Medical Bills: Letters of Protection and Liens

In personal injury litigation, many times a claimant will have seen a medical provider who has agreed not to receive payment at this time but will still provide services to the claimant. This is the norm for the vast majority of automobile bodily injury cases in Florida. This “IOU” scenario is usually spelled out in a written agreement between the medical provider, the patient, and the patient’s lawyer in a Letter of Protection (LOP) or doctor’s lien.

This agreement allows a claimant to obtain medical services now without any payments up front. Payment is deferred until there is resolution of the claim either by trial or agreement. The standard LOP language indicates that a patient is still fully responsible for payment of their account no matter the outcome of the litigation. However, it is very common at the resolution of the claim for the medical provider and the claimant’s lawyer to negotiate the amount to be paid for the services. For example, if there is a bill for $10,000 but the claimant only receives a $5,000 settlement, the medical provider might agree to reduce their bill or even forego their bill to settle the claimant’s account. Some medical providers even have a standard amount or percentage that they will agree to reduce an outstanding balance for when it comes time to resolve the account.

By having a LOP or doctor’s lien on the proceeds of the lawsuit, the medical provider has an interest in the outcome of the claim. The more the claim resolves for, the more the medical provider may be able to obtain in payment for the services they provided. This interest in the outcome of the claim may skew the medical provider to advocate for their patient more and can be used in cases to show potential bias on the part of the medical provider. This also gives an incentive for a medical provider to inflate the costs of the services they are providing knowing that they will agree to accept a significantly reduced amount when it comes to resolving the account.

In the Worley v. Central Florida Young Men’s Christian Ass’n, Inc. case ruled on by the Florida Supreme Court, bias on the part of a treating physician was deemed to be discoverable and can be proven by showing evidence of LOPs “which may demonstrate that the physician has an interest in the outcome of the litigation.” While LOPs may be a useful tool for a claimant to obtain services if they do not have insurance, LOPs can be helpful to a defendant to show that a provider has inflated their bills based on the LOP and that the provider is biased due to their monetary interest in the outcome of the claim.