Personal Injury – My doctor wants a Letter of Protection, what is that?
Many times in personal injury cases, the injured party does not have the funds to cover upfront medical costs while the medical provider expects to be paid at the time medical services are provided. In these circumstances, a Letter of Protection can be supplied to the medical provider by both the attorney and client, which allows the client to receive medical treatment on credit.
A Letter of Protection, which is signed by both the attorney and the client, assures the medical provider that payment for medical services will be paid directly out of the settlement or jury award and is used in all types of personal injury cases, including car accidents. Unfortunately, insurance companies have thrived for a long time low balling injured parties knowing the injured party needs medical treatment but also needs the settlement funds to pay for the mounting medical bills. In steps the Letter of Protection to assist both the medical provider and injured party, taking the bargaining power away from the insurance company.
Once the Letter of Protection is sent over the medical provider it allows the client to receive the treatment needed and in turn the provider agrees to wait until the conclusion of the case to demand payment from either the settlement or jury award. If the attorney settles the case out of court or obtains a judgment, he or she is then obligated to make sure the medical provider’s bills get paid out of those funds, according to statute in North Carolina. If there is no claim of action or no monetary recovery, then the injured party is still responsible for all outstanding bills and the medical provider retains the right to pursue them for the bill, just as if it were any other debt. It is important to understand that the attorney does not personally accept liability of the debts and that the attorney only agrees to pay the medical provider bills with proceeds obtained as part of the case, if any.
Insurance companies have now started to imply that the injured parties doctor is biased in the case since they have a vested interest in a monetary recovery to ensure their bills are paid. Sadly, the insurance companies have no entity other than themselves to blame for the creation of Letters of Protection due to their unsavory practices in the past of denying injured folks what they are owed.