Welcome to this edition of our video blog. I’m Marcus Michles here at Michles & Booth, and we talk about a lot of stuff each week that hopefully is helpful to understand the process.
I want to talk about something that’s pretty widely misunderstood in our industry and that’s how medical bills get paid when insurance runs out or insurance is not available.
How Medical Bills Get Paid Without Insurance Coverage
Now you figure you’re in a car accident, you’ve got your PIP – we’ve talked about that many times here on the show – if you got your personal injury protection, it’s ten thousand dollars in health care, but as many of you know, you go to the emergency room, you get a CT scan or an MRI, that $10,000 could be gone.
Now you’ve got a claim against the other side, the person that caused the accident, but you’re not going to make that claim until you know the full extent of your injuries. Sometimes that requires weeks or months of healthcare just to find out where you get to, right?
So you can’t settle the case on day one. Many times it takes months or weeks to get the case into a position, health wise and medical treatment wise, to know the full extent of your injuries and thus be able to make a complete demand, get complete compensation and settle the case. But what happens in that let’s call it three month window between when you’re PIP is exhausted but you’re still getting healthcare, and it’s too soon to settle your case?
Personal Injury Protection Can Help…
Well, if you’re one of the lucky ones out there that has health insurance, you might file it on your health insurance, right? But if you did that, who’s going to pay the co-pays or maybe meet your deductible?
Let’s say you’re in an accident, you go to the emergency room, and your PIP covers you. Let’s say you referred to an orthopedist because you broke your ankle and the orthopedist is a nice guy, is a nice woman, but they want to get paid for their services. You don’t have any healthcare insurance. You don’t have any health insurance, and your PIP was exhausted in the emergency room, and the other side is not ready to pay yet because they’re not ready to settle, because they don’t know the full extent of your injuries, who pays your medical bills?
Well, there’s companies out there that can finance — we’ll talk about that another day — but what I want to talk about today are letters of protection; LOPs.
Letters of Protection
Letters of protection are letters that are issued by your lawyer. We do it every day; when I say every day, I mean literally every day, multiple times a day, we sign letters of protection that guaranteed to the healthcare provider that they will be paid at the end of the case out of the proceeds that you collect. It’s just like an IOU on the street. I mean it’s…IOUs are a thing of the fifties. Maybe you don’t really see them, but you know…you take a piece of paper, write IOU $25 and give that piece of paper to the person. They carried it around, and when you had the $25, you paid them back and they tore up the IOU.
A letter protection is something that your doctor, hopefully, will sign in an agreement to be repaid at the end of the case. Now if you think about it, that’s pretty nice, because they have really no guarantee that the case is going to be successful, and that’s where your lawyers come in, and that’s where there’s a very subtle but very real difference in what your lawyers can and can’t do for you under certain circumstances.
A good firm that has a good reputation in the community maybe has been tied to that community for awhile, the doctors know which lawyers that are in that law firm. They know which law firms are going to make a collection, and they know which law firms are going to get them paid. Often times I jokingly tell the doctors I’m their bag man. I’m going to collecting money for them as much as for my client, and that’s true, but that’s a fair deal, because if that orthopedist does surgery or the facility fronts the cost of surgery, it could be thousands and thousands of dollars worth of health care that our clients are getting really free at the time only upon the promise to pay at the end of the case, and if you think about it closely, the doctors have no way of knowing how much insurance is out there, but the likelihood of it paying is going to be, when it’s going to be paid; They exhibit great trust in the lawyer to just go get them their money and timely pay them what they’re owed.
Will Your Doctor Accept A LOP?
Now that’s pretty trusting, right? As you might imagine, not all lawyers or law firms are the same in terms of their diligence in doing that; their willingness to do that or their ability to do that quite frankly. So doctors often times only selectively accept letters of protection from certain lawyers or certain law firms. Obviously, if they’ve gotten stiffed or not been repaid, or if the cases have taken too long to resolve or for whatever reason they just don’t like a particular lawyer or particular law firm, then the patient — the client — can’t get the credit to get the healthcare done before the case is over, right?
So it’s a trust relationship. I’m proud to say, here at Michles & Booth, we have a great relationship with the local medical community; great in the sense that they trust that we’re going to do what we say we’re going to do. We’re going to successfully resolve the claim, get them paid what they’re owed, get the client what’s left over. So if you’re out there and you’re wondering “hey what happens when my PIP is exhausted”, talk to your lawyer. Talk to us about a letter protection, owe to issue them, who to issue them to and how they work. It’s called a lien, which is something that gives a legal entitlement to the person that holds it, and it’s a lien against the funds that would be collected.
Communication With Your Legal Team Is KEY
Now, if you’re the client and you’re injured, it’s important that you sit down with your lawyer and understand very clearly while the case is developing what the likelihood of the collection is and what the amount owing on those letters of protection might be. You don’t want to be acquiring health care and have those bills pile up and have more bills than you have insurance to collect from the other side. You want to make sure that as those bills are coming up that you’ve got sufficient insurance to collect. Your lawyer has a sufficient eye on the target to make sure that these don’t get out of kilter. If they do, there’s not enough money taken in to pay the doctors, and if there isn’t enough to pay the doctors, there’s none left for the injured person in the case to begin with. It’s a delicate balance and requires an understanding of how these things work and understanding of the industry.
Well, that’s letters of protection. That’s letters of protection 101, just the basics, but there’s so much confusion out there, I thought we’d talk about it this morning. If you’ve got questions about how to get your medical bills paid, talk to a lawyer. The consultations are free.
If you’ve got questions about letters for protection, how to issue them and who will accept them, give us a call, and we’ll talk about that. In the meantime, if you’ve got questions or comments, you can reach me here at Michles & Booth or you can go watch us on our past programs. You can make some suggestions on what you’d like to hear, what questions you’d like answered. Again, I’m Marcus Michles from the law firm of Michles & Booth. Thanks for watching.