The use of "Letters of Protection" has become the norm in most personal injury cases. They can provide immediate care and treatment for those injured in accidents, however must be employed with care, as they have now become twisted by insurance company attorneys to attack the credibility of one's treating physicians. A Letter of Protection ( or "LOP) is simply a contract entered into between a patient and doctor which promises that, in exchange for providing treatment, the doctor will be paid from a portion of the proceeds received in a lawsuit. They are primarily used where the injured party has no health insurance beyond their $10,000.00 PIP coverage, or, where there is available coverage, a high deductible realistically makes that coverage equally unavailable. The plaintiff's attorney, as the person who will ultimately disburse the proceeds, is usually also made a party to the agreement.
Despite this agreement, the doctor retains the right to seek payment directly from the client/patient if there is no recovery, however this rarely happens. The onus is really on the attorney to make sure that the chances of receiving funds, as a result of either a settlement or trial, are high before advising either the doctor or his client to execute a Letter of Protection. I typically advise my clients that they should view an LOP as giving the doctor a credit card for their treatment. It can be essential for them to receive treatment, but should not be abused since re-payment may ultimately fall back on them to make.
Insurance companies which defend auto-related lawsuits have typically looked with disdain upon LOP's, characterizing them as a way for plaintiffs' attorneys to inflate the medical bills, and therefore the value, of personal injury claims. It is true that if doctors accept LOP's they are not restricted to the often low fee schedules imposed by health insurers. However I do not believe claims that are sometimes made that doctors "overtreat" their patients in order to inflate their charges. I absolutely disagree with accusations made at trials by insurance company attorneys that doctors "adjust" their testimony to make sure the jury decides for the plaintiff and insures that their bills are paid.
While questioning a treating doctor at trial about the existence of an LOP is fair game, insurance companies have attempted to take this type of impeachment a step further by prying into the relationship between the doctor and the plaintiff's attorney. They have argued that there is something sinister afoot where an attorney has referred clients to a particular doctor in the past. The Florida Supreme Court has put this issue to rest in the case of Worley v Central Florida YMCA (2017). In Worley the Court distinguished the relationships between plaintiffs' attorneys and expert medical witnesses and plaintiffs' attorneys and treating physicians. The Court ruled that while the defense could investigate the professional relationship with an expert witness, the one between the attorney and the treating physician was protected by the attorney-client privilege. The defense attorney cannot even inquire whether the attorney referred the client to a particular doctor.
Letters of Protection remain a necessary option for those clients who need extensive medical treatment but do not have sufficient health insurance to pay for it when needed - so long as they are not overused and the plaintiff's attorney is prepared to fend off attacks by insurance company lawyers at trial. Since personal injury claims can take a year or more to receive payment from the responsible party, where a client has an injury which may cause long-term nerve damage without immediate treatment, an LOP can be critical.
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