Letters of Protection: Getting Medical Care Without Upfront Payment

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A letter of protection is a financing bridge, not a benefit. When an injured Georgian needs surgery or imaging but cannot front a deductible, and the underlying claim may take years to resolve, a provider can agree to treat now and be paid later out of any recovery. The arrangement is built on contract and common law rather than a single Georgia statute, and since 2025 it carries new disclosure consequences that did not exist when the practice grew up.

The Agreement Itself

A letter of protection is a written promise. A treating provider agrees to deliver care without demanding payment at the time of service, and in exchange a lien-like interest in the eventual recovery is acknowledged and given a stated position among competing medical claims. The instrument does not guarantee the provider will be paid; it shifts the timing of payment and the risk of nonrecovery onto the provider, who is effectively extending credit on the expectation that the claim resolves favorably. Because the obligation rests on the contract between the parties rather than on a perfected statutory hospital lien, its enforceability and priority are matters of agreement and equity, not a fixed code section.

How The Mechanics Run In A Georgia Case

The sequence is consistent across cases. An injured person who cannot pay is matched with a provider willing to work on a protection basis. Treatment proceeds, charges accumulate, and the balance is held rather than billed for immediate collection. When the claim resolves, the protected charges are paid from the recovery according to the priorities the parties set, ordinarily out of the injured person’s share of the proceeds. Provider participation is uneven: hospitals rarely accept protection because they prefer to bill insurance and pursue collection, while chiropractors, physical-therapy practices, certain orthopedic and pain-management physicians, and some imaging centers more commonly do.

A protection charge does not stand alone at distribution. When the recovery is disbursed, a letter of protection competes with any statutory hospital lien, health-insurer subrogation interest, and government-payer claim against the same proceeds, and the order in which those competing claims are satisfied governs what reaches the protected provider and what reaches the injured person. The mechanics of how those liens and reimbursement claims are reduced when a recovery does not make the injured person whole are the subject of the subrogation and healthcare liens discussion (#4) and are not reworked here; the point for a protection arrangement is that the protected balance is one obligation among several, and a large protected charge can be reduced through negotiation when the available proceeds cannot satisfy every claim in full.

Discovery of Protection Terms, Pricing, and Referrals

The most consequential recent change is evidentiary. For claims arising on or after April 21, 2025, Georgia’s Senate Bill 68 made protection arrangements substantially more transparent in litigation. Several categories of information are now expressly relevant and discoverable. The first is the letter of protection agreement itself, exposing its terms rather than leaving them in the background. The second is an itemized statement of the services rendered with specific charges and billing codes, which permits a line-by-line comparison rather than acceptance of a lump sum. The third is the dollar amount of any portion of the account receivable that the provider sold to a third party, since a sale at a steep discount tends to show what the receivable was actually thought to be worth. The fourth is the identity of any person who referred the patient to that provider, which can reveal a recurring referral relationship between counsel and a particular provider that bears on the independence and pricing of the care.

The reason these categories matter is tied to a second SB 68 change. Under the new medical-specials rule, OCGA 51-12-1.1, recovery is limited to the reasonable value of necessary care, and both the amounts charged and the amounts necessary to satisfy those charges are admissible. Protection charges sharpen the tension the statute creates. They are typically set at full retail rather than an insurer-negotiated rate, so the figure billed under a letter of protection often exceeds what comparable care is paid or accepted at elsewhere. A defendant can now place that pricing, the discounted price at which a receivable was sold, and the referral relationship before the jury and argue that the protected charges overstate reasonable value. The effect on any individual claim is uncertain and fact-dependent, but the structural point is that protection charges no longer travel through litigation unexamined.

Weighing Protection Against Existing Coverage

Protection is not free money; it is a deferred obligation that comes out of the recovery. Where health insurance is available, it usually carries lower negotiated charges, though it brings its own subrogation and lien questions that are addressed in the subrogation and healthcare liens post and are not reopened here. The trade-off is between higher protected charges that may later be negotiated down, and lower insured charges that arrive with a reimbursement claim attached.

A purely illustrative comparison of the mechanics, not a statement of value:

Path Charge entered Later reduction Net obligation from recovery
Letter of protection 8,000 negotiated to 5,000 5,000
Health insurance 3,000 paid subrogation asserted varies by made-whole analysis

The figures are arithmetic only and imply nothing about what any claim should resolve for.

Where Protection Tends To Fit

The arrangement is most coherent when needed care is otherwise unaffordable, liability appears sound, and the anticipated value of the claim comfortably exceeds expected treatment costs. It fits less well where reasonable insurance coverage exists, where fault is genuinely contested and recovery uncertain, or where projected treatment costs approach the realistic value of the claim, since in that last scenario the protected charges can consume most of what a recovery produces. Major procedures, especially spinal surgery, magnify the stakes because a single large protected charge can dominate the distribution.

Frequently Asked Questions

Is a letter of protection governed by a specific Georgia statute?
No single statute creates it. It is a contractual arrangement enforced under general contract and equitable principles, distinct from a perfected statutory hospital lien, though SB 68 now regulates what about it is discoverable.

Does a letter of protection guarantee the provider gets paid?
No. It defers payment and assigns a position in the recovery, but if the claim produces no recovery the provider may have no proceeds to reach and bears that risk.

Can the defense see the terms of a protection arrangement in Georgia?
For claims arising on or after April 21, 2025, yes. SB 68 makes the agreement, itemized charges with billing codes, any sold receivable amount, and the referral source relevant and discoverable.

Why are charges under a letter of protection often higher than insurance rates?
Because the provider is carrying collection risk and is not bound by an insurer’s negotiated rate, retail charges are common, and under SB 68 a jury may now weigh those charges against the reasonable value of the care.

  • OCGA 51-12-1.1 (reasonable value of medical specials; amounts charged and necessary to satisfy admissible), enacted by SB 68 (2025), effective for claims arising on/after April 21, 2025
  • SB 68 (2025) letter-of-protection discovery provisions (agreement, itemized charges and billing codes, sold receivable amount, referral source)
  • Georgia common-law contract and equitable lien principles governing protection arrangements

Disclaimer

This article provides general information about how letters of protection function under Georgia law and is not legal advice. Terms, provider practices, and the treatment of protected charges vary by case and depend on current Georgia law. Anyone considering or affected by such an arrangement should consult a licensed Georgia attorney about their particular situation.

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