If you’ve been injured in an accident and can’t afford the medical bills upfront, you can still get the treatment you need now and pay for it later from the settlement or judgment you may receive. That’s where a Letter of Protection in a personal injury case comes in.
A Letter of Protection (LOP) is a legal agreement from your attorney to your doctor promising that your medical bills will be paid from your future settlement or judgment. Understanding how it works is important because it can help you get immediate medical treatment without putting yourself under financial stress.
At Saeedian Law Group, we’ve helped personal injury victims in California recover over $100 million in compensation. With 16+ years of experience, our team of expert personal injury attorneys can help you secure immediate medical treatment through a Letter of Protection while helping you fight for the compensation you deserve. Contact us today for a free consultation and personalized legal guidance.
In this blog, we’ll break down how a Letter of Protection works in personal injury cases, its benefits and potential risks, and the best alternatives to consider before making a decision.
What Is a Letter of Protection in a Personal Injury Case?
A Letter of Protection is a legal document used in personal injury cases to guarantee payment for medical treatment from the settlement or judgment the injured person may later receive. It is a legally-binding contract between you, your attorney, and your medical provider. The LOP is essentially a promise from the injured person’s attorney to a healthcare provider that the provider will be paid out of any compensation recovered in the case.
An LOP comes in handy when someone is injured and doesn’t have health insurance or can’t afford immediate medical care. In such cases, their attorney can issue a Letter of Protection to doctors, clinics, or hospitals. The letter states that the provider agrees to treat the patient immediately and defer payment until the case is resolved.
If the case results in a settlement or court award, the attorney will deduct the medical bills from the compensation and pay the healthcare provider directly. But if the injured person doesn’t win or recover any money, they are still personally responsible for the medical bills.
Why Would You Need a Letter of Protection?
If you don’t have health insurance, clearing medical expenses out of pocket after an accident can become challenging especially if you sustained severe injuries. A single hospital visit or surgery could cost thousands of dollars upfront. In this situation, your attorney can issue a Letter of Protection to your healthcare provider to get the treatment you need right away while promising that payment will come from your future lawsuit settlement.
Another reason you might need an LOP is to manage financial hardship after the accident. Even if you have health insurance, a personal injury accident can still put you under financial stress. You may be dealing with lost income, high deductibles, and out-of-pocket costs for treatments that aren’t fully covered. But a Letter of Protection can give you breathing room by allowing you to receive medical services without having to pay out of pocket.
Another common reason is ensuring proper medical documentation. If you can’t afford immediate medical treatment, there may be little to no evidence of your injuries, which could weaken your case. But when a provider accepts an LOP, they understand the legal process and will create detailed records of your injuries and treatments.
From calculating medical expenses before you reach maximum medical improvement to estimating future treatment costs, the doctor documents every step of the way. This ensures your medical evidence is strong and supports your attorney’s efforts to negotiate a fair settlement amount for you.
Moreover, you might need an LOP to avoid delays in treatment. Waiting for an insurance payout or settlement can take a long time, and during that delay, your injuries might get worse. A Letter of Protection ensures you can start treatment immediately instead of putting your health on hold until your case is resolved. For example, if you suffered a serious spinal injury, starting therapy or surgery early could prevent long-term damage, while waiting months might make your condition permanent.
How Does a Letter of Protection Work in a Personal Injury Case?
If you’re looking to use a LOP in your case, you need to understand how it works. From getting the letter ready to releasing the funds after settlement, here is a summary of the step-by-step process.
- Your attorney issues the letter to the healthcare provider – First, your personal injury attorney carefully assesses your circumstances to determine whether a letter of protection might be appropriate for you. If yes, they’ll draft and send the letter to the medical professional. The letter explains that you are pursuing a personal injury claim and that you promise the provider will be paid from any compensation you receive. It also authorizes the provider to share your medical records with your attorney so they can be used as evidence in your case.
- Your medical provider reviews the Letter of Protection – Once the provider receives the letter, they review it to understand your health status, the severity of your injuries, and the repayment plan. They then decide whether to accept or decline the arrangement. Acceptance means they’re willing to offer treatment without upfront payment, with the agreement that the payment will come once your claim is settled.
- The medical provider agrees to treat you and defer payment – After accepting the LOP, the provider begins treating your injuries. This might include doctor visits, diagnostic tests, surgery, physical therapy, or any other necessary medical care. Instead of billing you right away, the provider defers payment and records all treatment details and costs.To secure their payment, the provider may file a medical lien on your potential settlement. They may also notify the court, defendant, or health insurance company of the claim against any settlement. This tells the other parties that the provider expects to be paid from the personal injury settlement funds.
- Medical expenses are paid from the settlement or judgment – When you reach a settlement or win in court, your attorney receives the settlement funds and distributes them. From the settlement money, they pay up the medical provider’s bills as agreed in the LOP. Sometimes, your attorney can negotiate with the providers to reduce the bills before paying them, which can help you keep more of your settlement. They also sign releases so that the provider gives up further collection rights against your recovery.However, if you lose the settlement or judgment, most LOPs leave you personally responsible for the medical bills. In such cases, some providers will write off part of the bill, reduce it, or work out a payment plan, but that is a separate negotiation.
Benefits of a LOP in Personal Injury Cases
Using a Letter of Protection can make a significant difference in how you recover after an accident. Here are some of the key benefits of using an LOP in a personal injury case:
- Immediate Access to Medical Care: You don’t have to wait for your case to settle or until an insurance company approves your claim. This is especially important if you’ve suffered serious injuries that need urgent care, such as surgery, physical therapy, or diagnostic tests.
- No Upfront Out-of-Pocket Costs: Medical bills can add up quickly after an accident, especially if you’re not earning income while you recover. An LOP allows you to receive care without paying upfront costs. That way, you can focus on healing instead of stressing about how to cover hospital visits, scans, or therapy sessions.
- Stronger Personal Injury Claim: Insurance companies are more likely to question your injuries if there are gaps or delays in your treatment. By using an LOP, you can ensure you get continuous care, and your healthcare providers will create detailed medical records that support your case. This documentation can help your attorney prove the extent of your injuries and negotiate for a higher settlement.
- Reduced Financial Strain During Recovery: Recovering from an injury is hard enough without the added stress of mounting medical bills. An LOP helps relieve that pressure by postponing payment until your case is over. This can give you peace of mind while you heal, knowing that your care is being handled and you won’t be sent to collections or sued over unpaid medical expenses while your claim is still pending.
- Better Coordination Between Your Lawyer and Your Doctors: A Letter of Protection also helps your lawyer and your medical provider work together more effectively. Because your providers know they will be paid from your settlement, they are more willing to stay in communication with your attorney, provide necessary documentation, and even testify if needed. This teamwork can make your case stronger and help it move more smoothly toward a successful resolution.
What Are the Potential Risks of Using a Letter of Protection?
Before you decide to go for a Letter of Protection, you need to be aware of the potential risks involved. Knowing these risks can help you make an informed decision before using an LOP.
First, you are still responsible if you don’t win your case. Understand that an LOP does not cancel your medical bills; it simply defers payment. If you lose the settlement or judgment, you will still be personally responsible for paying your medical expenses. This could leave you facing more financial responsibility than you can handle without any compensation to cover them.
Secondly, it may result in higher medical costs compared to using insurance. Medical providers who accept LOPs often charge their full rates instead of discounted insurance rates. That way, your overall medical bills cost much higher than if you used insurance coverage.
Furthermore, high charges for medical services rendered under an LOP can reduce your net settlement amount. After attorney fees, case costs, and LOP medical bills are deducted from your settlement, the amount left for you might be much smaller than you expected. As a result, you may no longer have enough balance to cover other damages sustained in the accident.
Moreover, LOPs may cause disputes between insurers, medical providers, and attorneys. Some insurance company lawyers may try to argue that your doctors are biased or exaggerating your injuries to increase the value of your claim. This can create additional disputes and slow down settlement negotiations. It can also put pressure on you to settle the case just to pay off the medical bills, even if the settlement offer is lower than you deserve.
Additionally, using an LOP leaves you with a limited choice of medical providers. Not all doctors or clinics accept to treat patients under Letters of Protection. This means you might not be able to choose your preferred provider. In other words, you may have to work with a smaller list of doctors who are willing to wait for payment. This can sometimes affect the quality or convenience of your medical care.
Alternatives to a Letter of Protection
If you cannot afford medical bills upfront, a Letter of Protection is not your only option. There are other ways to get the medical treatment you need without the risks of an LOP. You should understand these alternatives so you can choose the approach that works best for your recovery and financial situation.
1. Using Your Health Insurance
If you have health insurance, using it to pay for your treatment is often the safest option. Your insurer will usually cover most of your medical costs upfront. Later, if you win or settle your case, your health insurance company may request reimbursement through a process called subrogation. But most times, it’s still less than what you would owe under an LOP.
2. MedPay or Personal Injury Protection (PIP) Coverage
For car accidents, additional coverage such as MedPay or Personal Injury Protection can pay for your medical bills regardless of who was at fault. In “no-fault” states, such as New York, PIP is usually required since each driver’s insurance company covers their own damages and medical expenses after an accident, regardless of who is at fault.
On the contrary, standard auto insurance policies in California do not carry personal injury protection. This is because California is a “fault state”, which means that the at-fault driver in an accident pays for the damages. If both parties’ negligence contributed to the accident, the California Civil Code allows them to share liability – a rule known as pure comparative negligence.
As an alternative to PIP, insurance companies in California offer MedPay as an optional coverage. Note that MedPay is an add-on and does not replace the mandatory liability insurance that drivers must carry in California.
3. Workers’ Compensation Benefits
If you were injured on the job, your employer’s workers’ compensation may cover medical expenses and part of your lost wages. In this situation, you usually don’t need an LOP because your employer’s workers’ comp insurance will pay for your treatment directly. This option can remove the financial burden while you recover and pursue any additional claims.
4. Negotiating Payment Plans with Providers
Some medical providers are willing to set up direct payment plans that let you pay off your bills gradually instead of all at once. Unlike an LOP, a payment plan doesn’t depend on the outcome of your case. So, you won’t risk owing a large balance if you don’t win. This can be a good choice if your treatment costs are manageable and you can afford small monthly payments while your case is ongoing.
5. Seeking Care from Low-Cost or Charity Clinics
If you don’t have insurance and can’t afford private providers, you might qualify for treatment through community health centers, nonprofit hospitals, or charity care programs. These facilities often offer reduced or sliding-scale fees based on income, and some provide free care for patients who meet certain criteria.
Ultimately, the option that is most suitable depends on your specific situation. Before you settle for an LOP or any alternative listed above, it’s best to consult with your attorney. Together, you can do a thorough assessment of your current financial situation and imminent medical costs and then determine whether an LOP is worth it or not.
Worried About Paying Medical Bills After an Accident?
A Letter of Protection can be a lifeline when you need urgent treatment but can’t afford to pay upfront. However, it also carries risks such as higher medical costs, possible disputes, and personal financial liability if you don’t win. That’s why it’s recommended that you talk with an experienced personal injury attorney who can assess your situation and explain safer alternatives before committing to an LOP.
If you need a Letter of Protection or legal guidance through the process, Saeedian Law Group is here to help. With 16+ years of experience, our California personal injury lawyers will not only help you draft a comprehensive LOP; we can also negotiate on your behalf and help you secure the compensation you deserve. Schedule a free consultation with us today.
FAQs
With over 16 years of experience, we understand how confusing it can be trying to decide whether to go for a Letter of Protection in a personal injury claim. Thankfully, our expert personal injury lawyers at Saeedian Law Group have compiled some quick answers to common questions you may have about how LOPs work and how to protect yourself.
What Are the Eligibility Criteria for a Letter of Protection?
Generally, you need to be involved in an active personal injury case and prove that you’re unable to afford medical treatment upfront. Most attorneys will only issue a Letter of Protection if they believe your case has a strong chance of success and that your medical bills can be paid from a future settlement or judgment.
How Should a Letter of Protection Be Drafted for a Personal Injury Case?
A Letter of Protection should be written by your attorney and include your name, details of your injury, the provider’s name, and a clear promise that the provider will be paid from your settlement or judgment. It should also authorize the provider to share medical records with your lawyer and state that you remain responsible for the bills if no recovery is made.
What Is the Impact of a Letter of Protection on Health Insurance Claims?
Using an LOP usually means you’re not billing your health insurance policies for the same treatment, since the provider is agreeing to wait for payment.
Who Can Request a Letter of Protection?
You can request a Letter of Protection through your personal injury attorney if you’ve been injured and cannot afford immediate medical care. Your lawyer will assess your case and decide whether issuing an LOP is appropriate and financially safe based on your potential settlement.
Do All Doctors Accept LOPs?
No, not all doctors or healthcare providers accept Letters of Protection. Some require upfront payment or insurance coverage due to the risk of not being paid if your case is unsuccessful.
Is a Letter of Protection Legally Binding?
Yes, a Letter of Protection is a legally binding contractual agreement between you (through your attorney) and the medical provider. Once signed, it obligates your attorney to pay the provider from your settlement before giving the remaining funds to you.
Can a Letter of Protection Help in Getting Medical Treatment After an Accident?
Yes, it allows you to receive medical care immediately without paying upfront, which can be crucial if you’re injured and unable to afford treatment.
Michael Saeedian founded Saeedian Law Group in 2009 with the goal of providing injured individuals and their loved ones with caring, personalized, and attentive legal representation.