What is a Letter of Protection and When Do You Need One

The Problem That Letters of Protection Solve

After a car accident, you need medical treatment. But medical treatment costs money. If you do not have health insurance, or if your health insurance refuses to cover accident-related treatment, you face a difficult choice. You can delay treatment and risk your health deteriorating. You can pay out of pocket and risk financial ruin. Or you can use a Letter of Protection.

A Letter of Protection (LOP) is a written agreement between your personal injury attorney and your healthcare provider. Under the LOP, your attorney guarantees that the provider will be paid from the proceeds of your personal injury settlement or verdict. In exchange, the provider agrees to treat you now and wait for payment until your case resolves.

The LOP solves the access problem. It ensures you get the treatment you need without upfront costs. And it creates a direct financial relationship between your legal case and your medical care that can strengthen your claim.

How a Letter of Protection Works

The LOP is typically a one-page document signed by your attorney and sent to the healthcare provider. It contains several key terms.

The guarantee of payment. Your attorney promises that the provider will be paid from the proceeds of the case. This is not a personal guarantee by the attorney in most cases. It is a promise that the provider will have a lien against the settlement or verdict proceeds.

The source of payment. The LOP specifies that payment will come from the personal injury recovery, not from you personally. If the case does not result in a recovery (for example, if you lose at trial), the provider's ability to collect may be limited, depending on the specific language of the LOP.

The provider's obligation. The provider agrees to treat you without requiring payment at the time of service. The provider may also agree to provide medical records and testimony if needed for your case.

The attorney's obligation. Your attorney agrees to notify the provider before disbursing any settlement funds and to hold sufficient funds in trust to pay the provider's charges.

When You Need a Letter of Protection

You Do Not Have Health Insurance
If you are uninsured, an LOP may be your only option for accessing medical care after an accident. Emergency rooms are required to stabilize you regardless of your ability to pay, but ongoing treatment (follow-up visits, physical therapy, surgery, imaging studies) requires a plan for payment. An LOP opens the door to comprehensive treatment.

Your Health Insurance Denies Coverage
Some health insurance policies exclude coverage for injuries caused by third-party negligence (car accidents, premises liability incidents). Others require you to use in-network providers that may not specialize in accident-related injuries. If your insurer denies coverage or limits your treatment options, an LOP allows you to see the specialists you need.

You Need Specialized Treatment
Personal injury cases often require treatment from specialists who have experience documenting injuries for litigation. Orthopedic surgeons, neurologists, pain management physicians, and physical therapists who regularly treat accident victims understand how to create medical records that clearly connect your injuries to the accident. These providers are often willing to treat under an LOP because they are familiar with the personal injury process.

You Want to Maximize Your Claim Value
There is a strategic advantage to treating under an LOP rather than through health insurance. When you use health insurance, the billed amount is reduced by the insurance company's negotiated rates. The defense may argue that your "actual" medical expenses are the reduced amount paid by the insurer, not the full billed amount. When you treat under an LOP, the full billed rate becomes part of your damages. Texas courts have addressed this issue, and the law generally favors allowing the plaintiff to recover the full reasonable and necessary charges, but treating under an LOP can simplify this argument.

The Risks and Downsides of Letters of Protection

LOPs are not without risk. You should understand the potential downsides before agreeing to one.

You are responsible for the bill if the case fails. Most LOPs contain language stating that if the case does not result in a recovery, the provider can bill you directly. If you lose at trial or your case is dismissed, you may owe thousands of dollars in medical bills with no settlement to pay them from.

LOP charges can be higher than insurance rates. Providers who treat under LOPs typically charge their full billed rate, which is often significantly higher than the negotiated rate your health insurance would pay. This can increase the total lien amounts that must be paid from your settlement, reducing the net amount you take home.

The defense will attack LOP treatment. Insurance defense attorneys know that LOP treatment is arranged by the plaintiff's attorney. They will argue to the jury that the treatment was litigation-driven rather than medically necessary. They will suggest that the provider had a financial incentive to recommend more treatment than was needed because the provider's payment depends on the case outcome. A skilled plaintiff's attorney can counter these arguments, but you should be aware that the defense will raise them.

Overtreatment concerns. Some providers who work heavily in the personal injury space recommend aggressive treatment plans that may not be medically necessary. Your attorney should monitor your treatment to ensure it is reasonable and necessary, both for your health and for the strength of your case. Excessive treatment can actually hurt your case if the jury perceives it as driven by the litigation rather than genuine medical need.

How to Choose a Provider for LOP Treatment

Not every medical provider accepts LOPs. Those who do are typically experienced in treating personal injury patients and understand the litigation process. Your attorney can recommend providers who have a track record of delivering quality care, creating thorough medical documentation, and providing effective testimony when needed.

Look for providers who explain your treatment plan clearly, document your progress in detail, respond promptly to records requests, and are willing to testify about your injuries if the case goes to trial. The quality of your medical treatment directly affects the value of your case.

LOP Negotiation at Settlement

When your case settles, the LOP charges must be paid from the settlement proceeds. However, these charges are negotiable. Your attorney should negotiate with every LOP provider to reduce the amount owed. Most providers expect some reduction and will accept less than the full billed amount, particularly when the settlement is limited by policy limits.

Effective LOP negotiation can save you thousands of dollars and significantly increase the net amount you take home from your settlement.

Contact Medina & Medina for a Free Consultation

If you have been injured in an accident and need medical treatment but cannot afford to pay upfront, Medina & Medina can help. We work with a network of trusted medical providers who accept Letters of Protection and provide excellent care. Call us at (512) 883-0012 for a free consultation. You pay nothing unless we win.