What Is a Letter of Protection?

Many times, victims of an accidental injury, such as a car accident, do not have health insurance or the funds to pay a doctor for treatment of their injuries. That issue alone will prompt the injured person to contact a lawyer to represent them in their case. But that still doesn't necessarily resolve the issue of getting the client under the care of a doctor. Under these circumstances, an attorney may choose to issue a "letter of protection," also referred to as an "LOP."

An LOP basically provides that the treating doctor will get paid out of any recovery from the client's case so long as 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, or that the doctor will 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.

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 had better be confident that the doctor will negotiate the outstanding 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.

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.