What is an LOP in Legal Terms?

A letter of protection (LOP) is a letter sent by a personal injury lawyer to your medical provider that guarantees them payment for medical services. After an accident, your insurance company may refuse to pay for your medical care, at least at first. Many medical care providers refuse to accept private insurance for this reason, which can effectively deny you medical care.

A letter of protection sidesteps this problem of payment by guaranteeing a medical provider will receive their money from your settlement. However, a letter of protection can add another layer of complexity to your case and increase your need for legal funding. Find out how a letter of protection can help you and what you’ll need to be aware of before asking for one.

What Is a Letter of Protection?

A letter of protection (often abbreviated as LOP) is a document issued by a lawyer in favor of a doctor, hospital, or other medical provider. It protects the medical provider’s right to payment for the medical services it performs to treat the plaintiff in a personal injury case. The medical provider will be paid out of any funds that the plaintiff receives in a settlement or judgment. 

The personal injury is often an automobile accident, but it can be a case of premises liability (slip and fall), medical malpractice, or the result of some other incident or circumstance that causes the plaintiff an injury that requires medical treatment. 

A Letter of Protection Secures Payment to Medical Providers

Medical providers will only accept a letter of protection from the plaintiff’s retained attorney. Any settlement money will generally be sent by the defendant to the attorney, who deposits the money into a trust account from which the firm is ethically bound to make payment to cover the medical expenses incurred pursuant to any letters of protection. 

Because the attorney has a fiduciary duty to pay the medical provider, the attorney can be sued or face disciplinary action when the bill remains unpaid. In return for the promise of prompt payment from settlement proceeds, the provider promises not to attempt to collect from the plaintiff. They also refrain from reporting the account as delinquent credit reporting agencies. 

Who Can Get a Letter of Protection?

A letter of protection can be issued to a medical doctor, hospital, clinic, physical therapist, chiropractor, imaging center, or virtually any medical provider. Even so, medical providers are not required to accept a letter of protection. Some plaintiffs may find themselves shut out from seeking treatment by their preferred medical professionals or facilities. 

Fortunately, letters of protection offer enough assurances that many providers will agree to wait for payment for the necessary treatment of a plaintiff’s injuries.

Letters of Protection Are Limited

A letter of protection is issued only to medical providers treating the plaintiff in a case. It is not issued to secure the payment of injuries suffered by the person who is at fault in the accident. 

Letters of protection are also issued only for treatment associated with the injuries caused by the accident that forms the basis of the personal injury case. A plaintiff cannot expect to receive treatment for a lung condition that is not caused or exacerbated by the car crash. But a letter of protection can be issued to a doctor who treats the plaintiff’s broken leg.

What About Insurance?

Letters of protection came about as a tool to plug a hole in a plaintiff’s insurance coverage. Often, an injured plaintiff had no insurance to pay medical expenses and could not cover the bills out of pocket. Medical providers would refuse to treat the injured party fearing that they might never be paid.

Even if it appears that an insured defendant is clearly at fault, insurance companies are notoriously reticent to cover medical costs at the time the services are needed. Instead, insurance companies hold off paying medical bills until the parties settle the case or they expect the medical expenses to be paid by the plaintiff out of the settlement money.

Letter of Protection for Car Accidents

When a plaintiff has personal injury protection (PIP) as a part of their car insurance coverage, it may cover some expenses regardless of who’s at fault in an accident, but PIP is often capped at a maximum payout that is far less than the cost of treatment. In some states, the amount of PIP coverage offered by insurance companies is as low as $2,500. 

It would cost more than that to just walk through the door of a hospital emergency room. Accident victims sometimes discover too late that their health insurance company will not cover their injuries in car crashes. In those cases, a letter of protection may be the only way an attorney can help a client get vital medical care.

Letter of Protection for Workplace Injuries

After a workplace injury, plaintiffs may face trouble paying for medical care as their insurance provider and owkrer’s compensation dispute who is responsible for payment. A letter of protection allows them to seek whatever medical care they need without paying out-of-pocket costs they can’t afford and which might prevent them from obtaining treatment.

A Letter of Protection Is a Contract, Not a Guarantee

The letter of protection, in some jurisdictions known as a medical lien, only extends so far. It is not insurance, and the doctor or hospital has no guarantee of payment. What they have is fundamentally a contract with the plaintiff to be paid out any financial recovery the plaintiff receives. 

If the plaintiff loses the personal injury case or abandons the case before it is settled, the plaintiff remains liable for payment of the costs of the treatment. Even if the plaintiff wins the case, if the cost of medical treatment exceeds the settlement or judgment proceeds, the injured party can be held responsible for the unpaid medical bills.

Can a Letter of Protection Be Used Against Me?

Due to their unusual nature, insurance companies will try to use a letter of protection against you. They will try to claim that a medical provider is biased to you and may be inflating your costs of treatment and severity of injuries. Insurance companies do this even though they’re the ones responsible for plaintiffs seeking medical care under a letter of protection.

Partly for this reason, many doctors are wary of offering medical care under a letter of protection. The defense will want to examine their motives for offering treatment and will attempt to establish they are biased and are only offering medical care for profit. While a qualified lawyer can combat these attacks, they can drag out the length of your case and increase its costs.

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