A letter of protection is a legal document that protects you from any legal action pursuing restitution for your care. Only an attorney can serve this letter to your medical provider. This letter prevents your unpaid medical bills from going to collections. Additionally, this letter means that the insurance company will not pay your medical bills as you seek treatment. Instead, you must submit all medical bills after completing treatment, then you will receive compensation through a settlement.
Further, a letter of protection differs from advance settlement funding. A letter of protection involves no exchange of money, no interest build-up, and medical bills go unpaid until settlement.
Who Can Issue a Letter of Protection
Attorneys are the only party that can serve a letter of protection to the injured party’s medical provider. However, you must agree to, and sign this contract, as your attorney cannot send this letter without your consent. This letter states that all unpaid medical expenses are to be paid through future settlement or litigation. After receiving a letter of protection the medical provider may agree to cease all collection efforts until settlement, or they may refuse to treat the patient.
It is important to note that a letter of protection is a contract between your attorney and your medical provider. This contract places a lien on the injured party’s medical treatment. Meaning doctors will receive payment after the case is settled. However, the patient will remain liable for all bills left unpaid after their settlement. This agreement does not imply the responsibility of the representing law firm to pay any remaining fees.
Who Can Use a Letter of Protection?
Letters of protection protect those who do not have health insurance, those who have exceeded PIP limits, those who have been injured in motorcycle accidents, and those who have no means to pay for necessary medical treatment. This letter prevents medical bills from being sent to collections while a case is ongoing; allowing the injured party to receive the treatment they may otherwise not have afforded.
However, these letters may present additional difficulties when going to settle your case. Adjusters may argue that your medical provider administered more treatment than was necessary in order to receive a higher payout. Ultimately, the goal of the insurance company is to save money and reduce payout as much as possible.
Upon receiving a letter of protection, a medical provider may refuse service to the injured party. Accepting patients with letters of protection poses a great risk to the businesses of these providers. However, the payout for these providers is significantly higher (in comparison to receiving payment from Health insurance or Medicare) in order to compensate them for the risks.
These risks include the length of time their services go unpaid, not receiving payment for services rendered, or not receiving enough payment to cover your treatment.