What is a “Letter of Protection”?
Letters of Protection only apply to contingent matters. There are a group of costs that law firms are required to withhold from the client’s settlement amount to be used to pay bills not advanced by the firm but still incurred by the client. These costs are grouped into their own section on the settlement statement. This ensures these billed are paid.
In many instances people do not have insurance coverage or their PIP benefits are exhausted. When that is the situation some medical facilities and physicians are willing to take a “letter of protection.” This is a document that gives the patient the ability to keep treating without paying for the medical bills immediately or at the time of treatment. These letters of protection typically, if accepted by the facility or physician, allow the patient to keep treating and once a recovery is made the doctor or health care facility is reimbursed.
Many times clients come to us with no insurance coverage and no way to pay for treatment. Even when a client has full-coverage insurance, $10,000 in PIP benefits can be used in short order. When this occurs certain medical facilities and doctors will take a “letter of protection.” This document gives the patient the ability to continue to treat without paying for the medical bill at the time of treatment. Letters of protection typically allow the patient to keep treating and once a recovery is made healthcare provider is reimbursed. Clients should know however, that even with a letter of protection in their medical file they are ultimately responsible for the doctors’ bills if the case does not resolve as hoped.
