This article will attempt to explain what a Letter of Protection is and how it can affect your case. If you have been a victim of someone’s negligence (car accident or another vehicular collision, slip and fall, dog bite), and you do not have health insurance, or the medical benefits you have available are not sufficient to cover your medical bills, a Letter of Protection might be just the solution.
Most often, your case cannot be proved without medical care. But without money to pay bills, you cannot get the care you need. A Letter of Protection is a contract between you, your attorney, and a medical provider. It allows you to get the treatment you need, and in exchange, you agree to allow your attorney to pay the provider directly from your settlement fund, before you touch or see any money.
While the language of a letter of protection varies, it basically states that:
1) The medical provider will extend treatment while your case is pending;
2) The medical provider will not require immediate payment of his bills, will not send the account to collections nor hurt your credit while the letter of protection is in effect;
3) Your lawyer will be instructed to pay the medical provider directly from the settlement of your personal injury claim;
4) Your lawyer agrees to pay the provider directly from the settlement funds after the funds clear the trust account.
Not all medical providers will elect to enter into such an agreement, but most will (surgeons and MRI facilities often do not).
To best explain a Letter of Protection, also known as an LOP, it is important that you first understand how the settlement funds are handled. When your case is settled and the insurance company mails a check to your attorney, the attorney deposits that check into a trust account. A trust account is a special account heavily regulated by the Florida Bar, mostly to protect clients. The lawyer must wait for the check to clear before disbursing any funds. The lawyer also has to receive approval from the client regarding how the funds will be disbursed.
After approval from the client, the lawyer can have a check written from that account to himself (for fees and costs) and a check to the client for the remainder. In the case of a Letter of Protection, before a check is written to you, the medical provider will have a check made to him to cover the medical bills, since the patient could not afford to pay those costs upfront. If the lawyer does not write the check to the medical provider, the lawyer may end up being sued by the provider for breach of contract (the Letter of Protection, which said the attorney had to do this). Doctors are comfortable with this as they feel “protected.”
A Letter of Protection does not relieve the client of the medical bill. Even if there is no recovery, the bills still have to be paid. Letters of Protection are very useful for plaintiffs who cannot afford to pay their medical bills before a settlement is reached.
If you have questions about a personal injury matter, including a Letter of Protection, please call our offices at 813.463.0123.