What is a “Letter of Protection” and How does it Work in my Personal Injury Case?

Many times, victims of a personal injury do not have health insurance or money to pay the medical expenses for their injuries.  Other times, the injured party does not want to use their health insurance.  These are just some of the issues you may face after being injured in an accident.

So, you contact a personal injury attorney to help you make this decision and get you the medical care you need.

Under these circumstances, your attorney may choose to issue a “letter of protection,” also known as an “LOP.”

What is an LOP?

An LOP is issued by your attorney to a doctor.  It basically provides that the treating doctor will get paid out of any recovery from the client’s case.  It also provides that the doctor agrees not to seek collection of the medical bill until the case is concluded.  Once the case is concluded, then the doctor will get paid from the proceeds of the settlement.

But what if there is no settlement?  Technically speaking, the client still owes the doctor.  But because the vast majority of cases settle out of court, this is not necessarily a major initial concern.

Your lawyer might also insist on certain conditions before issuing an LOP to a doctor.  For instance, the lawyer may insist that the doctor provide all final treatment and billing records free of any copying charges.  Additionally, the doctor will agree not bill any other insurance while the LOP is in effect.  Sometimes, an LOP might even provide that the doctor will agree to give testimony in a deposition or at trial free of any expert witness fees.

Why don’t I just use my health insurance instead of using an LOP?

Using your health insurance may be an option.  But it also may not be the best option depending on your case.  Whether or not to use your health insurance in your personal injury case is something that should be discussed with your attorney.  For instance, using your health insurance may be best if your injuries are very serious.  That is because most of the case’s value will probably come from the “pain and suffering” rather than the amount of the medical expenses.

However, using your health insurance may hurt the value of your case.  When your doctor bills your health insurance, the insurance company pays much less than what the doctor actually charges.  Therefore, that “savings” is passed on the to the person who was responsible for causing your injury in the first place.  That is because Texas law only allows you to recover the medical expenses that have been actually paid or incurred as a result the accident.  The amount that is adjusted off the bill is not recoverable.

In the meantime, you would be responsible for paying your deductible and co-pays.  That is the irony of the Texas “paid or incurred” statute.  You have to pay some or all of your medical expenses up front while the responsible party sits back and pays nothing.

The LOP puts the responsibility for your injury where it belongs.

It just seems fundamentally unfair that you have to pay any part of your medical expenses only to recover less from the responsible party.  This is especially true since you pay the premiums for your health insurance.  The use of the LOP helps resolve this problem in favor of the injured person.

When you use an LOP rather than your health insurance, your doctor is able to bill the full charges for the medical treatment.  You, therefore, have the right to pursue the full charges against the responsible party.

Once your attorney is able to settle your case, then the doctors will usually negotiate their full charges.  In fact, the doctors will normally still get paid more than your health insurance would have paid and you get the benefit of those negotiations in your bottom-line.  Therefore, those savings are passed onto you rather than the persona who is responsible for causing your injuries.

Practical Problems of an LOP

There are, however, some other practical problems with LOPs.  First, if your case goes to trial, the issue of the LOP may come out.  If it does, then the jury may think that the doctor and lawyer are working together to bolster the client’s case.  Likewise, the jury might think that the medical treatment was incurred for the sole purpose of building up an injury case.

Second, insurance adjusters usually look negatively on LOP doctors.  The adjusters tend to believe that LOP doctors inflate their bills in order to help the lawyer get higher settlements.  On the contrary, what usually ends up happening is that the insurance adjusters will make even lower settlement offers knowing that the doctor has already figured in a reduction of their outstanding bill.

Third, if there is a settlement, your lawyer better be confident that the doctor will negotiate the balance in order to help conclude a settlement.  If you reach a settlement and the doctor plays hardball, then you might have a stalemate in getting the settlement finalized.

Get the Advice of an Experienced Personal Injury Attorney.

Whether or not your lawyer should issue an LOP in your case depends on various circumstances.  Once you meet and consult with your lawyer, a decision can be made at that time whether or not an LOP is the best option for you.

An experienced personal injury trial attorney will know how to  best handle your medical bills.  Robert C. Slim has been representing victims of serious personal injuries in the Dallas, Fort Worth and surrounding areas since 1994.  We know how to manage your medical treatment under an LOP in order to get the best results for your case.

For more information regarding wrongful death and personal injury cases in the Dallas & Fort Worth area, get a free consultation with Attorney Robert C. Slim, or call him at (214) 321-8225.

Related Articles:

Using Health Insurance in Your Personal Injury Case

Medical Bills in a Personal Injury Case: “Paid or Incurred”

What is the Settlement Value of my Injury Case?