Accident Victims (and Their Doctors) Sometimes Get Shafted by Letters of Protection
If your personal injury lawyer wants you to sign a letter of protection for your health care bills, be aware of some potential pitfalls.


There is a lot to like about Texas. Texans are known for being down-to-earth, helpful and friendly. Texas-style BBQ is famous worldwide. And who hasn’t heard Deep in the Heart of Texas?
However, the state ranks high among those with the most vehicular deaths, with Houston earning the dubious distinction of being the city with the greatest number of red light wreck fatalities from 2004-2018, according to the National Coalition for Safer Roads.
“That’s why I would always count one...two...three before driving into an intersection when my light turned green,” “Art” wrote to me, adding, “and, you can’t imagine how many red-light runners I saw during those three seconds!”
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Bad Accident Leads to Hiring a Personal Injury Law Firm
One day, while Art was counting at a stoplight, the driver behind him was texting, failed to slow down, and crashed into him, totaling both cars and leaving Art with severe neck and lower back trauma.
“His insurance company said that I caused the accident by not promptly driving off when my light turned green! On top of that, while I had auto medical payments insurance, the limits were not adequate for my needs.
“So, I hired a Houston attorney – whose ad I saw on television – and he assured me there would be no problem in getting the care I needed. ‘We will send our Letter of Protection (LOP) to the doctors you treat with. This assures them of being paid when the case settles,’ they told me, but none of the physicians I have seen will take my case as long as I am represented by this law firm. What’s going on?”
How a Letter of Protection is Supposed to Work
A letter of protection, also called a medical lien, is commonly defined as:
- A contract between the lawyer, physician and client/patient that assures payment for professional services provided to the patient when there is a financial recovery, by settlement or by trial.
- The treating physician agrees to wait for payment until the case is resolved.
- If there is no monetary recovery, the client who was injured is still obligated to pay the doctor’s bill, but sometimes the lawyer might try to negotiate with the doctor.
That’s fairly straightforward, wouldn’t you agree? In fact, ethics opinions of the State Bar of Texas – and just about every other state bar – make it clear that the LOP creates a fiduciary relationship in which the lawyer is obligated to protect the financial interest of the treating physician.
Lawyers Who Pay Themselves First!
But then, just spend a few minutes talking with the office manager at a clinic specializing in pain management in San Antonio, Texas, and you, too will wind up shaking your head in disbelief, as I did, wondering how some lawyers can justify completely ignoring their legal obligation to protect the doctor’s financial rights the LOP creates. Here is what she shared with me:
“I just read your article When Lawyers Refuse to Pay a Client’s Bill. Our pain management clinic in San Antonio sees a large number of personal injury patients. The LOPs have, in the past couple of years, become almost meaningless. They are NOT letters of protection. In fact, they disclaim any responsibility to pay. Here is typical wording from an LOP we received today:
“‘THIS FIRM IS NOT ASSUMING RESPONSIBILITY FOR THE PAYMENT OF FEES OR SERVICES RENDERED TO OUR CLIENT. However, if compensation is recovered on our client’s behalf, your fees will be reimbursed from any money recovered, provided said recovery is reasonable. Whether or not such recovery is reasonable shall be determined at the sole discretion of this law firm.’
“They are saying, ‘We don’t have to pay you, Doctor, unless we want to!’
“This is so unfair, so wrong! Do you have any insights into how to handle this sort of non-LOP? It seems this has become the norm, and our clinic is considering refusing to accept PI (personal injury) cases now. It’s a waste of time to have bills in the thousands for very expensive procedures only to recover less than enough to pay for the medical assistant’s time, much less to pay the doctor or cover cost of meds and equipment. Thanks for any input you might have.”
I have seen LOPs from several Texas lawyers that make one thing clear. They pay themselves first and in full. The physicians must, on a pro rata basis, reduce their bills, but the lawyers impose no such requirement on themselves!
Every request I had to speak with attorneys whose LOPs have similar language was ignored.
Difficult for Patients to Find Doctors Who Will Treat Them
My reader Art told me that he has had referrals to several physicians, and none will treat him if he remains with the same law firm. Attorney Pennington confirmed that many physicians are rejecting attorney referrals with LOPs for the same reasons.
Texas is not alone with these issues. Florida is a carbon copy and in many instances, far worse.
And the remedy? On condition of anonymity, a Texas legal ethics law school professor told me, “Part of the problem is greed – by physicians who are charging several times what is a reasonable fee and lawyers who ignore their legal obligation under the LOP. It is time for the state bar and medical board to get involved and set proper standards.”
What Patients Should Do
- Read the lien or LOP carefully. To determine that you are dealing with a legitimate letter of protection, look for language that says, in so many words, “We agree to pay reasonable and customary charges for medical services.”
- Be sure to also read the LOP together with the doctor or office manager, and if you see language that says something like, “We decide to pay or not to pay the doctor,” then this is not a true LOP. (And if you run into this issue, the section below discusses the next steps to take.)
- Realize that you, as a patient, are always responsible for the bill in the event that there is no settlement or you lose in court.
- For people who have no private insurance or other means of paying for personal injury-related treatment, they should be referred to the appropriate public hospital.
One more thing: Medical payments coverage isn’t all that expensive and high limits of PIP coverage, if available in your state, can be money well spent.
What Health Providers Should Do
Know that you do not have to accept a lien or LOP that gives the attorney the sole right to pay or not pay you. If you accept such a lien, expect trouble. Instead, it never hurts to cross out the offending language on the document, initial it, have your patient initial it, and insist upon the lawyer also initialing it and returning it to you before scheduling medical procedures.
Do not trust lawyers to do the right thing unless it is spelled out in black and white and they have signed it. If asked for a reduction on your bill, insist on seeing a complete breakdown of the case settlement or jury verdict. Is the lawyer taking a reduction or treating you like a sucker?
If you have a case where the lawyer did not protect your bill despite a signed lien, file a complaint with your state's bar association.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

After attending Loyola University School of Law, H. Dennis Beaver joined California's Kern County District Attorney's Office, where he established a Consumer Fraud section. He is in the general practice of law and writes a syndicated newspaper column, "You and the Law." Through his column, he offers readers in need of down-to-earth advice his help free of charge. "I know it sounds corny, but I just love to be able to use my education and experience to help, simply to help. When a reader contacts me, it is a gift."
-
Dow Hits New Intraday High on Fed Day: Stock Market Today
Not even the most important stock in the world could keep the oldest equity index down on a significant day for markets.
-
Savings Goal Calculator
Tools Want to know how much you need to save each month to reach your financial goals? Our calculator helps you build a realistic savings plan.
-
Gray Divorce Can Throw Your Retirement a Curveball: What to Know
If you're entering retirement and going through a divorce at the same time, you've got some work to do to shore up your long-term financial security.
-
I'm a Real Estate Investing Expert: Optional 721 UPREIT DSTs Can Be the Best of Both Worlds
Before investing in any 721 UPREIT exchange, look for one that offers a straightforward, investor-friendly exit.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)
An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client Reviews
Financial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop Investments
Truck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary Forms
Standard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams Now
Beyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on Retirement
While some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.