Buyer Beware: Letters Of Protection Result In Huge Medical Debt
Let’s say that you’re in a car accident and suffer minor injuries to your spine and back. While the injuries aren’t necessarily debilitating, they are annoying, they keep you up at night, and you want them to go away. However, you haven’t received a settlement from the at-fault driver and you don’t want to wait until their insurance company comes around. Is there anything you can do?
The answer is yes, but before you do it, you need to consider the consequences. For low-income people, hospitals and doctors will throw them a lifeline in the form of a Letter of Protection (LOP). The patient signs the LOP and agrees to use such-and-such amount of money from their settlement to pay for the surgery. The agreement stipulates that they owe a specific amount of money regardless of whether or not they win their lawsuit. Additionally, if their lawsuit recovers less money than they owe, they would still be on the hook for the number in the LOP.
On the lender’s end, there is some risk involved. They will have to wait years before the lawsuit is settled. Since the debt is unsecured, it can be discharged in bankruptcy. However, it appears that doctors are inflating costs related to LOP medical care and this is placing patients between a rock and a hard place.
What is an LOP?
It’s a lien on your personal injury settlement, essentially. The creditor gives you the money for the surgery and places a lien on the settlement to recover the money. Those without either insurance or the means to pay for medical care can use money they haven’t received yet to pay for surgery.
Who benefits from an LOP?
This depends on who you ask. If you ask civil defense attorneys, they will tell you that personal injury lawyers benefit from LOPs because we direct doctors to charge as much as possible to inflate injury verdicts at trial. However, very few traffic accident liability lawsuits actually go to trial. Instead, we present medical bills to the insurance company that does everything in their power to dispute these bills. In cases when a client doesn’t haven’t insurance, we can use an LOP to subsidize the cost of their care. While more oversight is necessary to ensure that LOP services are in line with the industry standard when it comes to costs, most folks do benefit from the LOP arrangement.
What happens if the patient dies?
For the sake of argument, let’s say you are in a car accident, get an LOP for surgery, and then die as a result of the surgery. What happens then? Well, your estate would be on the hook for the LOP, but your personal injury lawsuit would go away because you don’t exist anymore. That would leave your spouse and heirs with the massive LOP debt and no means of recovering the personal injury money because you’re no longer alive. But you’re still on the hook for the LOP.
Talk to a Miami Personal Injury Lawyer Today
If you have been injured due to the negligence of another party, call the Miami personal injury attorneys at the office of Alan Goldfarb, P.A. today to schedule a free consultation and learn more about how we can help.