Many people involved in auto accidents often have difficulty getting their insurers to pay for their medical care. Some health insurers will deny claims for injuries related to the collision stating auto policies should cover them. However, auto insurers won't pay for treatment until it's completed, leaving policyholders in a bind. Some healthcare providers advise patients to send in letters of protection (LOP), but is that really the right choice? Here are a few things to consider before agreeing to use one.
You Have No Other Way to Pay for Treatment
Letters of protection serve as a sort of legally binding IOU. Essentially, you promise to pay the healthcare provider from the money you'll receive from your case settlement or judgment. In return, the healthcare provider agrees to continue treating your injuries like normal. It's an excellent way to ensure there are no interruptions in your medical care and you won't have to fight with the insurance companies to get the bills paid.
However, you'll still be on the hook for the charges if you lose your case. Since healthcare in America is expensive, you could easily be looking at thousands of dollars in medical bills that will have to come out of your bank account. If you're already struggling financially, the added weight of these bills could drive you into bankruptcy (medical debt accounted for 2 million bankruptcy filings in 2013 alone).
Unless you are 100 percent certain you're going to win your case, it would be wise to exhaust all other options for paying for your medical care before signing an LOP. For instance, tap into your retirement savings or find a healthcare provider who will take payment plans. You can always pay the money back (or the bill in full) if your case resolves in your favor.
You'll Get Enough Money from the Case
As noted previously, the LOP requires you to pay your healthcare provider from the proceeds of your auto accident lawsuit. Thus, you need to make sure you'll recover enough money from the case to account for those bills. Failure to negotiate an adequate amount may leave you with nothing after paying your medical bills, attorney's fees, and other assorted costs related to litigating an auto accident case.
To minimize the risk of this happening, be sure to get an accurate estimate of how much your treatment will cost once it's completed and make that a non-negotiable aspect of the amount you're trying to recover from the defendant. Since you'll be charged the doctor's regular rates—rather than the discounted rates insurance companies usually receive—you may need to get estimates from a few medical professionals or consult with industry experts to verify you're asking for a reasonable amount. Talk to your attorney about the best way to handle this aspect of your case.
You Want to Protect Your Credit Score
A third reason you may want to agree to use an LOP is to prevent medical debt from ruining your credit score. Medical bills are treated just like any other debt. After the bill goes unpaid for a period of time, the healthcare provider will send it to a collection agency. Once that happens, the debt will be listed on your credit report and the delinquency can ding your credit score by as much as 100 points or more.
Agreeing to an LOP will put the debt on hold until your case resolves. When you win your case, you can pay the debt off and protect your credit score. At the very least, it can take a while to settle a personal injury lawsuit, so the months or years it takes to reach the finish line will give you time to find a way to pay the money owed if you suspect your lawsuit won't go the way you want.
For help with this or other issues related to litigating an auto accident case, contact a local personal injury attorney.