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What is an LOP in Legal Terms?

A letter of protection secures payment to medical providers

A letter of protection (often abbreviated as LOP) is a document issued by a lawyer in favor of a doctor, hospital, or other medical providers that are designed to protect the medical provider’s right to receive its fees for the medical services it performs to treat the plaintiff in a personal injury case. The letter of protection promises that the medical provider will be paid out of any funds that the plaintiff receives when the case is settled or the plaintiff obtains a 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. 

Medical providers will not accept letters of protection from injured parties without attorneys. They will accept them only 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 and to refrain from reporting the account is 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. 

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.   

Even if it appears that a defendant is clearly at fault and that the defendant has insurance that would cover the plaintiff’s medical treatment, those insurance companies are notoriously reticent to cover medical costs at the time the services are needed. Instead, they 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. 

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.

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