Letter of Protection in Motor Vehicle Accident and Workers Comp Claims
Use a Letter of Protection to Get the Medical Treatment You Need After a Car Accident, Work Injury, or Slip and Fall. Then Pay the Medical Lien from Your Recovery (Settlement or Favorable Verdict) in the Case.
Medical treatment is expensive – even if you have health insurance. But it is necessary if you are injured in a motor vehicle collision or an industrial accident – to recover physically and mentally, as well as financially through a personal injury settlement.
Unfortunately, you may not be able to pay for that medical treatment. If you do not have health insurance or available funds or have exhausted your Medical Payments Coverage (MedPay/PIP), getting healthcare can seem impossible.
Someone else may have to pay the medical bills from your accident. But that person – often the negligent driver or their insurer – does not immediately pay for your health care. And most doctors do not work for free.
This situation is where a Letter of Protection (LOP) can help.
This article explains the purpose of a Letter of Protection, known as a deferred medical payment agreement, and when and why you should use it in your injury case. Many of my clients benefit from deferred payment agreements, with limited downside.
I also include a sample Letter of Protection to Health Care Providers that you can edit for use in your injury or workers comp case.
If you have any questions about your legal rights after an accident, call me: (804) 251-1620 or (757) 810-5614. See why other attorneys and past clients have voted me one of the best lawyers in Virginia for car accidents, workers comp, spinal cord trauma, and brain injury cases. I want to help you get results.
What is a Letter of Protection?
A Letter of Protection is an agreement entered into between you and a medical care provider. You promise to pay the medical care provider from the monies you receive from a jury award or settlement. In exchange, the provider agrees to wait until your case is over to get paid and to stop debt collection efforts.
Is a Letter of Protection the Same Thing as a Deferred Medical Payment Agreement?
Yes.
A Letter of Protection defers medical charges until your case is closed.
Is a Letter of Protection a Contract?
Yes.
The Letter of Protection is a legally binding document between you and the health care provider.
You will have to pay the bill out of your funds, regardless of the outcome. You are responsible for the payment of the bill, even if you recover nothing from the defendant.
Who Sends the Letter of Protection?
A Letter of Protection is sent to a medical provider (physician, hospital, chiropractor, counselor, etc.) by your injury attorney. Both you and your attorney will sign the document. Your attorney should not send a Letter of Protection unless you agree and authorize it.
How Common is the Use of Letters of Protection in Injury Claims?
Very.
It is common for personal injury attorneys, myself included, to provide individual physicians with letters of protection.
How Does a Letter of Protection Help Me? Understanding the Advantages of Treating on a Lien Basis
For those of you who are unable to pay for treatment, letters of protection are essential. These contracts may be the only way you get the medical care you need and deserve.
There are several reasons your attorney may suggest sending letters of protection to your health care providers.
First, to allow you to get medical care while your case is pending.
If you don’t have health insurance or funds, letters of protection are probably your only option to get treatment.
But even with health insurance, you may need a Letter of Protection to get care. Your health insurance may refuse to pay for medical treatment if it believes someone else is responsible for the treatment, such as the workers comp insurer or the at-fault driver.
However, the employer’s insurer or the at-fault driver’s insurer may dispute that they are responsible for your treatment. Or they may expect you to wait until you have reached maximum medical improvement (MMI) and completed care to submit the bills.
This process can take years to resolve. Many doctors are hesitant to treat people if the injury is the result of an automobile collision or work-related accident. They know there will be a delay in payment. A Letter of Protection helps you get that treatment.
Second, you can use the deferred medical bills to increase your damages award.
Usually, the medical treatment provided under a Letter of Protection is charged at full price.
Compare this to the health care provided under an insurance agreement or workers comp fee schedule, where the provider often accepts a fraction of the amount charged.
Though your attorney will likely negotiate a reduction in the bills after trial or settlement, you can use the amount of the full charges when trying to persuade the insurer or jury to pay more. Your attorney will present evidence to show the reasonableness of the charges.
Third, a Letter of Protection can delay collections and potential damage to your credit.
When you go to a medical facility after the accident, the facility will submit the bill to your health insurance if you have it, to your employer’s workers comp insurance if you were hurt on the job, or to you if neither situation applies. But the two insurance companies may refuse to pay the claim until the fault is established.
Suppose you cannot afford to pay the medical bill. In that case, your lawyer may be able to use the Letter of Protection to get the medical facility to agree not to send your invoice to collections. This protects your credit.
Fourth, a Letter of Protection can help you treat consistently. Even if you can afford medical care now, you may run out of funds or insurance coverage before your case is over. Letters of protection can help you treat regularly.
Fifth, a doctor is more likely to cooperate with your attorney and provide reports on causation, the extent of your disability and permanent impairment, and the need for future medical care if the doctor is treating you under a Letter of Protection. They are also more likely to explain how the injury aggravated any preexisting condition, such as arthritis or degenerative disc disease, you may have had. This information increases your claim’s value and helps you explain the full scope of your damages to the insurer and jury.
Does the Health Care Provider Have to Accept the Letter of Protection?
No.
The health care provider is not required to accept a Letter of Protection. Doing so is within their discretion. They can still seek payment from you.
Some doctors are better about accepting letters of protection and treating you on a lien basis than others.
For example, many chiropractors, neurologists, neuropsychologists, and primary care physicians treat accident victims with concussions, post-concussion syndrome, back injuries, neck injuries, and herniated discs regularly. Often they will treat you on a lien basis with a Letter of Protection. This is because they are more accustomed to working with patients on the financial aspect of their treatment.
By contrast, many orthopedic doctors, neurosurgeons, and doctors unfamiliar with litigation, such as dentists, are less likely to accept a Letter of Protection and treat on a lien basis.
Are Health Care Providers Paid More Under a Letter of Protection?
Yes.
Usually, medical care providers receive higher pay under letters of protection than they would receive if private health insurance, Medicare, Medicaid, or a workers comp insurer paid the bills.
Doctors, chiropractors, and other medical professionals know this and can set their charges higher when providing care on a lien basis.
Will a Doctor Providing Treatment under a Letter of Protection Accept a Lower Payment?
Many doctors will write off portions of the bill. In my experience, a discount of 25% to 50% of the total charges is standard.
The final amount that your doctor will accept as payment depends on many factors, including:
- The amount of the verdict or settlement
- The amount of unpaid medical bills from other providers
- The dollar amount of statutory liens on the verdict or settlement proceeds from other providers
- Whether or not there is a workers comp lien. This is common in cases involving work-related motor vehicle accidents, where you can receive both workers comp benefits and file a third-party claim against the negligent driver.
- Your attorney’s relationship with the medical care provider
Can the Insurance Company Use the Letter of Protection Against Me, Damaging My Case?
They may try. But there is a way to “jury proof” the Letter of Protection.
A doctor takes a risk when accepting a Letter of Protection. The danger is that the doctor will receive nothing for the medical treatment provided unless you win your case.
Claim adjusters and insurance defense attorneys sometimes try to use this acceptance of risk against the doctor. The insurer will argue that this relationship proves that the doctor is biased and wants you to win your case and recover more money. The insurer may also say that the treatment is not reasonable or necessary. Or that the charge for the service is too high. These are all tactics to try to get you to accept a lower settlement.
There are several ways to respond to this argument from the insurer.
First, I state that if the insurer had done what it was supposed to – pay for medical care after the accident – you would not have needed a Letter of Protection. The insurer’s decision to deny the case and delay coverage of treatment, putting profits over injured people, forced you to use a Letter of Protection.
Next, I develop evidence showing that it is standard practice for a doctor to obtain a Letter of Protection and that the doctor will be paid regardless of the lawsuit’s outcome. Usually, I develop this evidence through the doctor’s testimony.
Finally, I make sure the Letter of Protection includes language that the insurance company and its attorney would not want to be read to the jury if the case goes to trial. I do this by adding language to the letter that states:
- My client does not have health insurance
- My client cannot afford to pay the medical bill.
- If my client has MedPay/PIP, all available funds from that insurance policy have been exhausted.
No smart defense attorney wants that letter read to the jury.
Do I Need a Letter of Protection if I Have Personal Health Insurance?
Sometimes.
Suppose you have a high-quality health insurance plan with a low deductible and Medical Payments insurance coverage. In that case, you probably will not need to use a Letter of Protection. You can use your health insurance to get the treatment you need after a car accident or work injury.
But suppose you have no health insurance or a health insurance plan with a high deductible. In that case, you may be afraid to get treatment for fear you will have to pay the bills out of your pocket if you lose your case. A Letter of Protection is useful in this situation. You can get the care you need and avoid being sent to collections while waiting for your case to finish.
Can I Use a Letter of Protection for My Workers Comp Case?
Yes.
There are two situations where you may need a Letter of Protection after a work injury.
First, a Letter of Protection is helpful if the workers compensation insurer denies your claim, and you do not have private health insurance, Medicaid, or Medicare. It is often several months between the date you file a workers comp claim and the date of your trial before the Workers Compensation Commission. You cannot afford to go without medical care during this time. A Letter of Protection can help you get that care.
Second, a Letter of Protection is helpful if the workers comp insurer denies that your claim and private health insurance refuse to cover the cost of treatment. This situation often happens when the health insurance company reviews your bills and medical records and determines that your employer’s workers compensation insurance should pay for treatment. You may be able to persuade the health insurance company to pay for treatment by sending it a copy of the workers comp insurer’s denial. But if not, a letter of protection will allow you to get the medical care you need in the meantime.
I recommend sending a second letter – a debt collection stay letter – with your Letter of Protection. Under the Workers Compensation Act, it is unlawful for a health care provider to start debt collection activities for a late bill related to your work injury or occupational disease. All debt collection activities must stop during the workers comp claim process.
Sample Letter of Protection Asking a Health Care Provider to Hold the Account
A Letter of Protection should include the following statements
- You have been injured at work or by another’s negligence
- You seek to recover monies from the defendant and are pursuing a case
- You will pay the provider when the case concludes
- You remain responsible for the payment of the provider’s bills if there is no recovery or if the amount of the charges exceeds the recovery
- The attorney’s fee and costs have priority over the provider’s bill
- You have the right to pay less than the provider’s full charges based on the verdict or settlement amount, the amount of other outstanding medical bills related to the injury, and the reasonableness of the fees.
- If the case settles for less than the amount necessary to pay all outstanding medical bills in full, the provider will receive a pro-rata share of the funds available.
- The provider agrees to send your attorney medical records and reports and invoices, regularly free of charge.
- The provider will not pursue collection while the case is pending.
Below is an example of a Letter of Protection I may send to a medical provider that has treated my client. It works for slip and fall, product liability, workers comp, and motor vehicle accident claims.
You or your attorney can use this form as a template, making changes depending on your case type and preferences.
Name of Doctor
Doctor’s Address
Re: Patient Name: [Name of Client]
Patient Account Number: [Account Number]
Date of Birth: [Date of Birth]
Date of Accident: [Date of Auto Accident or Work Injury]
Dates of Service: [Dates that You Received Medical Treatment]
Account Balance: $[Balance Now Due]
Subject: Letter of Protection Asking You to Hold the Account until the Claim is Resolved
Dear Dr. Smith:
I represent John Client, who suffered injuries in an automobile accident on January 1, 2020. It is my understanding that you are treating him for injuries caused by this crash.
All medical benefits available to John through his automobile insurance policy have been exhausted. Unfortunately, John does not have health insurance or the financial ability to pay for your services currently.
We seek monetary damages through the [defendant’s/employer’s] insurance company, but John’s claim has not yet settled or gone to trial.
For these reasons, we ask you to accept this Letter of Protection and set John’s account aside until we can attempt to settle this claim or have a trial. In exchange for your compassion, we promise to contact you and make arrangements for the payment of your bill before distributing any funds received through a jury verdict or a settlement are distributed to John.
The payment of your bill is not contingent on the outcome of John’s lawsuit. He will owe the money for your treatment regardless of what happens in the case. By accepting this Letter of Protection, you only agree not to seek payment until the civil action concludes and to work with John to determine a fair and reasonable amount for the charges based on the amount he recovers and other outstanding medical bills.
Thank you for your understanding and patience. Please send any future bills or letters of collection regarding John’s treatment to me, pending this claim’s outcome.
Sincerely,
Corey Pollard
Counsel for John Client
Talk to a Top-Rated Personal Injury Lawyer for Free
If you were hurt in a Virginia car accident or suffered a work-related injury and have questions about your legal rights, call me: (804) 251-1620 or (757) 810-5614.
As an injury lawyer, I use Letters of Protection to help my clients maximize their recoveries. These letters put you in a position where you do not have to accept a low settlement offer because of the pressure of medical bills and debt collectors.
What are you waiting for? Call now to get started.
- Will the Dollar Tree Store Closures Affect My Workers’ Compensation? - March 14, 2024
- Workplace Injuries in 2022: BLS Releases Statistics - December 15, 2023
- SSA Proposes a Rule Change to Work History Evaluation - November 1, 2023
