Provider Liens vs. Health Plan Claims in North Carolina

By the FigureMyTax Editorial Team · How we calculate

Any provider you owe for the injury, including hospitals, physicians, dentists, nurses and ambulance services, has a lien on your recovery, but it is not valid unless the provider furnishes your attorney, free and within 60 days of the request, an itemized statement and records and written notice of the lien. All liens together cannot exceed 50 percent of the damages recovered, not counting attorney fees.

The lien

G.S. 44-49(a) creates a lien on sums recovered as damages for personal injury in favor of any person, corporation, State entity, municipality or county to whom you owe money for drugs, medical supplies, ambulance services, or the services of a physician, dentist, nurse or hospital in connection with the injury. It attaches to a minor's recovery as fully as to an adult's.

The condition

Under subsection (b), no lien is valid unless the provider, on request of your attorney, furnishes within 60 days, without charge, an itemized statement, hospital record or medical report for use in negotiating, settling or trying the claim, and written notice of the lien.

The cap and priority

Section 44-50 says the lien attaches to funds paid in settlement, nothing in it interferes with any amount due for attorney's services, and the lien can in no case, exclusive of attorneys' fees, exceed 50 percent of the amount of damages recovered. Whoever disburses the funds must retain enough to pay valid claims after notice.

Pro rata payment

A lienholder paid less than its claim may request, in writing, a certification showing the total settlement, the total distribution to lienholders, each lien claimed and the percentage paid, and the total attorney's fees (G.S. 44-50.1).

How an insurer's claim differs

A health plan's claim is not a provider lien; see our post on health plan reimbursement. Medicaid and Medicare follow their own rules; see the Medicare and Medicaid post. Enter each claim in the North Carolina medical lien calculator.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how North Carolina's rules apply to your specific case with a licensed North Carolina attorney.