Your settlement v. Your Bills
For many, many reasons, sometimes the settlement amount from your auto accident doesn’t really match up very well with your treatment costs. We can talk about why in another post. But the worry is that after you pay your bills you might not have anything left over for your pain, suffering, and inconvenience. Is there any remedy?
Yes, in fact, there is. This is one instance where the NC Republicans haven’t totally changed the law to the detriment of ordinary citizens. Yay!
NC General Statutes 44-50 and 44-51 offer you some assistance in this regard. I’ve cut/pasted it below for your edification, but in a nutshell, what it says is AFTER attorney fees, if the total medical bills protected by liens is greater than HALF of what’s left over, then you can take that total (after fees) and split it in half. Half goes to the victim. The other half is split pro rata between the lien-holders. What does that mean?
“Pro-rata” is a fancy way to say “percentage share.” Let’s look at an example:
10,000 Settlement. $3000 fee. $7000 left over. Let’s say the hospital is owed $3000, and the chiropractor is owed $2500 (both with perfected liens). If you take that $7000 and divide it in half, then you have $3500/$3500. That’s less than the total of the liens, which is $5500. So take $3500 and divide it by $5500. You get .6363636 (cool number, huh?). That means you then multiply each bill by that percentage number, so in effect each gets about 63.6% of their bill paid. So the hospital gets $1909.09 and the chiro gets $1590.91, which totals to $3500. Providers get their share of $3500, and you get $3500.
That helps to make sure you, the victim, get something out of the settlement. Sadly, it does NOT absolve you of the remaining balance of the bills. Technically, you still owe the balance. This law just allows you to not pay those balances from the settlement, even if there’s a lien. However, in a lot of instances, you or your attorney can get the provider to agree to accept that pro rata payment as full and final, in which case you’re clear!
This might beg the questions, “What is a lien?” followed by “What if some providers have perfected liens and some don’t?” Those are for other posts, but I’ll end with the fact that you cannot pay non-lien holders to the detriment of lien holders, so you ignore non-lien holders in this kind of distribution. That means you still have those bills hanging over you, which is, of course, different problem.
This stuff is complicated! Don’t try to do it on your own. Get an attorney for professional help with this stuff. Call me at 919-929-2992.
| § 44-50 |
| Statutes and Session Law |
| Chapter 44. Liens. |
| Article 9. Liens upon Recoveries for Personal Injuries to Secure Sums Due for Medical Attention, etc. |
| 44-50 Receiving person charged with duty of retaining funds for purpose stated; evidence; attorney’s fees; charges. |
44-50. Receiving person charged with duty of retaining funds for purpose stated; evidence; attorney’s fees; charges.
A lien as provided under G.S. 44-49 shall also attach upon all funds paid to any person in compensation for or settlement of the injuries, whether in litigation or otherwise. If an attorney represents the injured person, the lien is perfected as provided under G.S. 44-49. Before their disbursement, any person that receives those funds shall retain out of any recovery or any compensation so received a sufficient amount to pay the just and bona fide claims for any drugs, medical supplies, ambulance services, services rendered by any physician, dentist, nurse, or hospital, or hospital attention or services, after having received notice of those claims. Evidence as to the amount of the charges shall be competent in the trial of the action. Nothing in this section or in G.S. 44-49 shall be construed so as to interfere with any amount due for attorney’s services. The lien provided for shall in no case, exclusive of attorneys’ fees, exceed fifty percent (50%) of the amount of damages recovered. Except as provided in G.S. 44-51, a client’s instructions for the disbursement of settlement or judgment proceeds are not binding on the disbursing attorney to the extent that the instructions conflict with the requirements of this Article. (1935, c. 121, s. 2; 1959, c. 800, s. 2; 1969, c. 450, s. 2; 1995 (Reg. Sess., 1996), c. 674, s. 3; 2001-377, s. 2.)
| § 44-50.1 |
| Statutes and Session Law |
| Chapter 44. Liens. |
| Article 9. Liens upon Recoveries for Personal Injuries to Secure Sums Due for Medical Attention, etc. |
| 44-50.1 Accounting of disbursements; attorney’s fees to enforce lien rights. |
44-50.1. Accounting of disbursements; attorney’s fees to enforce lien rights.
(a) Notwithstanding any confidentiality agreement entered into between the injured person and the payor of proceeds as settlement of compensation for injuries, upon the lienholder’s written request and the lienholder’s written agreement to be bound by any confidentiality agreements regarding the contents of the accounting, any person distributing funds to a lienholder under this Article in an amount less than the amount claimed by that lienholder shall provide to that lienholder a certification with sufficient information to demonstrate that the distribution was pro rata and consistent with this Article. If the person distributing settlement or judgment proceeds is an attorney, the accounting required by this section is not a breach of the attorney-client privilege.
(b) The certification under subsection (a) of this section shall include a statement of all of the following:
(1) The total amount of the settlement.
(2) The total distribution to lienholders, the amount of each lien claimed, and the percentage of each lien paid.
(3) The total attorney’s fees.
(c) Nothing in this Article shall be construed to require any person to act contrary to the requirements of the Health Insurance Portability and Accountability Act of 1996, P.L. 104-91, and regulations adopted pursuant to that Act. (2003-309, s. 1.)