Short Answer

Yes. In North Carolina, Medicaid generally must be repaid from a personal injury settlement for the injury-related care it paid. By statute, Medicaid’s claim is capped at the lesser of (1) the total Medicaid payments for injury-related treatment or (2) one-third of the total settlement. You must address and pay this claim from settlement funds at disbursement, though you can ask a court to allocate a smaller medical share if the cap overstates medical damages.

Understanding the Problem

You want to know if North Carolina Medicaid must be repaid from your personal injury settlement and what the repayment process looks like. Here, you have Medicaid and were rear-ended, went to urgent care, and are still limping. The key question is: if you receive a settlement, must you pay Medicaid back, who handles it, and when does it have to happen?

Apply the Law

North Carolina law gives the Department of Health and Human Services (DHHS) a statutory right to recover what Medicaid paid for injury-related treatment when you obtain money from the at-fault party. This right operates as a lien against your settlement. The amount is limited to the lesser of the Medicaid-paid amount or one-third of your total recovery. Only injury-related charges are recoverable, and you or your attorney must notify DHHS, hold funds in trust, and satisfy the claim before disbursing client funds. If the default cap would overpay Medicaid compared to the portion of the settlement that fairly represents medical expenses, you can ask a court to determine a lower amount.

Key Requirements

• Medicaid paid for injury care: The repayment duty applies only to services Medicaid paid that were caused by the accident.
• Amount is capped: Repayment is the lesser of (a) the total injury-related Medicaid payments or (b) one-third of the total settlement.
• Notice and holdback: Notify DHHS about the claim and settlement; hold enough funds in trust to pay the final Medicaid amount before you disburse.
• Court allocation available: If the default cap overstates the medical portion, you may ask a North Carolina court to allocate a smaller medical share.
• Enforcement risk: If Medicaid is not paid from settlement funds, DHHS can pursue recovery from the beneficiary and, in some cases, the disbursing attorney.

What the Statutes Say

• North Carolina Gen. Stat. § 108A-57 (Medicaid lien and cap) - Creates DHHS’s recovery right and caps it at the lesser of Medicaid-paid amounts or one-third of the settlement; allows court allocation.
• North Carolina Gen. Stat. § 108A-59 (Enforcement) - Authorizes DHHS to enforce its claim if not repaid from the recovery.

Analysis

Apply the Rule to the Facts: Because you have Medicaid and sought urgent care after being rear-ended, DHHS will likely assert a lien for any accident-related payments. That lien must be paid from any settlement, but only up to the lesser of the Medicaid-paid amount or one-third of your total recovery. Your attorney should get an itemized Medicaid ledger, remove unrelated charges, and, if needed, ask the court to allocate a smaller medical share before funds are disbursed.

Process & Timing

1. Who files: The injured person (through counsel). Where: Notify the North Carolina DHHS, Division of Health Benefits, Third Party Recovery Section. What: Provide claim details and request an updated Medicaid lien/paid-claims statement. When: Early in the claim and again before settlement.
2. After you reach a settlement, your attorney holds funds in trust, confirms the final Medicaid amount, and negotiates removal of any unrelated charges. This typically takes a few weeks, but timing can vary.
3. If the default cap would overpay Medicaid, your attorney files a motion in North Carolina Superior Court for allocation of the medical portion. Once resolved, pay DHHS and obtain written confirmation of satisfaction, then disburse the remaining funds.

Exceptions & Pitfalls

• Unrelated treatment cannot be charged to your settlement; scrutinize the Medicaid ledger for non-accident care.
• The one-third figure is a cap, not an automatic payment; ask for a court allocation if the medical share is lower.
• Failure to notify DHHS or to hold back funds can trigger repayment demands and delay disbursement.
• If multiple payers are involved, each may have separate rights; resolve Medicaid’s claim according to North Carolina law before final distribution.

Talk to a Personal Injury Attorney

If you’re resolving a settlement and need to address a North Carolina Medicaid claim, our firm has experienced attorneys who can help you understand your options and timelines. Reach out today. Call (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.