Letter of Protection: Definition and Personal Injury Cases

Category: Personal Injury

Article by Heath A. Tuley

If you are injured in an accident due to someone else’s negligence, the last thing you are likely thinking about is how to properly handle insurance companies. Once the adrenaline from the accident wears off, you are going to feel any injuries you might have received, meaning medical care will probably be at the forefront of your thoughts. Seeking a personal injury lawyer’s services promptly can help you navigate the complexities of your case and ensure that your financial and medical needs are addressed.

Financial issues should not prevent you from getting treatment that could save your life—especially if your injury is time-sensitive. Even insured victims can experience financial issues when they face sudden and severe injuries. As the name suggests, letters of protection exist to protect people from difficult situations like these.

What Is a Letter of Protection (LOP)?

A letter of protection is a legally-binding document directed by your attorney between you and your doctor that promises the payment of any professional services provided out of any settlement. It is essentially an “I owe you” to cover expenses while a personal injury case is finalized. 

The purpose of the LOP is to guarantee the payment of medical bills through a future lawsuit. In most instances, hospitals won’t accept the defendant’s insurance coverage as a guarantee of payment. They will need more than that in order to continue treatment. This is because insurance companies usually deny responsibility and/or causation upfront in an attempt to posture in negotiations.

If you or a loved one have been involved in a personal injury accident, contact an experienced Evansville personal injury lawyer near you today.

How a Letter of Protection Works

When a health care provider or doctor receives a letter of protection, they are expected to perform the necessary medical treatment under the expectation that they will be paid in the future. This is common in personal injury cases because medical providers want to ensure that they will be paid for their services. 

When the injury claim is settled, your representative will be legally obligated to pay off the outstanding medical bills with the funds you are rewarded pursuant to your agreement in the letter of protection. If there is an issue with the case or you lose at trial and your settlement is not recovered, you will be required to pay off the bills yourself. If you do not have the out-of-pocket funds to cover your medical costs, a letter of protection helps you receive the care you deserve in the moment—but it does not pay the bill.  It simply forestalls any collection efforts.

A letter of protection must be sent by a licensed personal injury attorney to a medical practitioner. The attorney could represent a person who has been injured in an auto accident, a fall, a work-related injury, etc. Before your attorney sends the LOP on your behalf, have a discussion with them to ensure it’s the best plan of action.

Why Would I Need a Letter of Protection?

Healthcare has been a popular discussion for the last decade or so. There have been multiple attempts to reduce or eliminate the number of uninsured individuals in the U.S. The Obama administration created the Affordable Care Act, which helped decrease the number of uninsured individuals, but did not completely solve the issue. There is a long way to go before all citizens have readily available healthcare.

If someone with good coverage is injured from another person’s negligence, they will likely be able to receive treatment that is covered by their health insurance. They will not need to pay medical bills out of pocket, and they can cover insurance costs after their lawsuit pays out. If the case falls through or takes a long time, they will still be able to get the help they need. 

However, for individuals without high-quality health insurance, it can be crippling to cover the costs of treatment if the settlement is held up for some reason. This is what a letter of protection is for.

With a letter of protection, the patient will not have to pay any collections while the case is still ongoing. Additionally, an accident victim can receive the necessary medical treatment that they otherwise could not be able to pay for out of pocket.

Letter of Protection After a Work Injury

When you are injured at work, your health insurance company will refer you to your employer’s workers’ compensation policy. The financial liability will be directed to the property owners if you slip and fall or are injured in a particular building.

If there is a third party responsible for your injury and you pursue additional personal injury damages, you may need an LOP. Not all insurance companies will be willing to pay, especially when the at-fault party is not clear. If the details are clear, however, a letter of protection will make it easier for you to seek treatment that you might not have otherwise been able to afford.

Letter of Protection After a Car Accident

Auto injuries account for a large percentage of personal injury cases. It can be challenging to determine who was at fault for the accident; the accused party must have acted in a negligent manner. Gathering proof of their fault can be especially difficult if you’re unfamiliar with what to do after a car accident.

When you go to a doctor, you are supposed to pay at the time the service is being rendered. It should be noted that only a few insurance companies will pay for the injuries resulting from an auto accident. They will expect you to look to your auto or regular health insurance carrier to cover these accident-related medical expenses in the form of medical payments coverage, etc.

Auto insurance carriers typically do not want to pay for medical expenses. This process can be confusing, especially if you are hurt and don’t have the funds to pay for the treatment yourself.

An experienced personal injury attorney will know how to handle the process of submitting a letter of protection. The LOP will be sent assuring that your medical bills will be taken care of by the settlement of the claim.

Once the case has been settled, it is the responsibility of the attorney to ensure that all outstanding medical bills are paid. If no compensation is received, the injured person may still be obliged to pay for the medical bills they have incurred.

Letter of Protection Advantages

A letter of protection benefits personal injury victims in a variety of ways, especially for those without insurance. 

The primary function of the LOP is to get you the medical care you need when you need it. Even if you are not sure whether the settlement will succeed, your health and safety should always be your top priority. Receiving immediate treatment can be the difference between life and death.

Letters of protection also help prevent further financial penalties that may be incurred by past-due medical bills. The longer it takes to pay for services, the more expensive they become, but the LOP stops debt collection agencies from contacting you. 

By preventing these debts and late expenses, you also protect your credit score. In a normal situation, your credit could suffer severely in the time it takes to finish up a personal injury case. With a letter of protection, you can avoid any credit issues which might take years to remedy.

Letter of Protection Disadvantages

The main drawback of using a letter of protection comes down to the credibility of your doctor. If you are receiving treatment under a letter of protection, insurance companies may argue that your doctor has a vested interest in you winning the case so they will get paid. If a doctor provides services to you under the condition that you will have money, the insurance lawyers will try to prove that your doctor is lying to help you win your case.

LOPs can also be risky because they rarely impose a cost limitation on the medical treatment you opt for. Whether you win the settlement or not, the money for your medical bills will be taken out of your funds. If the LOP results in treatment that costs more than the total value of your settlement, you will still be required to pay that additional amount out of pocket. 

Additionally, medical providers are capable of creating their own LOP medical liens against your claim. Be smart about signing and remember that insurance companies are not operating in the interest of your financial prosperity. While they may be responsible for getting you the care you deserve, they will often fight to minimize their payments. Do not sign legal documents without talking to your attorney first.

An experienced personal injury lawyer will guide you through the LOP process and ensure that you do not get yourself into any unnecessary financial trouble. They will also fight to get any types of compensation possible for the treatment received.

Can a Letter of Protection Be Used Against You?

Insurance companies may use LOPs against accident victims. They will insinuate that the medical professional is waiting to recover what is owed.

Many who seek a letter of protection are in a bind and there is nothing more they can do under such circumstances. For this reason, insurance companies know they can use this argument and have experience doing so. If you do not have a good attorney, insurance lawyers may try to use a letter of protection to reduce or eliminate the amount their company must pay.

Letter of Protection for Doctors

One of the most difficult parts of receiving care under a letter of protection is finding a doctor who will accept it. When a doctor accepts a medical LOP, they assume the risk of that settlement not paying out adequate compensation.

On the other hand, if a case does succeed, doctors often receive payments that exceed health insurance and medicare rates. As a result, the existence of a letter of protection is almost always believed to influence a doctor’s opinion on the necessary treatment. Sometimes entire personal injury cases will be based on a doctor’s motivations.

Losing a Personal Injury Case

If you are injured in an accident and do not recover compensation, you are still responsible for paying your medical bills. Even if you had treatment under a letter of protection, the burden falls on you to pay outstanding expenses in the event of a settlement denial. Hire a trustworthy Indiana injury lawyer that will fight for you to prevent this scenario.

Contact Tuley Law Office for Your Personal Injury Letter of Protection

Whether it was a car accident, workers’ compensation injury, animal attack, or any other form of personal injury, the experienced legal team at Tuley Law Office will help you receive the compensation you deserve. Our lawyers have decades of experience representing Indiana residents like you, and we know how to deal with insurance companies.

If you are unsure whether or not to pursue a letter of protection or need help receiving the correct compensation to pay back a letter of protection, contact one of our attorneys. Call today or fill out an online form on our website.

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