A Letter of Protection (LOP) is a legal agreement. It is used in personal injury cases in Illinois to help accident victims receive medical treatment while their case is ongoing. If an injured person does not have health insurance or cannot afford upfront medical costs, their attorney may issue an LOP to a healthcare provider. This letter promises that medical bills will be paid from any future personal injury settlement or verdict. The doctor, physical therapist or other healthcare provider has the assurance that when the case settles, their bill will be addressed. This allows for medical care to many people who might not otherwise have been able to pay for the necessary testing or treatment.
How Does a Letter of Protection Work?
A Letter of Protection ensures that accident victims can get necessary medical care for their injuries, without waiting for compensation. Compensation from the at-fault party’s insurance company can take years in Illinois. Instead of paying out of pocket, the injured person receives treatment on credit, with the understanding that the provider will be paid once the case is resolved. However, a Letter of Protection does not guarantee payment—if the case is unsuccessful, the injured party is still responsible for paying the medical bills. For example, an injured person might have a good case, but as things develop it is discovered that the other driver in a car accident did not have enough insurance to go around. Unless the injured party had underinsured motorist coverage, they may be faced with treatment bills on a letter of protection that exceeds what they end up with in their case. The question will then remain as to what will happen to the medical bill. A skilled attorney will take all of this into account and help you to come up with the best solution depending on many factors in your case.
Pros and Cons of Using a Letter of Protection
LOPs can be extremely beneficial for accident victims who need immediate medical attention but lack the means to pay for it. However, there are some risks to consider:
- Higher Medical Costs: Some providers may charge more for treatments under an LOP than they would for those covered by insurance.
- Financial Risk: If the case does not result in a settlement or favorable court award, the injured person is still liable for the unpaid medical bills.
- Provider Involvement in Legal Proceedings: Healthcare providers accepting an LOP may be asked to testify about the extent of injuries and medical treatment. That can also be a benefit because if a case goes to court, injured parties will want their doctors to testify.
Why Are Medical Costs Higher Under a Letter of Protection?
While an LOP can be a lifeline for those who can’t afford immediate medical care, it often results in higher medical costs. Here are some key reasons why:
1. Lack of Insurance Negotiation
Health insurance companies have negotiated rates with hospitals, doctors, and other healthcare providers. This means that when a patient uses health insurance, the insurer pays a lower, pre-negotiated amount for services. In contrast, when medical providers accept an LOP, they are not bound by these negotiated rates and often charge full price for treatment.
2. Higher Risk for Medical Providers
When a medical provider accepts an LOP, they are taking on the risk that they may not get paid if the personal injury claim is unsuccessful. To compensate for this risk, providers may charge higher rates than they would for insured patients who pay immediately.
3. Delays in Payment
Unlike health insurance, which processes claims and pays providers relatively quickly, a provider under an LOP must wait months or even years for a personal injury settlement or court award. To account for this delay, providers may charge more to offset the time value of money.
4. Medical Liens and Collection Costs
Some medical providers who accept LOPs may also file medical liens against a future settlement. This can sometimes lead to additional administrative and legal costs, which can drive up the total amount owed. (We do not charge your anything additional to prepare LOPs).
Should You Use a Letter of Protection in Your Injury Case?
If you have been injured in a car accident, slip and fall, or other personal injury incident in Illinois, a Letter of Protection may be an option to access medical care while waiting for compensation. However, it’s crucial to consult with an experienced Illinois personal injury lawyer to fully understand the implications and risks. An attorney can help negotiate medical costs and ensure you receive fair treatment throughout your case.
For personalized legal guidance on Letters of Protection and personal injury claims in Illinois, contact O’Connor Cadiz Accident and Injury Law today. Our team is here to help you get the care and compensation you deserve. Schedule a free consultation by calling either our Elgin office at 630 250-8813 or our Schaumburg office at 847 631-6125.