What Is a Letter of Protection?

A Letter of Protection (LOP) is a written promise from your personal injury attorney to a medical provider. It says the provider's bills will be paid from any settlement or judgment in your case. This lets you get treatment now without paying upfront. If your case recovers nothing, you remain personally responsible for the bills.

In practice, an LOP is a three-party arrangement among you, your attorney, and your medical provider. Your attorney sends the provider a signed document. It states that the provider's charges will be paid from the proceeds when your claim resolves. In exchange, the provider treats you right away. The provider also holds off on billing you or sending the account to collections while the case is pending.

It helps to know what an LOP is not. It is not a loan, so no money changes hands when it is signed. It is not health insurance, and it does not replace coverage you already have. It is also not a guarantee of payment in every scenario. The promise depends on the outcome of your case. If your claim recovers nothing, the debt to the provider does not disappear.

At The Orlow Firm, we have helped injured New Yorkers get medical care through Letters of Protection for decades. The question we hear most often is simple: how do you get treatment when money is tight right after an accident? This guide explains how an LOP works, when it makes sense, and the real risks to weigh before you sign one.

When Do You Need a Letter of Protection in NYC?

A Letter of Protection becomes useful when you need accident-related care but cannot pay for it out of pocket right now. Several common situations push injured people toward an LOP:

• You have no health insurance, and the provider will not start treatment without some guarantee of payment.
• Your health insurer denies coverage for accident-related injuries. This happens with some liability claims where another party's insurance is expected to pay.
• Your no-fault (PIP) benefits have run out. New York's basic no-fault coverage provides up to $50,000 in combined basic economic loss (covering medical expenses, lost wages, and other related costs), and serious injuries can reach that ceiling quickly.
• You have high deductibles or copays that make treatment unaffordable in the moment, even though you are technically insured.
• The specialist or facility you need does not accept your insurance plan.

None of these situations are unusual. In New York City personal injury practice, Letters of Protection are a common and accepted tool. Signing one is not a red flag, and it does not suggest anything is wrong with your claim. It is simply a way to get care when your bills and your recovery do not line up on the same timeline.

The $50,000 no-fault figure comes from New York Insurance Law § 5102(a), set within New York Insurance Law Article 51. That limit applies to combined basic economic loss benefits. Confirm the amount and coverage details that apply to your specific policy with your attorney.

How Does a Letter of Protection Work? Step by Step

A Letter of Protection follows a fairly predictable path from the day you are injured to the day your case resolves. Here is the typical sequence:

1. Your attorney evaluates the situation. After reviewing your injuries and your ability to pay, the attorney decides whether an LOP fits your treatment.
2. Your attorney finds a willing provider. Not every doctor or facility accepts Letters of Protection. The attorney identifies a provider who does and who can deliver the care you need.
3. Your attorney drafts the LOP. The document spells out the payment terms, identifies your case, and confirms that the provider's bills will be paid from any recovery.
4. The provider accepts and treats you. Once the provider agrees, treatment begins or continues. Billing and collections are paused while the case is open.
5. Your attorney builds the claim. The firm gathers your medical records, documents your injuries, and assembles a demand package for the insurance company or, if needed, the court.
6. Your case resolves. The claim settles or goes to verdict.
7. The provider is paid from the proceeds. Your attorney pays the LOP provider directly from the settlement or award, following the terms of the agreement.
8. You receive the remainder. After attorney fees and approved case expenses, the rest of the recovery goes to you.

One distinction causes a lot of confusion, so it is worth pausing on. A Letter of Protection is not the same thing as a medical lien. An LOP is a voluntary, private contract that your attorney sets up with a specific provider. A lien is often a statutory right that attaches automatically. Medicaid, Medicare, and workers' compensation carriers can hold liens that follow you no matter what your attorney does. Both can affect how settlement money is split, but they arise in very different ways.

Benefits of a Letter of Protection After an Accident

The biggest advantage of a Letter of Protection is timing. Injuries are easiest to treat early. Delays in care can slow your physical recovery and weaken the documentation your case depends on. An LOP removes the upfront cost barrier so you can start treatment right away.

The benefits go beyond speed:

• No out-of-pocket cost during a hard time. Many injured people are out of work and short on cash exactly when they need care most. An LOP lets treatment proceed without draining your savings.
• Access to the right doctor. Instead of being limited to whoever accepts minimal insurance, you can see the specialist your injury actually calls for.
• Continuity of care. Long courses of physical therapy, specialist follow-ups, and surgery can move forward without billing interruptions in the middle of treatment.
• Stronger documentation. Consistent, complete medical records help establish how serious your injuries are, which supports the value of your claim.
• Room to negotiate at the end. When the case resolves, your attorney can often negotiate the outstanding LOP balance down. That can increase the amount you take home.

That last point connects to a feature of New York law. Under New York General Obligations Law § 5-335, an insurer's ability to claim reimbursement against a personal injury settlement is limited in many situations. The final amounts owed are often negotiable rather than fixed. That gives an experienced attorney room to work down what you ultimately pay out of your recovery for accident-related medical bills.

Risks and Limitations You Should Know

A Letter of Protection is a useful tool, but it carries risk. You deserve a clear-eyed picture before signing one.

The most important point is this. If your case fails, or if it settles for less than your medical bills, you still owe the provider. An LOP does not erase the debt. It defers it. The promise of payment is tied to a recovery. When there is little or no recovery, the obligation falls back on you.

Other limitations are worth understanding:

• Provider rates can be higher. A provider treating under an LOP is not bound by an insurance company's negotiated rates, so the charges may be billed at full price. That can mean a larger bill than if your health insurance had covered the same treatment.
• The defense may challenge the treatment. Defense attorneys sometimes argue at trial that LOP-based care was "lawsuit-driven," meaning motivated by the arrangement rather than real medical need. This is a known litigation tactic. Courts recognize LOPs as legitimate, but it is a point your attorney will need to address.
• Not every provider accepts LOPs. Some hospitals, surgical centers, and specialists in NYC decline these arrangements. You may need to change providers to find one who will take part.
• A large balance shrinks your net recovery. The more you owe at the end, the less of your settlement is left for you after the provider is paid.

There is also the question of credit. Whether a pending LOP balance is reported to credit bureaus depends on the specific provider's practices, and the rules around medical debt have been changing. Do not assume an LOP either protects or harms your credit. Ask the provider how they handle the account before treatment begins.

How Does a Letter of Protection Interact with New York No-Fault (PIP)?

This is where New York differs from much of the country, so it is worth understanding clearly. In a car accident case, New York's no-fault law requires auto insurers to pay up to $50,000 in combined basic economic loss (medical expenses, lost wages, and other related costs) regardless of who was at fault. That coverage is called Personal Injury Protection, or PIP. It is defined in New York Insurance Law § 5102(a) and required under Article 51.

PIP and a Letter of Protection are different mechanisms, and they should not be confused. PIP is insurance that pays first, up to its limit. An LOP is a private agreement that usually comes into play after PIP runs out. In a typical LOP personal injury NYC situation, a Letter of Protection becomes necessary in one of three scenarios:

• Your PIP benefits have run out because your treatment passed the $50,000 ceiling.
• A particular treatment is not covered by PIP.
• You are a pedestrian or cyclist hurt by a vehicle, but you do not have your own auto policy supplying PIP.

For accidents that are not car accidents, no-fault simply does not apply. A slip and fall case or a construction accident has no PIP coverage at all. In those cases, a Letter of Protection often becomes the main way to get care without paying upfront.

Workers' compensation is its own separate world. If your injury is covered by workers' comp, those medical bills generally go to the comp carrier rather than through an LOP. The billing path is different. An attorney can explain which system applies to your particular injury.

What Happens When Your Case Resolves?

When your claim settles or you win at trial, the money does not go straight into your pocket. It follows a clear order of distribution, and the Letter of Protection is built into that order.

First, your attorney receives the settlement funds and holds them in escrow. From there, the LOP providers are paid according to the terms of the agreement. Attorney fees, usually one-third of the net recovery on a contingency case, and any approved case expenses are also accounted for at this stage.

This is where negotiation matters. Before paying the providers, your attorney can often negotiate the outstanding LOP balances down. That leaves more money for you. Once the providers and fees are resolved, the rest of the proceeds are paid to you.

If the case is lost, the picture is harder. You owe the providers under the LOP, and the attorney cannot pay those bills from a recovery that does not exist. Even then, a firm can sometimes help you negotiate a reduced balance or a manageable payment plan. The obligation itself still remains yours.

Common Misconceptions About Letters of Protection

A few myths come up again and again. Here are the ones worth correcting:

• "It's a loan." No. No money is advanced to you. An LOP is a deferred billing arrangement, not borrowed cash.
• "All doctors accept LOPs." No. Acceptance is decided provider by provider. Always confirm in advance that a specific doctor or facility will take part.
• "They're only for catastrophic injuries." No. LOPs are used for injuries of all severities, as long as there is a personal injury claim behind them.
• "An LOP weakens my case." No. Courts and insurers treat Letters of Protection as standard practice. Using one does not imply your injuries are exaggerated.
• "I don't need an attorney to get one." In practice, providers want an attorney involved. That way they can be confident the claim is real and that payment will be pursued.

Related Questions

What happens if I lose my case and have a letter of protection?

If your case does not result in a recovery, you remain personally responsible for the medical bills covered by the Letter of Protection. The LOP defers payment; it does not cancel the debt. A firm may help negotiate a reduced balance or a payment plan, but the obligation stays with you.

Is a letter of protection the same as a medical lien?

No. A Letter of Protection is a voluntary, private contract your attorney creates with a provider. A medical lien is often a statutory right (such as those held by Medicaid, Medicare, or a workers' compensation carrier) that attaches automatically. Both affect how settlement money is split, but they arise in different ways.

Can I use a letter of protection if I already have health insurance?

Yes, in some situations. People with insurance still turn to LOPs when their plan denies accident-related claims, when deductibles or copays make care unaffordable right now, or when the specialist they need is out of network. An attorney can help you decide whether an LOP makes sense alongside the coverage you already have.

Do I need an attorney to get a letter of protection?

As a practical matter, yes. Providers want assurance that a legitimate claim exists and that someone will pursue payment. They typically require attorney involvement before they agree to treat under an LOP. The attorney drafts the document, manages the claim, and pays the provider from any recovery.

Sources & Official Resources

New York Laws Cited

1. NY Insurance Law § 5102(a) — Definition of Basic Economic Loss
2. NY Insurance Law Article 51 — Comprehensive Motor Vehicle Insurance Reparations
3. NY General Obligations Law § 5-335 — Settlements; effect on insurers

Helpful Resources 4. NY Department of Financial Services — No-Fault Insurance FAQ

Contact The Orlow Firm

If you have been injured in an accident in Queens or anywhere in New York City, you may be worried about how to pay for medical care. A Letter of Protection may let you begin treatment today without paying out of pocket. The Orlow Firm has helped injured New Yorkers handle exactly this situation since 1982.

Call (646) 647-3398 for a free consultation. We work on contingency, so you pay nothing unless we win.

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