What Is A Letter Of Protection?
What is a “Letter of Protection?”
A Letter of Protection, often abbreviated as “LOP,” is a letter sent by a plaintiff’s attorney to a physician, hospital, or other medical professional.
The letter is a legally binding guarantee that the plaintiff’s medical expenses will be paid out of any future settlements or favorable verdict in the plaintiff’s lawsuit.
When does an attorney send an LOP?
The attorney typically represents an injured plaintiff pursuing a personal injury lawsuit against the party he or she believes is responsible for the injury. Common examples include a plaintiff injured in a car accident or workplace injury.
Unfortunately, physicians and hospitals commonly won’t accept the plaintiff’s own medical insurance as a guarantee of payment for medical services.
This is because the plaintiff’s insurance company often denies the plaintiff’s claim, as it believes the defendant’s insurance company should cover any medical expenses.
Meanwhile, the plaintiff needs medical treatment and is having difficulty obtaining any. The hospital or physician is nervous the plaintiff can’t afford the bill and doesn’t believe the plaintiff’s insurance company will approve the claim.
At this point, the plaintiff’s attorney mails an LOP.
What does an LOP do?
The LOP is a guarantee that payment for any medical treatment will be paid from a future settlement or jury verdict in the plaintiff’s case.
An LOP is a useful tool because, in all the speculation over who should cover the injury, the plaintiff needs medical treatment. Without insurance or a large amount of cash, the plaintiff may not be able to obtain adequate treatment.
However, the LOP allows the plaintiff to gain access to care because it is a legally binding promise the physician and/or hospital will be paid out of any proceeds the plaintiff obtains through settlement or winning the case.
The LOP allows the plaintiff to get the care they need on “credit” with the hospital or physician, who agrees to wait until the case is finished to demand payment.
If the case is settled or a verdict is won, the plaintiff’s attorney is contractually obligated to make sure the hospital or physician is paid from the proceeds.
If the plaintiff loses the case, the hospital or physician can still pursue the plaintiff for the bill, just like any other debt.
Additionally, LOP’s can sometimes help delay collection on previous medical bills.
If the plaintiff already received the care but his or her insurance company ultimately denies the claim, the hospital or physician may begin filing the bill against the plaintiff’s credit.
An LOP can be sometimes be used to delay the hospital or physician from injuring the plaintiff’s credit. The hospital or physician may agree to forego any adverse credit action until after the case is resolved.