What is a Letter of Protection?

A Letter of Protection (LOP) is a letter sent to a medical professional by a personal injury lawyer representing a person injured in an auto accident, work injury, or fall. An LOP guarantees payment for medical treatment from a future lawsuit settlement or verdict award. In many cases hospitals or doctors will not accept the injured party’s medical insurance as guarantee of payment for medical services rendered because private health insurance claims often deny responsibility, looking to the driver’s auto insurance for money.

When someone is hurt at work, the injured person’s health insurance might point the finger at the employer’s worker’s compensation insurance. Financial liability for a fall injury might be redirected to the building or property owner’s insurance for example.

A letter of protection written by the patient’s attorney allows the injured party in this predicament to obtain medical care they otherwise cannot afford on credit or cash, in exchange for a promise to pay for the services directly out of a settlement or judgment.  They are utilized in all types of personal injury claims including car accidents, slip-and-falls, on-the job-injuries or any other injury caused by negligence. This article is to help people understand them and why they are used.

Often, when you go to the doctor you will see a notice that says something like: “payment is expected at the time services are rendered.”   But what many people do not realize is that many health insurance plans refuse to pay for medical care incurred as a result of injuries that come from an automobile collision.  They expect you to look to the auto insurance carrier for the responsible party to pay the bills.

Automobile liability insurance carriers, however, will not pay for your medical care as you go.  They expect you to pay for the care, then submit all of the bills at once and they then may make you an offer to settle the case (or they may low ball you or simply tell you to go jump in a lake).  If the medical care lasts for months or longer, the auto liability insurers typically still expect the injured person to front those costs.  Many doctors have come to expect this from insurance companies.  As a result, many doctors refuse to treat people via their regular health insurance if the injury is the result of an automobile collision.

What do you do if you are injured, cannot work, do not have the funds for the care and your doctor will not accept the health insurance?

Similarly, what does a person do if they do not have health insurance at all?

This is where a Letter of Protection comes in.  A Letter of Protection is a letter sent by the attorney of an injured party to a medical provider agreeing to pay the medical expenses owed by the patient out of any future recovery whether by settlement or by trial and judgment.  It is a contractual agreement that allows the injured person to get the care they need effectively on credit with the creditor (the medical provider) agreeing to wait until the conclusion of the case to demand payment.  If the attorney settles the case or obtains a judgment in the case, the attorney then has an obligation to make sure the medical provider’s bill gets settled out of those funds.  If there is no recovery (i.e. the injured person goes to trial and loses the case), then the injured person is still responsible for the bill and the medical provider retains the right to pursue them for the full bill just like any other debt.

In addition to the above, Letters of Protection are sometimes used to delay collection on a previously incurred medical bill.  For example: Assume you are in a wreck.  You go to a medical facility for care.  They submit the bill to your health insurance carrier who later refuses to pay the claim because it is for care rendered as the result of an automobile collision.  You cannot afford the expensive bill.  Your personal injury lawyer may be able to provide the medical facility with a Letter of Protection in exchange for the medical provider not filing the bill against your credit or otherwise pursuing collection efforts.  In the same manner as above, the Letter of Protection allows the injured person to wait until the case is resolved in exchange for an agreement to pay the bill out of any proceeds from the claim.  If there are no proceeds at the conclusion of the claim, the medical provider then still has the right to pursue collection efforts against the injured person.

Insurance company lawyers often try to use Letters of Protection against the injured party by insinuating that the doctor is biased because his bill is still outstanding.  Sadly, Letters of Protection would not even be necessary if the insurance companies paid the bills for the injured person from the git go.   They put many people in a position where they have no choice but to seek help under a Letter of Protection and then they try to use the Letter of Protection to avoid responsibility for paying the bills at trial.

Now you know.