Oct82025
Wrongful Death

How do liens from Medicare, Medicaid, and EMS get paid out of a wrongful death settlement? – North Carolina

Short Answer

In North Carolina, wrongful death proceeds are not estate assets, but they must first cover litigation costs and approved attorney’s fees, then certain medical and burial expenses before any distribution to heirs. Medicare must be reimbursed in full from the settlement; Medicaid has a statutory lien that is limited to the medical-expense portion of the recovery under state law. County EMS and other medical provider liens attach if properly perfected, but together they cannot exceed one-half of the recovery after attorney’s fees and are also constrained by a statutory dollar limit for medical/hospital bills. The balance is then distributed to heirs under the intestacy rules.

Understanding the Problem

In North Carolina wrongful death cases, can the personal representative settle and distribute funds when Medicare, Medicaid, and county EMS have liens? Here, two adult siblings are the heirs to the recovery. The insurer will not release funds until the signed release is returned, lien issues are resolved, and the distribution plan is clear.

Apply the Law

North Carolina law treats wrongful death proceeds differently from ordinary estate assets. The personal representative prosecutes and settles the claim. From the gross recovery, the law prioritizes reimbursement of the estate’s litigation expenses and approved attorney’s fees, then allows payment of reasonable burial expenses and certain medical and hospital expenses arising from the last injury, subject to statutory caps. Medicare reimbursement is required in full and is not limited by the North Carolina caps. Medicaid’s recovery is governed by state statute that limits recovery to the portion of the settlement allocated to medical expenses, and providers such as county EMS assert medical liens that are capped relative to the net recovery after attorney’s fees. Settlement approval by a judge is required unless all competent adult heirs consent in writing. The Clerk of Superior Court oversees medical/burial expense approvals and a separate accounting of wrongful death proceeds.

Key Requirements

  • Proper party: The personal representative brings, settles, and distributes a wrongful death claim; proceeds are separate from general estate assets.
  • Order of payment: Litigation costs and approved attorney’s fees first; then burial and qualifying medical/hospital expenses from the last injury within statutory caps; remaining net to heirs.
  • Medicare: Must be repaid in full from the recovery; state caps do not limit Medicare’s reimbursement.
  • Medicaid: State lien applies only to the medical-expense portion of the settlement and is subject to statutory presumptions/caps and negotiation.
  • Medical/EMS provider liens: Valid only if perfected; subject to a combined cap of 50% of the recovery after attorney’s fees and the separate wrongful death medical-expense dollar limit.
  • Court oversight: Judge approval of settlement if any beneficiary is a minor/incompetent or if competent adult heirs have not all consented; Clerk approval of medical and burial payments and separate accounting.

What the Statutes Say

Analysis

Apply the Rule to the Facts: With two adult siblings as heirs, the personal representative will deduct litigation costs and the agreed contingency fee from the gross settlement. Next, Medicare must be repaid in full for injury-related payments. Then resolve the Medicaid lien within state-law limits tied to the medical-expense portion of the settlement. County EMS and any other providers are paid only if their liens are perfected and within the 50% post-fee cap and the wrongful death medical-expense dollar limit. The remaining net is distributed to the siblings under intestacy.

Process & Timing

  1. Who files: Personal representative. Where: Settlement approval (if required) before a Superior Court judge; medical/burial approvals and accounting with the Clerk of Superior Court. What: Petition/motion for settlement approval if not all competent adult heirs consent; submit lien documentation; file separate wrongful death proceeds accounting (use standard estate account forms posted on nccourts.gov). When: Obtain Medicare final demand and Medicaid lien statement before distribution; seek court approval before signing or funding a settlement when required.
  2. Resolve liens: Report the claim to Medicare early, request a conditional payment letter, then obtain the final demand; request Medicaid’s ledger from NC DHHS and address allocation and caps; collect perfected EMS/medical provider lien statements. This often takes several weeks; timing varies by agency and county.
  3. Finalize and distribute: After paying approved fees and liens within the statutory limits, file the wrongful death accounting with the Clerk and distribute the balance to the heirs. Secure written receipts/releases from payees and heirs. Do not commingle wrongful death proceeds with general estate funds.

Exceptions & Pitfalls

  • If any heir is a minor or incompetent, a judge must approve the settlement; expect added time and documentation.
  • Paying medical/EMS liens above the 50% post-fee cap or the wrongful death medical-expense dollar limit can overpay providers; prorate within statutory limits.
  • Medicare must be repaid in full; do not apply state caps to Medicare. Failure to obtain a final demand can delay funding and risk penalties.
  • Medicaid recovery is limited to the medical-expense portion. Statutory presumptions and caps apply and can be rebutted; confirm current procedures with NC DHHS.
  • Beneficiaries on needs-based benefits may lose eligibility if they take cash outright; consider special-needs planning before distribution.

Conclusion

North Carolina channels wrongful death settlements first to litigation costs and approved attorney’s fees, then to burial and qualifying medical/hospital expenses within statutory limits. Medicare is reimbursed in full; Medicaid’s lien is limited to the medical-expense portion under state law; perfected EMS and other provider liens share within the 50% post-fee cap. After liens are resolved, the balance goes to heirs. Next step: have the personal representative obtain written Medicare and Medicaid lien amounts and, if needed, seek court approval before signing and funding the settlement.

Talk to a Wrongful Death Attorney

If you’re dealing with lien payoffs and distribution of a North Carolina wrongful death 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.

Category: Wrongful Death

Author: jpierce

Attorney Jared Pierce is the founder of Pierce Law Group in Raleigh, North Carolina, a firm he established with a dedicated focus on probate administration and estate planning across North Carolina. Born and raised in the Republic of South Africa, Jared moved to Durham with his family in 2001, bringing with him a rich cultural background and a distinctive accent that often serves as a conversation starter.