There is a longstanding and widely used practice in the world of personal injury called Letters of Protection.
Suppose you’re hurt in an accident and you don’t have medical insurance. Under those circumstances, some physicians (who typically cater to personal injury victims) accept a written promise from the injured patient and his attorney to pay the doctor’s bills from the proceeds of the case–a letter of protection.
This practice has led to abuses in the form of exaggerated charges, and exposes the physician to claims of bias arising from a financial interest in the outcome of the case. The new law attempts to purge abuses of this practice in several ways:
Letters of protection must be disclosed
The name of any person who referred the client to the physician with the letter of protection must be disclosed (Attorney client privilege does not apply and if the attorney referred the client, it must be disclosed.)
Doctors must code their charges in accord with standard insurance charges.
Most significantly, the new law specifically allows discovery of the details behind the referral relationship between the law firm and the doctor: How many cases has the firm referred? How much money has been involved? This could be embarrassing for certain large volume personal injury mills who keep using the same questionable doctors over and over.
LOPs are not necessarily a bad practice. Abused, they can result in exaggerated diagnoses and overcharges. But for a genuinely injured client with no other means of paying for care, they can be invaluable.
