You need surgery. The accident wasn’t your fault. But your health insurance has a $5,000 deductible, and you can’t afford it. Meanwhile, the personal injury case might not settle for two years.
This is the gap letters of protection fill. LOPs allow injured people to receive medical treatment now, with payment coming later from settlement or verdict proceeds.
What a Letter of Protection Does
A letter of protection is a written agreement between your attorney and a medical provider. The provider agrees to treat you without requiring upfront payment. In exchange, the attorney promises to protect the provider’s interest in being paid from any settlement or judgment.
The LOP doesn’t guarantee payment. Medical providers understand they’re taking risk. If the case produces no recovery, they might receive nothing. But for many providers, access to accident victims who need treatment justifies that risk.
LOPs aren’t unique to Georgia, but Georgia’s personal injury landscape makes them particularly relevant. Without no-fault insurance requirements for medical care, injured Georgians often face out-of-pocket costs their finances can’t handle.
How LOPs Work in Practice
After an accident, you retain an attorney. You need medical care but can’t pay. Your attorney identifies providers willing to work on an LOP basis.
The attorney sends the LOP letter to the provider. The letter typically identifies the patient, describes the accident, and promises that the attorney will protect the provider’s lien against settlement proceeds. Most LOPs give the provider a first position or specified position among medical liens.
You receive treatment. Bills accumulate but don’t come to you for payment. The provider essentially extends credit, betting on your case’s success.
When the case settles, your attorney distributes funds according to lien priorities. Medical providers holding LOPs receive payment from the settlement, typically after attorney fees but before you receive your share.
Finding LOP Providers
Not all medical providers accept LOPs. Hospitals rarely do, they want payment from insurance first and will pursue collection if insurance doesn’t pay.
Certain provider types commonly work with LOPs. Chiropractors frequently treat accident victims on an LOP basis. Physical therapy practices in personal injury networks accept LOPs. Orthopedic surgeons in some markets work with LOPs for surgical procedures. Pain management physicians often participate in LOP arrangements. Imaging centers sometimes provide MRIs and other diagnostics under LOPs.
Your attorney likely has relationships with LOP providers. These networks develop over years of handling personal injury cases. Providers who consistently receive payment from attorney settlements continue accepting new LOP patients.
The Benefits of LOP Treatment
Immediate access to care without financial barriers represents the primary benefit. You get treatment when you need it, not when you can afford it.
LOPs also prevent collection activity. Providers holding LOPs don’t send accounts to collections because they’re waiting for case resolution. Your credit stays intact while your case proceeds.
Treatment documentation strengthens your claim. Medical records from treating providers demonstrate injury severity and treatment necessity. Gaps in treatment, often caused by inability to pay, create arguments that injuries weren’t serious enough to warrant consistent care.
The Risks and Downsides
LOPs aren’t free money. They’re deferred payment obligations that reduce your ultimate recovery.
Provider charges under LOPs sometimes exceed what health insurance would pay. A procedure health insurance might cover for $3,000 might be billed at $8,000 under an LOP arrangement. Providers charge more because they’re taking collection risk.
LOP liens must be satisfied from settlement proceeds. If your case settles for $50,000 and you have $30,000 in LOP obligations, your net recovery shrinks dramatically after attorney fees and costs.
If your case produces no recovery, LOP providers might pursue collection. The letter protects them from case proceeds, but it doesn’t always eliminate their right to collect directly from you if no proceeds exist.
Negotiating LOP Liens
LOP obligations aren’t necessarily fixed. Medical providers understand that excessive liens leave injured clients with inadequate compensation, which makes everyone unhappy.
Attorneys routinely negotiate LOP reductions at settlement. A provider owed $15,000 might accept $10,000 if the alternative is waiting years for potential trial proceeds or receiving nothing from an inadequate settlement.
Provider willingness to reduce varies. Some negotiate readily. Others refuse to budge. Relationships between attorneys and providers matter, providers who’ve worked with an attorney across many cases tend to negotiate more flexibly.
LOPs vs. Health Insurance
If you have health insurance, using it often makes more sense than LOPs. Insurance carriers have negotiated rates with providers, meaning lower overall charges.
But health insurance creates its own complications. Subrogation rights allow insurers to recover medical payments from your settlement. ERISA-governed plans, common with employer-provided insurance, have particularly strong subrogation rights.
The calculation compares: LOP charges minus negotiated reductions, versus insurance payments plus subrogation claims. Neither option is universally better, the right choice depends on your coverage, your injuries, and your case specifics.
LOPs and Treatment Decisions
Medical treatment under LOPs should be driven by medical necessity, not by case strategy. Ethical providers treat what needs treating, regardless of how it affects case value.
However, financial incentives exist. Providers paid from settlements benefit when treatment is extensive. Unnecessary treatment inflates medical bills, which can increase settlement demands but also increases what you owe from your recovery.
Get second opinions on major treatment recommendations. Ask whether proposed procedures are medically necessary or simply potentially helpful. Treatment should make you better, not just build case value.
Surgical Liens and Special Situations
Major surgeries, particularly spinal procedures, sometimes involve specialized surgical LOP arrangements. Surgeons might require additional protections or guarantees given the value of their services.
Surgery liens can consume substantial portions of settlements. A spinal fusion billed at $150,000 might take most of a $200,000 settlement after attorney fees and costs, leaving the injured person with relatively little.
Before agreeing to surgery under an LOP, understand the financial implications. Ask what the procedure will be billed at. Ask whether the surgeon will negotiate the lien at settlement. Model out what your net recovery might look like under different settlement scenarios.
When LOPs Make Sense
LOPs work best when you need treatment you can’t otherwise afford, when your liability case appears strong, and when expected case value substantially exceeds likely medical costs.
They make less sense when health insurance with reasonable subrogation terms is available, when liability is disputed and recovery uncertain, or when anticipated treatment costs approach or exceed likely case value.
Protecting Yourself
Understand what you’re signing. LOPs create obligations. Know what you’re agreeing to before treatment begins.
Keep records of all treatment and billing. You’ll want to verify charges at settlement time.
Communicate with your attorney about treatment plans and anticipated costs. Major treatment decisions should be discussed before they happen.
Don’t let LOP availability drive treatment decisions. Get treatment you need, not treatment that’s simply available because someone will finance it.
Letters of protection serve a valuable function in Georgia personal injury practice. They bridge the gap between injury and recovery, ensuring that financial barriers don’t prevent necessary medical care. But like any financial arrangement, they require understanding and careful management.
This information describes how letters of protection generally function in Georgia personal injury cases. LOP terms, provider practices, and lien negotiations vary by case. For specific guidance about medical treatment financing in your injury case, consult with your Georgia attorney.