A letter of protection (LOP) is a letter sent to a medical professional by a personal injury lawyer representing a person injured in a car 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 a guarantee of payment for medical services rendered because private health insurance claims often deny responsibility, looking to the driver’s auto insurance for money.
Letter of Protection for a Work Injury
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 the 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.
Letter of Protection and Automobile Injuries
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.
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.
Letters of Protection to Delay Collections and/or Damage to Your Credit
In addition to the above, a letter of protection is 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 way 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.
Can A Letter of Protection be Used Against Me?
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.
Below is an example of what a letter of protection from an attorney to a medical provider may look like:
RE: Our Client: Joe Client
Amount of Bill: $1000
Subject: LETTER OF PROTECTION
Please be advised that Joe Client was injured as a result of the negligence of XXX whose insurance company has failed to take financial responsibility for his actions. Our Firm has been employed in connection with the personal injuries and damages sustained by Joe Client as a result of the above-referenced accident. Due to the financial hardship caused by the negligence of XXX, we would appreciate your accepting this letter as our agreement that we will protect your interest for services rendered on behalf of Joe Client out of any settlement or Judgment recovered from XXX and/or his insurance company in this case.
Of course, should there be no recovery made in this case, Joe Client will remain fully responsible for the entire balance of your bill.
Please direct any future bills or letters of collection regarding our client’s bill to the undersigned during the pending of this claim. If you have any questions, please do not hesitate to contact me.