What is a LOP in Medical Billing

Definition of Letter of Protection

A letter of protection (LOP) is a legal document designed to protect an individual’s right to get medical care if he/she has been injured due to the negligence of others. This document helps in getting medical assistance for injuries caused in an automobile accident.

But how would a letter of protection help in protecting the rights of an individual who got injured in a car accident? Also, how is a letter of protection benefits for the health care provider?

Well, a letter of protection is designed in favor of both —the injured and the health care provider.

LOP in favor of the Injured: The injured individual is less likely to get financial help from the health care insurance company conserving his/her injuries were caused in a car accident. It is because a regular health care insurance plan generally provides medical care for acute or chronic illness and not for injuries caused in an accident. This legality puts the injured in a difficult situation to get the medical care he/she needs effectively. In such a scenario, the injured can get a letter of protection from his/her attorney with a hope that the insurance company may pay for the medical services once the case reaches the trial or settlement stage. However, it is important to note that the insurance company is still in the position to deny the payment for the medical services. If the trial ends in favor of the insurance company then the injured is responsible to make the full payment t any cost. Nevertheless, LOPs play an important role in acquiring some amount from the settlement.

LOP in favor of the health care provider: The health care provider needs the promise of getting compensation for the medical services provided to the injured. At this point, the letter of protection plays a huge role in assuring the health care provider that the injured will make the full payment—either from the amount received in the settlement or from his/her own pocket. In other words, the health care provider is free to pursue the injured for the full payment of the medical services in case the insurance company denies payment.

Understanding the LOP

It is important to note that a letter of protection is different from advance settlement funding. Unlike advance settlement funding, the LOP does not promise to exchange money, charge interest, or ask to pay medical bills awaiting the settlement of the case. All the three parties—the injured, lawyer, and the health care provider are obligated to honor the letter of protection only after the case is settled. Following are the ways in which all the parties can honor the LOP:

• Under no pressure, the injured is not supposed to pay medical bills until the case is settled.
• The lawyer cannot ask the insurance company to pay reimbursement until the case reaches the trial or settlement stage.
• The health care provider cannot pursue the injured to pay medical bills until the case is settled.

As a health care provider, you must note that a LOP does not guarantee payment from the injured. However, if you accept the LOP from an injured patient then it is your ethical as well as legal responsibility to treat the injured under the LOP.