Letter of Protection — Delay Medical Bills Until Settlement

Letter of ProtectionNot every personal injury plaintiff has health insurance. Those who are involved in automobile accidents may have PIP or med pay coverage to pay medical bills, but these benefits are often not enough to cover all necessary medical treatment. These plaintiffs are presented with a catch-22: they could pay for the medical care they need if their lawsuit settles, but they can’t prove their case without first getting medical care. This problem can often be solved through a letter of protection (LOP), which is not actually a letter at all, but rather a contract between you, your lawyer and your medical provider which allows you to get the treatment you need in exchange for a promise to pay your provider directly from your settlement funds.

How a Letter of Protection Works

The language of a letter of protection will vary from lawyer to lawyer, but the basic terms will provide that:

  • Your medical provider will provide treatment while your case is pending.
  • Your medical provider will not require immediate payment of his bills, and will not send your account to collections or otherwise hurt your credit while the letter of protection is in effect.
  • You instruct your lawyer to pay the medical provider directly from the settlement of your personal injury claim.
  • Your lawyer agrees to pay the medical provider directly from his trust account when he receives your settlement funds.

Not all medical providers will provide treatment under a letter of protection. Most chiropractors and general family doctors will. Most surgeons and MRI facilities will not. If your current treating doctors will not accept a letter of protection, your lawyer may be able to direct you to someone who will.

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To understand how a letter of protection works, you need some basic information about how settlement funds are handled. When your case settles, your lawyer will receive a check from the insurance company (which most often will require both yours and your lawyer’s signatures to deposit). This check is deposited into the lawyer’s “trust account,” which is a special type of bank account that is regulated by the state bar. After the check clears, and your lawyer obtains your approval of how the settlement funds will be disbursed, he writes checks from the trust account to himself (for fees and costs), to your health insurer, if applicable, to any medical providers who provided treatment under a letter of protection, and finally, to you (whatever is left).

The letter of protection protects the doctor from having to collect his bill directly from you, a/k/a the patient who couldn’t afford to pay him up front. Without a letter of protection, a plaintiff could receive her settlement money, spend it all, and place the doctor in the unenviable position of trying to collect his money from a person who is likely insolvent, and therefore, “judgment proof.” With a letter of protection, if your lawyer fails to pay the doctor directly from the settlement, and gives the money to you instead, the doctor can then sue the lawyer for breach of contract in the event you fail to pay the bill. Doctors are far more comfortable with this scenario, as your lawyer is (hopefully) more than capable of paying the outstanding medical bill.

What a Letter of Protection Does Not Do

A letter of protection, unlike a lawsuit loan, does not relieve you of your obligation to pay the medical provider if you lose your lawsuit. You have to pay the medical bills regardless of your recovery. This also means that if you settle for a low amount, you may wind up still owing part of the medical bills even after your lawyer pays the provider his portion of the settlement.

The letter of protection is not an agreement by your lawyer to pay your medical bills from his own money in the event you lose your case or don’t recover enough to pay your bills. The only way your lawyer would possibly be liable for your medical bills is if he fails to honor the letter of protection and pays the money to you instead. Even in this scenario, you are still liable for the bills — it just makes your lawyer “jointly liable.”

Settlement tip

Negotiating Down Medical Bills Owed Under a Letter of Protection

Unless you get a full recovery in your lawsuit (which is pretty rare, as most cases settle), most of the time your lawyer will try to get your medical providers to reduce the bills you owe under a letter of protection. Doctors hate this, but most of them who have been through this process expect it (and many will overcharge in anticipation of the reduction). They know that it’s better to recover 75% of their bill than to potentially have to litigate a billing dispute. If your lawyer successfully negotiates your medical bill down after settlement, you won’t be responsible for paying the difference between the full bill and the negotiated amount. You will be free and clear from the bill. Your lawyer will get the doctor to approve the reduction in writing, and you should ask for copies of these reduction agreements for your own records when your case ends.

If your lawyer and your doctor cannot come to an agreement on how much your doctor should be paid from the settlement, your settlement funds can be held up until this is resolved. You lawyer will have to hold back at least as much as is needed to cover the full amount claimed by your doctor in his trust account (but he can immediately pay you the rest of the settlement funds, if there are any).

Most of the time, your lawyer and your doctor will be able to work something out. If they don’t, they both know that the only option left is for your lawyer to pay these disputed funds into the court in what is known as an “interpleader” action. Basically, your lawyer says to the court, “I have money which belongs to either the medical provider or my client. You hold it and make the decision as to who gets how much.” Because of the time and expense involved in dealing with an interpleader, neither your doctor nor your lawyer want this to happen. However, keep this in mind as a possibility when settling your case. Unless the medical provider with the letter of protection agrees in writing before your settlement to accept less than his full bill, there is no guarantee that he will take less after settlement.

Letters of protection are a godsend to plaintiffs who couldn’t otherwise afford medical treatment. However, a smart plaintiff must keep the amount she owes under letters of protection in mind when deciding how much she should accept to settle her case. Also, unless your lawyer negotiates a reduction of your medical bills in writing before your settlement, you should settle your case as if you will receive no reduction. This way, any reductions your lawyer can negotiate afterward will just be an added bonus.

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26 Responses to Letter of Protection — Delay Medical Bills Until Settlement

  1. Zak says:

    How long it take to a lawyer to negotiate medical bills under a letter of protection and how much it can be reduce?

    • fl_litig8r says:

      It really depends on the medical provider. I’ve had some that accept my proposed reduction in a day and others that I had to go back and forth with for weeks before reaching an agreement. I usually ask for a reduction that at least matches my fee percentage (so, 33 1/3% or 40%), but in cases where the client really needs a big cut in the medicals to recover anything (such as cases where liability is in question, significantly reducing the overall recovery) I’ll ask for more. It’s pretty rare to see reductions over 40%. From my experience, 25-33% is most common. Sometimes, you can reach and arrangement where the settlement is split 3 ways: 1/3 to you, 1/3 to your lawyer and 1/3 to your medical providers. It really is handled on a case-by-case basis.

      If you made a large recovery that easily covers the medical bills, your attorney’s fee and leaves a good amount left over for you, providers will be more reluctant to reduce.

      • Zak says:

        I really need a big cut, the medical bills that are under a LOP are grossly inflated (3 x average cost), my lawyer says he can work to negotiate a 50% or more, is this true? Why doctors inflate their bills. Thank you very much for your help…

  2. Ty Gibson says:

    Love your blog/website…
    There is a new medical provider called Diagnostic Injury Solutions/Spine Pain Management, Inc. in Florida who is performing nerve block injections for personal injury patients and filming these procedures. I’ve been told, that they charge in excess of over $9,000 for this procedure, where a typical nerve block injection costs under $1,500. In some cases they’ll do multiple injections on the same patient, doubling the cost. They charge these rates under LOP’s. I’m guessing they are selling these LOP’s to funding sources. Are these types of inflated charges legal? Do medicare fee schedules apply to these types of cases in Florida? If not, and a favorable outcome doesn’t occur, even under these circumstances, is the patient still obligated to pay for these inflated costs?

    Thanks in advance.

    • fl_litig8r says:

      First, the easy part: yes, you still owe your medical bills even if you don’t recover anything in your lawsuit. Unlike lawsuit loans, LOPs don’t provide that you only pay if you make a recovery.

      Now, the hard part: can a medical provider charge you whatever he wants for your treatment? Generally, if the price of the medical service is not specified prior to treatment, the provider is entitled to a “reasonable” amount. This can be disputed in court through a breach of contract action (and possibly pre-emptively through an action for a declaratory judgment), and it will be up to the finder of fact (judge or jury) to determine whether the amount requested is reasonable, usually based on customary charges for such services in your area. With LOPs, you’ll often find doctors inflating their charges in anticipation of you requesting a reduction after the case is resolved. So, to a large extent, these matters are resolved by negotiations between your lawyer and the provider, and ultimately an agreement for a reasonable amount is reached. You should probably discuss your concerns with your lawyer now, as he likely has an idea of how much this provider will ultimately want after the case is resolved.

  3. marie says:

    is patient responsible for past LOP bills if doctor dismisses patient

    • fl_litig8r says:

      Yes. The LOP doesn’t guarantee that a doctor will keep treating you. It only provides that the doctor won’t seek payment for treatment rendered until the lawsuit is concluded. Even if there were no LOP in place, you’d still owe the doctor for the treatment he provided. The LOP simply allows the doctor to be paid directly by your lawyer from the settlement proceeds (this is the trade-off for him not seeking immediate payment).

  4. Amanda says:

    If the LOP is signed by the medical provider and the client, but NOT the attorney, is it still valid?

    • fl_litig8r says:

      From your e-mail address, I assume you are in Florida, so let me point you to an ethics opinion that may help. The short version is that if a lawyer signs an LOP, ethically he must honor it. If he doesn’t sign the LOP, and the client instructs him not to honor it, he must advise the client on the risks of doing so (assuming he believes it to be an enforceable contract), but if he has not assumed a legal duty to the third party (which can sometimes happen due to language in settlement agreements, so be careful) it appears he must obey the client, even if it puts the client at risk for a breach of contract claim (which he needs to warn him or her about beforehand).

      If it is unclear whether the lawyer assumed a legal duty to the third party and a compromise cannot be reached, it may be necessary to interplead the funds in dispute and ask a court to decide how they should be disbursed.

      So, it’s not so much a question of whether the LOP is “valid” (it is still a contract even if the lawyer doesn’t sign it, assuming that it is written properly), but rather whether the lawyer must protect the funds on behalf of the third party. If the lawyer had signed the LOP, the answer is a definite yes. When he doesn’t sign the LOP, it becomes a “probably not, but maybe”, depending on whether an argument can be made that the lawyer has somehow otherwise incurred a legal duty to the third party. I suggest reading the entire ethics opinion I linked to above.

  5. Leon Owen Baldwin says:

    Hello,
    I am having a dispute with my Lawyer and have filed a grievance against him. My question to you is that I have outstanding medical bills . I told him I wanted a certain amount after all bills were paid. He agreed at that time ,but for what ever reason he didn’t pay them. In letters from him he told me that I requested not to pay them, which isn’t true. Only one of the bills has a letter of protection . Any suggestions?

    • fl_litig8r says:

      I’m a bit unclear as to what happened to the money that was supposed to go to pay the bills. Did he pay that to you or is it still in his trust account? Did he settle for a lesser amount than would allow these bills to be paid and still give you the amount you approved?

      I’m assuming that there is a dispute between the two of you as to what settlement amount you approved. For example, you said, “Get me X dollars after fees, costs and medical bills are paid” and he claims you said, “Get me X dollars after fees and costs, and by the way don’t pay anything to my medical providers”. If that is the case, then you’ve got a complicated situation to unwind, as the settlement is too small to get you what you want and still pay your medical bills. Because your lawyer agreed to the settlement as your agent, it’s unlikely that you’d be able to get out of it, leaving your only possible recourse to see if the bar grievance process proposes a remedy for him settling without authorization, or possibly suing him for malpractice for settling without authority. The malpractice case may not be as simple as you assume, as it would involve proving not only that he settled without authorization, but also that your case was worth more than the settlement (which is harder than you would think).

      My suggestion would be to pay the medical providers if you have the funds (obviously try to negotiate them down from their claimed amounts based on the fact that you settled and were not fully compensated). Your dispute with your lawyer will have no effect on your obligation to pay these bills, even ones that don’t have a letter of protection. The letter of protection really just puts the onus on the lawyer to pay the bills from the settlement trust account (and even that can be avoided in some cases if the client specifically orders the lawyer not to). Your obligation to pay the medical bills is separate and apart from any letter of protection.

      If you haven’t already, you need to respond to your lawyer’s letters which claim that you told him not to pay your medical providers. If you made no such request, you need to put that in a written response to your lawyer. Your failure to dispute such a claim in writing will work against you (which is why your lawyer wrote those letters), so write a letter disputing this as soon as possible.

  6. Leon Baldwin says:

    Hello,
    It 4 response pertaining to the bills .All he said we negotiated down , but from I discovered they rejected his offer. 2 of the letters said he would pay them .The other 2 said he didn’t/ wouldn’t. The bills not covered under the LOP , I contacted the medical service providers and they told me he never contacted. In his rebuttal the Grievance committee .He claims to have bargained them down. Not really sure how that is possible. Now I am in Connecticut not sure how it varies from state to state.

    • fl_litig8r says:

      I’m not sure what you’re asking. Nothing about the grievance would change, as it would remain in the state where he is licensed. The medical bills would be governed by the law of the state where the service was provided, though if they sued you and got a judgment against you they’d have to domesticate it in your state to execute on the assets you have there. I’m not sure what this lawyer is hoping to accomplish by claiming that he negotiated down bills that are still outstanding and unpaid, unless he’s still claiming that you directed him not to pay them. Of course, that also goes back to the dispute you have with him over how much you would net from the settlement.

      • Leon Owen Baldwin says:

        Hello,
        He states that I told him not to pay the bills, but provides no evidence other than his word. When he withdrew my lawsuit( without telling me.) The break down on his numbers had him paying the bills. I don’t know why it changed. The conversation we had on this topic was I want xxx amount after all bills were paid ,not xxx net. He said ” that won’t be a problem” but I guess it was . He also sent a letter to one of the medical providers stating that he would protect them. Can he be charged with breach of contract? Any where I can look to find out about lop’s in Conn.?

        • fl_litig8r says:

          I’m a bit confused. Did he withdraw as your lawyer, voluntarily dismiss your lawsuit without settling, or settle your case for less than promised? If your case didn’t settle at all, then there’s no possibility of him having breached a contract by not paying an LOP — those are contingent upon the client making a recovery, so if there is no recovery the lawyer has no obligation to honor the LOP. The same is true of he withdraws as your lawyer before a case settles. I have no knowledge of anything special about Connecticut LOPs. If the state bar has a website, you could try searching there to see if it has ethics opinions online about them. Often, ethics opinions will provide more specific guidance as to how the bar interprets its ethics rules, and I’d be surprised if it hasn’t written any about LOPs. It likely won’t contain any information about breach of contract, as state bars always dodge such questions in ethics opinions as being “legal, not ethical, questions.”

          • Leon Owen Baldwin says:

            He told the judge (without my knowledge or consent) that I would take the deal and withdrew the case. He did manage to get it reinstated about 3 months later. Currently waiting on the Committee to make their finding. His letter to the committee was a 2 page letter of statements that had no evidence to back him up or I had evidence to contradict what he stated.

  7. Michael says:

    Hi fl_litigatror I wish I found your site sooner. I hope I don’t overwhelm you with all this. I have a time sensitive dilemma as my lawyer is trying to take me to court.

    I was in a bad accident over 7 years ago in Jacksonville, FL, with no health insurance. My lawyer provided quite a few LOPs at the time for me to get treated, my medical bills ended being around 200k. It was a long drawn out process and 7 years
    &3 appeals later the insurance company paid out maximum policy limits of 350k, the awarded amount was around 650k. The initial amount was paid out 8months ago. My % ended up being tiny, after everyone cut. There was nothing in the initial closing statement about reductions of medical bills, so I had the contract
    re-rewritten for funds to be held in trust, until it can be negotiated and it must have my approval before those payments can be made.

    I argued back and forth with the the lawyer for a month. She really did not like this but eventually conceded in order to get paid herself and all other parties involved. Nothing was done with the medical bills for 9 months. Even though I have an email from her stating that these bills would need to be paid immediately (after negotiation) and needs my signature. Stating in emails “this cannot wait till bad faith case completes”. Of course this ended up being not the story, not a single attempt was made for reductions.
    At the time I requested all copies of the LOPs, most were signed by me, but to my surprise a few of the major ones like the surgeon doctor came back with a blank spot for witness and blank spot for client signature (me). It was fully signed and stamped by only her/lawyer though. I questioned my lawyer on this and she said it doesn’t matter as it was signed by her. I pushed further and she flipped out on me, saying it is because of her good relationship with this doctor that I was able to receive such care and get the position we did in getting the amount. I had no clue how long these negotiations take and we still had a bad faith pending. The amount that was paid to me initially was just around 20k while all else went to medical, her fees, case costs, appellate lawyer fees, etc etc…

    We had to file a bad faith case for the rest..fast frw 8 months later and we settled for the rest at a reduced rate.(in the begiing, of the case she kept saing that they will file motions and get their fees separate from the awarded amount) this never happened and between all the doctors visits and all the rest I kind of forgot about it. I am lucky I had decent email correspondence as record with her even though she would often gloss over my questions she didn’t like.

    I asked recently if there been any progress in negotiating the bills? She said no she was waiting for the the bad faith to complete. She then sent me 2 new closing statements to be signed, ignoring the fact we had one from before for the initial policy limits which allowed everyone to get paid. The first intial 350k amount and the new settlement amount of 150k. After all was set and done I was set to receive 30% of the total settlement amount, which is not shabby but with all the pain and procedures I had, that money wont last more than a year as I need a few more surgeries in the next 5 years to at least try to have a semi normal life.

    So after grilling her out on the medical bills not being touched for 8months. She sent me a proposed initial offering/w outer limits for the bills, none of these offerings followed any guidelines. Some of the places she offered 80% initial offer and one for 20%, was strange. I counter proposed to give them all 28-33% because of the age of the debts. The statue of limitation in FL on medical bills is 5years from what I researched. I told her off the bat that the ones that she can’t locate Lops on to pay me and let me settle it myself, She is saying its unethical because there is enough there for the to be -paid, but will honor my request, regardless that was only 14k of the 200k of medical bills. The rest had Lops. She said to her surprise quite a few of them accepted
    some counter-offered reasonable & I agreed to pay them since they had Lops, those were all the smaller bills.

    Every step along the way she kept trying to get me to sign the new closing statements, I told her that I do not feel comfortable to sign off on them because we had a perfectly valid one for the initial closing statement and it would only be fair since she waited so long/8 months to start settling, that we finish
    settling them first before I sign the new one.

    The problem is some of the bigger LOPs she was just expecting me to pay close to full amount but got stuck by making a compromise with the language.

    She also just contradicted herself, one of the medical bills was only for 2,500 and she previously stated they had an LOP, we offered them 1,000 and they refused saying they wont take anything less than 2k. I asked her for a copy of the lop and she wrote me an email stating that her copy does not have my
    signature or witness signature and she will contact them for their copy. She got back to me stating the medical place couldn’t find their copy period. Stating something along the lines that they may find it later etc.

    I have yet to call her out on this..Now this goes against her earlier argument where she stated that it doesn’t matter if the lop had my signature or not, it had hers and it was because of her good relationship with such and such that I was privileged to receive such care and get to this point. The ones she wanted to pay 80% are a huge part of the medical bills so far the ones knocked out/ approved were small.

    I’m down to about 4 major ones, I have the copies of the lops she provided, 3 of them have all signed ones.

    With the major lop the bull is 80j. I have visited that Doctor as recently as a year ago for a checkup, so statue of limitations wont apply. With all my bills and delinquencies though I’m not worried about protecting my credit much at this point & mney will spent fairly quickly on new surgeries.. He is a good doctor but he isnt the only doctor in town I can go to if I hurt his feelings. I offered him more than the rest knowing that there is no signature from me or a witness on that LOP, just my lawyer. 35k on 80k..doctors office came back stating they will not accept anything less than 70k. The lop my lawyer sent me is a fax dated , just her signature. I wouldn’t put it beyond her she may try to forge one last second, as it becoming apparent to me they have a long standing relationship/friends. The lawyer stated “that without revealing our settlement which is ample to pay him this fee she wont even make the counteroffer”..(she is pushing hard for this as if the doctor is her client and not me)

    As the doctor fees affect my recovery significantly, what are my legal obligations to him at this point? I understand I can be sued, but feel like they are taking me for a fool. The lawyer messed up by not getting my signature or witness signature and the doctor messed up by not doing the due diligence and accepting an incomplete document in my uniformed non lawyer opinion. Am I correct to fight this? Should I pay it at all? or leave my lawyer on the line. What are the laws /power of the Lop without my signature and witness signature?

    I asked her to make a partial payment to me on the ones that settled while we figure out negotiations with the last 4. She stated in email if us lawyers have to wait so will the client. I told her we have a valid document which states the funds to only be held until reductions and I’m only asking for the amount on
    the ones that have been reduced and paid upon. She flipped out on me again, stating why don’t I just sign and approve it all and get the bigger amount. (reason being i want to reduce her fee) I told her I only have to sign the new one anyway as the first one is valid…She stated it’s not sufficient, I told her what do u mean it was sufficient to pay you & all others and some of these bills.. …The problem now is she has threatened me and gave me a deadline to sign the paperwork or she will be filing motions for some sort of court hearing with Fl bar to validate these new documents in front of a judge.(what are the downsides of that? how long would it tie up the funds alltogether, the ones that settled and such?)

    She also has messed up many times along the way, causing these appeals and additional costs, plus hiring additional lawyers. The fact we needed to do this wasn’t explained to me till we started trial, months after I signed the paperwork with her % not knowing I was getting in for 7 years of stress appeals etc etc.. She also didn’t deliver on a few things she promised, like attorney fees getting covered. She hasn’t shared any of the additional costs, I haven’t addressed her yet on her mistakes…But am dwindling in energy as my health is further deteriorating. I think it be fair if she cut her fee by 10% if she does that then I’d be willing to just pay her doctor friend and let it be. But at this moment I’ve been fighting hard to recover as much as I can from the funds set aside in medical. I’m not sure if I have a case for malpractice, plus I really don’t want to go that route because I am soo tired of dealing with this all this. But do I potentially?

    Should I let her proceed in filing these motions by my refusal to sign the closing statements, (one of which that allowed all these medical bills and disbursements) she now wants me to resign with the protective language of needing my approval removed.
    I don’t know how much a new lawyer will cost me to explain all this to the judge,(one of the reasons I was trying to get this partial payment so I can buy myself a little time to keep fighting this) She is well connected I’m afraid the judge will side with her. I feel I will have zero leverage once I do sign, and giving up my last wild card.She could be bluffing too because the emails I have with her she surely has put herself in an interesting situation as well.

    Thanks for any advice you can give me on this.

    • fl_litig8r says:

      It sounds like your lawyer is planning to file an interpleader action, wherein she pays the disputed amounts into the court and asks the judge to decide how they are split between you and the medical providers. This is the typical response where a third party holds funds that are disputed between two other parties.

      As to the validity of the LOPs you didn’t sign but your lawyer did, there is a possibility that the court will find them to be enforceable against you. It could rule that your lawyer acted as your agent in signing the LOPs (think “power of attorney”), making you as the principal bound by the agreement. Even if it does not rule this way, you are still faced with arguing either a statute of limitations argument (which is not a guarantee even for the oldest bills, due to a legal principle known a equitable tolling, which may extend the limitations period depending on the communications made between your lawyer’s office and the medical providers) or that the bills are excessive and unreasonable. It won’t be easy to make these arguments without hiring an additional lawyer (your lawyer, as a witness, will be conflicted out), as you know the medical providers involved will hire their own. So, there are practical considerations as to whether the cost of hiring a lawyer to represent you in an interpleader outweighs the benefit of trying to resolve this amicably without court involvement.

      With respect to legal malpractice (which I’m actually writing my article about), don’t get your hopes up. Considering that your lawyer not only won at trial, but also on appeal and obtained significant additional money from a bad faith claim, I doubt that any grievances you have as to her handling of the case will be considered malpractice.

      While you seem to take issue with your lawyer’s relationship with one or more of the medical providers involved, consider that it was likely that relationship which allowed you to receive such extensive (and expensive) medical care solely on the basis of an LOP. Asking her to stiff the medical providers now puts her in an awkward position, as it would likely affect her ability to secure medical care for future clients on an LOP. I’m not saying that you and she should not negotiate the bills down to a reasonable amount, but I can see where she would feel conflicted about trying to have the medical providers take an amount she considers unreasonably low. In a perfect world, her need to use these doctors to treat clients in the future would not be a consideration — but in reality, I can see why she is having issues with it. This may be ameliorated by you trying to negotiate directly with the providers, as you have no concerns about her future clients, and the doctors will likely not hold anything against her if you personally convince them to take a lowball offer.

      At this point in the case, I’m not sure that your lawyer really has any incentive to cut her fee — especially if its only purpose is to pay the doctors more (doctors who may be able to recover the greater amount on their own through the interpleader). Considering that there are enough funds to pay everyone, I wouldn’t get my hopes up about that. A better time to negotiate this issue would have been before agreeing to the bad faith settlement, when you still had leverage to affect how much she personally received. Now your only leverage is your opinion that she’d sacrifice her own money to save her relationship with the doctors. She may not see such a sacrifice as necessary, as the interpleader would resolve this issue for her without costing her anything personally.

  8. pam says:

    Is it the clients responsibility to total the medical bills for the attorney in a personal injury case?

    • fl_litig8r says:

      I’ve never heard of a lawyer asking his client to do this (I can’t imagine a lawyer trusting a client to do this), so I’d say no. Of course, if you’re really asking whether a lawyer who fails to pay all of the client’s medical bills from a settlement is liable for those bills, the answer is no, unless he signed a letter of protection that made him legally liable (and most lawyers would never do that). In any event, the client would still be liable for the bills even if the attorney fails to pay them.

  9. Pam says:

    Exactly! I am a nurse, suffered a concussion, am out of work due to memory and balance issues (she wants to trust me with numbers?!)and she emailed me yesterday stating, …”the insurance company wants a total amount on your medical expenses to date.” I feel like I need another attorney, there have been other concerns as well with her. We are nowhere near settlement. I need surgery on my shoulder and am still in therapy for the concussion and shoulder injury.

    • fl_litig8r says:

      This definitely throws up some red flags for me. Unless this is a case where the insurer is tendering policy limits, a lawyer really shouldn’t try to settle before a client is at MMI. The fact that she’s asking you to total your own medical bills just sounds lazy. I think you’re right to be concerned. You should ask her why she’s apparently engaging in settlement negotiations when you haven’t yet reached MMI. Who knows whether you’ll recover as expected from the planned treatment? If her answer is anything but “they want to tender policy limits”, you may have a lemon of a lawyer.

  10. Peter D. Sills says:

    I am a Florida resident; having been involved in an auto accident resulting in severe spinal cord compression and ultimately, surgery. The other driver is at fault; there is no compensatory liability on my part. Lop’s were signed for the hospital, surgeon and anestesioligt. The bill from the hospital listing 5 digit code numbers does not correlate to either CPT codes or ICD9 codes. I am on Medicare, with a Medicare advantage plan. The hospital charges for the one day totaled $148,000. Pure nonsense, i.e. one acetometaphin (Tylenol) had a charge of $108.

    Can counsel seek to reduce the payable amounts using the Medicare Part A in hospital fee schedule, and inasmuch as Florida is second only to New Jersey for exorbitant medical charges, what is your opinion as to the best course of action. PIP has covered some of the initial tests, i.e. MRI’s, but the total amount billed by the three medical providers is approximately $200,000. The combined limits of the at fault driver and myself is $400,000. I am seeking policy limits, an LOP reduction of at least 50-60%. My thoughts are to either receive policy limits with that reduction or instruct counsel to file summons and complaint. Your thoughts would be most appreciated. Thank you !!

    • fl_litig8r says:

      Why were you treated under LOP’s instead of having the providers just submit their bills to your Medicare Advantage plan (and then you’d reimburse your plan from your recovery)? If these providers were unwilling to use your Medicare Advantage plan, and would only treat you under an LOP, that’s a pretty strong indicator that they won’t be willing to reduce their bills to Medicare-like rates. The best you can hope for is a percentage reduction (whether it’s as high as you hope remains to be seen) off of their grossly inflated “uninsured” rates. But as you can see from your own example, even a 50% reduction to the acetaminophen still has you paying $54 for one Tylenol, due to their arbitrarily-set chargemaster rates being completely unreasonable to begin with.

      The best case scenario would be to convince them to bill your MA plan, so you get the benefit of its contractual reductions. Then, you can negotiate your MA plan’s lien down (they should reduce by at least the percentage you are paying your attorney in fees and costs). Otherwise, you’re left asking the providers for a reduction from a rate that is grossly inflated to begin with. It’s like buying a car and negotiating down from MSRP instead of negotiating up from dealer cost — you shouldn’t do it.

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