Clients sometimes express frustration with the amount of settlement proceeds they ultimately receive after their doctors have been paid. What was once a large settlement can be quickly reduced by payments to all of the doctors, nurses, and hospitals involved in treating the client’s injury after an accident.
A North Carolina law helps address that situation by limiting the amount of settlement proceeds disbursed to medical providers to 50% of the settlement amount after attorneys’ fees are deducted. That law is N.C.G.S. § 44-50, which states that valid, perfected liens attach to settlement funds, but such liens shall not “exceed fifty percent (50%) of the amount of damages recovered.” A lien, by the way, is a claim for the payment of a debt.
Here’s an example to help this sink in. You are injured in a car accident by another driver and incur $15,000 in medical bills. Your attorney settles with the other driver’s insurance company for $30,000. The attorney’s fee is one-third of the settlement amount ($10,000), leaving $20,000. Pursuant to the law, medical expenses cannot exceed one-half of the remaining $20,000. Although your medical expenses in this hypothetical situation are $15,000, only $10,000 must be paid to your doctors from settlement proceeds, and you keep the remaining $10,000.
So, is your large settlement check automatically going to be cut in half if you have significant medical expenses due to the accident? Not necessarily. The law requires the doctor or hospital to “perfect” the lien, which requires the doctor or hospital to do three things:
- Provide medical records upon request without charging for them;
- Provide medical bills upon request without charging for them; and,
- Provide written notice claiming a lien.
If your attorney requests your medical records or bills and your doctor charges for providing them, then the lien on your settlement proceeds is not valid. Also, doctors who fail to provide written notice claiming a lien – after being notified of attorney representation – fail to perfect their lien.
Furthermore, your attorney may be able to negotiate with your doctors to pay them a lesser amount for your medical bills before you accept a settlement offer. In situations where clients have Medicare, Medicaid, an ERISA health plan, or a State Employees Health Plan, the math for disbursements to medical providers often becomes more complicated and requires an attorney’s guidance.
If you need legal guidance to ensure you obtain the highest possible settlement for your personal injury or medical malpractice claim in Boone, North Carolina, or the surrounding area, I would be happy to talk with you. Please contact Matt Rupp at (828) 265-0016 or firstname.lastname@example.org.