North Carolina Gen. Stat. § 135-48.37 (State Health Plan subrogation) - Authorizes recovery of paid benefits from liable third‑party settlements.

Analysis

Apply the Rule to the Facts: You already shared the gross settlement, attorney fee percentage, costs, and listed existing liens—those are the core items every lienholder needs to calculate lawful reductions and distributions. Add itemized bills, EOBs, and current balances to help Medicaid and the provider confirm accident‑related charges and apply write‑offs. Include the chiropractic reduction letter so the remaining lien pool can be prorated under the statutory cap. Then wait for NC Medicaid’s final demand reflecting its pro‑rata reduction for fees/costs and any allocation limits.

Process & Timing

1. Who files: The injured person (through counsel). Where: For Medicaid, to NC DHHS’s third‑party recovery unit; for providers, to each billing office or lien department. What: A settlement packet with gross settlement, fee/costs breakdown, itemized medicals/EOBs, and proof of other liens/reductions. When: Send promptly after settlement and before any disbursement.
2. DHHS and providers review and issue a written demand or acceptance of your proposed reduction. Expect follow‑up requests for missing bills, insurance adjustments, or causation clarifications.
3. Upon receiving all final demands, disburse in statutory order (fees first, then liens within caps), obtain written satisfactions/releases, and keep the closing statement and lien releases in your file.

Exceptions & Pitfalls

• Medicare, Medicaid, State Health Plan, and private ERISA plans follow different recovery rules. Confirm who paid and follow the right process for each.
• Unperfected provider claims may not be enforceable as liens; ask for proof of perfection and itemized charges. Challenge unrelated or unreasonable charges.
• Do not disburse client funds before resolving known liens. Disbursing with notice of a perfected lien can create liability for you and your attorney.
• Ensure Medicaid’s demand reflects a pro‑rata reduction for attorney’s fees and costs and is limited to the portion of the settlement attributable to medical expenses.

Talk to a Personal Injury Attorney

If you're dealing with medical liens after a North Carolina personal 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.