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What Is a Letter of Protection (LOP) in a Personal Injury Case?
A Letter of Protection (LOP) is an agreement your attorney signs with a medical provider so you can get treatment now and have it paid for later, directly out of your settlement. It solves a real problem — getting care without paying upfront — but it's often confused with pre-settlement funding, and the two work very differently.
Here's how an LOP actually works, what it doesn't do, and how it compares to a non-recourse cash advance.
Why It Matters
How a Letter of Protection Works
- An LOP involves three parties: you, your attorney, and the medical provider. Your attorney signs the letter, promising the provider will be paid from any settlement or judgment in your case.
- The provider treats you without requiring upfront payment and typically without billing your health insurance, since the LOP gives them a different path to payment.
- An LOP is a voluntary, private agreement between your attorney and the provider. It generally isn't filed in any public record, which makes it different from a formal lien.
- LOPs are common when a client has no health insurance, has a high deductible, or when a provider is reluctant to bill insurance for treatment tied to a pending injury claim.
- When your case resolves, your attorney is responsible for paying the provider out of the settlement proceeds before disbursing the remainder to you.
Details
Letter of Protection vs. Pre-Settlement Funding
An LOP and a pre-settlement cash advance both help while a case is pending, but they solve different problems and carry different risks.
- An LOP only covers the cost of medical treatment, paid directly to the provider. It doesn't put any cash in your hands for rent, groceries, lost wages, or other bills.
- A pre-settlement cash advance, like the funding Caseflow Capital provides, is paid directly to you and can be used for any expense while your case is pending.
- The biggest difference is risk. With most LOPs, you remain personally responsible for the medical bill if your case loses or settles for less than the outstanding balance. With non-recourse pre-settlement funding, you owe nothing back if your case doesn't result in a recovery — the funding company absorbs that risk, not you.
- Some clients use both in the same case: an LOP to access treatment, and a cash advance to cover living expenses. Your attorney tracks both separately and accounts for each at settlement.
Details
What to Know Before Signing a Letter of Protection
- Ask whether the provider bills at standard rates or at a different rate under the LOP. Some providers charge more under an LOP than they would bill insurance, which can reduce what's left for you at settlement.
- Make sure your attorney is tracking every outstanding LOP and lien on your case. At settlement, these are typically paid out of the gross recovery before you receive your share, as part of the disbursement order your attorney manages.
- If your case settles for less than expected, ask your attorney early about negotiating down the LOP balance. Providers will often accept a reduced payment, similar to how medical liens are frequently negotiated.
- A provider's willingness to treat you under an LOP isn't a signal about how strong your case is or what it's worth. It only reflects that provider's own billing practices.
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Q&A
Frequently Asked Questions
What is a Letter of Protection (LOP)?
A Letter of Protection is an agreement between your attorney and a medical provider that lets you receive treatment now and have the cost paid later out of your settlement, instead of paying upfront or billing health insurance.
Is a Letter of Protection the same as a medical lien?
No. An LOP is a voluntary agreement between your attorney and a provider and generally isn't filed anywhere publicly. A medical lien, including statutory hospital liens in many states, is a formal legal claim against your settlement, and the two can apply to the same case at the same time.
What happens if I lose my case but have an outstanding LOP?
You generally remain personally responsible for the medical bill. This is the key difference from non-recourse pre-settlement funding, where the funding company absorbs the loss if your case doesn't result in a recovery.
Can I get cash for living expenses through a Letter of Protection?
No. An LOP only covers the cost of medical treatment paid directly to the provider, it doesn't put money in your hands. A pre-settlement cash advance is a separate product that can cover rent, lost wages, and other expenses while your case is pending.
Can I have both a Letter of Protection and a pre-settlement cash advance on the same case?
Yes. They address different needs and are tracked separately by your attorney, who accounts for both at settlement alongside attorney fees and any other liens.
Pre-Settlement Funding
Need Help With More Than Medical Bills?
If you're waiting on a settlement and need help covering rent, lost wages, or other expenses, a non-recourse cash advance might help — apply today, most reviews are completed within 24 hours.