As a medical provider your job is hardly done after providing treatment to someone. You then have to collect payment for your services – and this can be easier said than done, especially in personal injury cases.

In the ideal world, everyone would have health insurance to cover their medical needs. This, of course, is not the case. So for those who have been injured in an accident – at no fault of their own – and who do not have adequate healthcare coverage but who need medical attention, their bills can be covered by a letter of protection (LOP).

For medical providers providing care to personal injury victims, LOPs are an alternate option of payment. They are to encourage providers to give care. They also serve to protect the victim of personal injury cases and enable them to receive the care they need. Backed in-house by the medical provider, by the law firm representing the victim, or a third party like gain servicing, an LOP simply states that upon resolution of the personal injury case, the balance of the medical bill(s) will be paid when the case finalizes. In return, the provider agrees to provide treatment.

In essence, LOPs allow personal injury victims to receive the care they need – and that they otherwise would not have been able to receive – while also protecting the medical providers providing the care.

The Key Issues Medical Providers Face with Letters of Protection – And Solutions That Solve Them

LOPs can be managed by law firms, medical providers, or sold outright to medical funding companies, like Cherokee Legal Holdings, the parent company of gain servicing. Gain provides the option of buying the LOPs or servicing them on behalf of medical providers.

One issue for medical providers holding their own patient LOPs is that insurance defense counsels have made them one of their primary targets. Some of their common defense mechanisms include:

• Questioning whether medical providers who service their own liens act as investors in litigation.
• Operating a “playbook” designed to trap providers into appearing that there is a conflict of interest, that their medical opinion is biased, and that they are “investors” in these lawsuits.
• Examining communication, including text messages, emails, phone logs and more, between providers and attorneys regarding insurance policy limits, case values, ongoing case updates, settlement influence, negotiations, case involvement, and insurance opt-out requirements.
• Looking for the separation of patient and clinical records and bringing in forensic medical billing experts to search for dual charge masters, varied billing, upcoding, charges that are beyond usual and customary, and more.

Here are some of the additional challenges medical providers servicing LOPs face, and the solutions gain servicing has created to address them:

Operational:

• Challenge: Practice management systems (PMSs) and revenue cycle management (RCM) platforms are not designed to track or manage LOPs, including referral source profitability. As a result, medical providers are often forced to create manual, time-consuming workarounds to track LOPs. In our experience, it is extremely difficult to avoid instances that result in write-offs when using these types of workarounds. Additionally, there is often a large volume of receivables without known or easily managed and tracked due dates.
• Solution: gain servicing has designed proprietary software to automate and optimize the tracking of personal injury lawsuits tied to LOPs. Capabilities include referral source analysis, automated LOP tracking, revenue optimization, reporting and analytics, and additional business intelligence to provide real-time status updates.

Communication:

• Challenge: Medical providers often lump their LOPs in with general accounting and billing functions. There are no special processes or subject matter experts to help ensure LOPs are being managed properly.
• Solution: It is essential for holders of LOPs to be in constant communication with attorneys, paralegals, and case managers to obtain underwriting information, receive case updates, negotiate settlement amounts, and perform collection activities. Liability carriers also need to be contacted in certain circumstances. Gain servicing’s practice is designed around and specializes in these critical forms of LOP communication needs.

Insurance Defense:

• Challenge: Medical providers, PMS and RCM platforms are not equipped to object to discovery requests or know when to enter into confidentiality agreements when discovery is limited.
• Solution: Maintaining healthcare provider integrity and unbiased medical opinions as well as eliminating the financial interest in the outcome of a case are all challenges gain servicing solves for medical providers.

Legislative:

• Challenge: Medical providers, PMS and RCM solutions are not equipped to keep up with state-by-state legislative initiatives and legal requirements.
• Solution: Nationwide lobbying efforts are key to maintaining patient access to quality medical care. Cherokee Legal Holdings and gain servicing are founding members of Americans for Patient Access (APA), a best practices organization committed to maintaining access to quality medical care for all patients regardless of payor source.

Letter of Protection Servicing Options for Medical Providers

There are several servicing options that gain servicing has evolved to address the most pressing needs for medical providers when it comes to LOPs. Our servicing options include:

Partial Advance LOP Servicing:

Partial Advance LOP Servicing is a unique service for medical providers to be able to satisfy their immediate cash flow needs. Gain servicing offers a partial payment upfront and then once a negotiated amount is collected, we then revenue share the remainder of collections with you, the provider.

Revenue Share LOP Servicing:

Revenue Share LOP Servicing is an outsourced service option for medical providers. All medical lien servicing is handled by gain servicing, freeing up medical providers from having an in-house team. Liens are owned by you, the provider, while servicing and collections is handled by our wholly owned gain servicing, LLC. Note: gain servicing collects a servicing fee similar to traditional RCM collection fees.

LOPs serve a critical need for personal injury victims. Whether serviced in-house by a medical provider, through a law firm, or though an outsourced medical funding company like gain servicing, it is paramount that the victims in these cases have access to the medical care they need. A trusted outsourced partner can allow you, the provider, to focus on treating more patients and getting great outcomes for them. Our holistic approach to servicing, including technology, people, and processes, is proven to deliver higher reimbursements, at a lower cost, without impacting referrals. Let us help you help your patients.

If you are a medical provider with questions about letter of protection servicing, please get in touch with us. We would love to discuss your practice, LOP challenges and our services.

Medical liens are a risk for healthcare providers to hold. Most doctors and hospitals avoid providing treatment on medical liens and instead opt for immediate payment by treating patients with insurance or who can pay out of pocket.

The problem with this, of course, is that nearly half (46%) of all Americans are uninsured or underinsured and most do not have enough in savings to pay out of pocket for medical treatment.

But, with a medical lien, a healthcare provider could wait years for a case to settle, and, after waiting, the patient could end up not receiving the settlement amount that was initially anticipated. When case values are lower than expected, this can result in healthcare providers having to reduce their medical bills and/or risk those bills going unpaid altogether.

More than that, if a healthcare provider provides treatment to a plaintiff in a personal injury case on a medical lien and then holds that lien within the practice, there is then a vested financial interest in the case settling and ultimately this can be viewed as a major conflict of interest.

One of the primary targets of insurance defense counsels is healthcare providers holding their own medical liens. Some of their common defense mechanisms include:

• Questioning whether healthcare providers who service their own medical liens are acting as investors in litigation.
• Operating a “playbook” designed to trap providers into appearing that there is a conflict of interest, that their medical opinion is biased, and that they are “investors” in these lawsuits.
• Examining communication, including text messages, emails, phone logs and more, between providers and attorneys regarding insurance policy limits, case values, ongoing case updates, settlement influence, negotiations, case involvement, and insurance opt-out requirements.
• Looking for the separation of patient and clinical records and bringing in forensic medical billing experts to search for dual charge masters, varied billing, upcoding, charges that are beyond usual and customary, and more.

In short, in-house medical liens can wind up being a major headache for healthcare providers. Not to mention, medical lien management requires a lot of expertise, manpower and/or specialized software, extensive and proactive follow-up and negotiation.

Which is why, many providers turn to servicing companies to sell their medical liens.

The Benefits to Healthcare Providers of Third-Party Servicing Their Medical Liens

• Outsourcing is more cost efficient
• Outsourcing increases operating efficiencies
• Outsourcing mitigates risk, including:
  • Insurance defense attacks
  • Discoverability – expensive discovery demands are reduced
  • Medical opinion bias
  • Financial interest bias
  • Billed charges
  • Third-party outsourcing solves for many and varied legislative risks
• Healthcare providers make more money

Ultimately, medical liens require time, dedicated expert resources, due diligence and follow-up in order to be managed properly. The benefit of outsourcing medical liens to a third-party servicing company is that they bring all of these to your portfolio of lien receivables, which often results in more liens being collected on.

How Third-Party Servicing Works

Before treating a personal injury patient on a medical lien, it is important to have an understanding of the case value.

In short, when a healthcare provider partners with a servicing company, like Gain Servicing, the medical lien process works like this:

• The healthcare provider determines if medical treatment is necessary and related to the accident.
• The healthcare provider gives the servicing company a breakdown of fees for treatment to be approved.
• The servicing company evaluates the underlying personal injury case to see if the case is viable to enter into a medical lien agreement with the patient and his or her attorney.
• If the servicing company assesses the case and determines it is viable, the healthcare provider is paid for the cost of the treatment after treatment is provided to the personal injury patient.
• The servicing company recoups funds at the conclusion of the personal injury case.

All of the risk associated with treating personal injury patients on medical liens is almost completely reduced by using a third-party servicing company. Not to mention, treating this population of personal injury patients on medical liens can result in a substantial increase in patient flow, especially as attorneys start to refer their clients to the practice for treatment. This, coupled with partnering with a servicing company that is efficient on collecting medical liens, can result in substantial cash flow and revenue for the healthcare provider.

Healthcare providers who treat patients on a letter of protection (LOP) or medical lien often underestimate the true costs associated with providing services this way. And, some providers may assume that collecting a higher percentage of the bill charged means that their LOP and lien business is more profitable than commercial payers, i.e. health insurance companies. But this is not always the case.

Fact: 46 percent of Americans are uninsured or underinsured. Treating patients on an LOP or a lien enables providers to treat personal injury patients – 84.2 million of which are uninsured or underinsured. But, the business aspects of servicing the treatment of patients on LOPs and medical liens are more complex and costly than most realize.

One solution for providers is to sell their LOP receivables and medical liens.

What is a Medical Lien?

A lien is a document that states you, as the medical provider, will be paid from the proceeds of your patient’s personal injury case. The lien is signed by your patient and his or her attorney. The patient instructs the attorney to pay for your services out of the proceeds of their personal injury case settlement. The attorney signs, acknowledges instructions of his or her client and promises to repay you at the conclusion of the personal injury case. A lien is necessary in the event that there is no insurance to pay for medical services.

What is a Letter of Protection?

An LOP is very similar to a lien; it is a letter from the attorney requesting that you, the medical provider, treat the patient with payment deferred until the successful resolution of the personal injury claim. Sometimes the attorney will put the amount he or she is willing to repay you at the conclusion of the personal injury case. Therefore, you may not get paid for treatment you provide in excess of that amount.

How to Sell LOP Receivables and Medical Liens

If your practice already treats personal injury case patients, you likely have an existing portfolio of medical liens and LOPs against personal injury cases. Accepting medical lien or LOP cases is a necessary part of treating personal injury accident patients. There are many benefits to this, of course, which include the steady inflow of patients who you would not otherwise treat and the subsequent revenue that is generated by providing treatment to this population.

But, LOP and lien practice management has its challenges:

• Staff must manage, track, collect and negotiate LOPs and liens
• Services have been provided for which you hope to get paid on in the future
• The practice loses value against inflation (as you are not charging interest on LOPs or liens)
• In most circumstances, each personal injury case has not been evaluated to determine if there is a strong likelihood the case will bear a financial recovery, which means the practice may not get paid
• Your practice is likely not trained or skilled to negotiate with lawyers, all of whom have a vested interest in reducing the LOP or lien

The solution to this is to present your portfolio of medical liens and LOPs for analysis to a servicing company, like Gain Servicing. The servicing company will do a full review and analysis of the portfolio and present you with a purchase offer. When the sale is complete, the practice will receive a lump sum of money, which can be infused back into the practice. Subsequently, the practice is also relieved of all risk associated with those medical liens and LOPs, and all of the angst and work associated with managing and collecting on them.

Another option is to sell individual lien or LOP cases as they occur, instead of selling them off in bulk. This increases revenues more immediately without any additional risk or cost. This is best when the practice treats a patient who has been involved in an accident where there is a pending claim for damages for the injuries sustained. When there is no insurance to pay for the necessary medical services caused by an accident, either treatment is not provided or you agree to perform the treatment on a lien or LOP against your patient’s personal injury case. Either scenario poses challenges for the practice:

• Scenario 1: No treatment is given.
  • The patient is unable to get much needed treatment.
  • The practice is unable to generate the revenues which could have been generated from providing treatment.

• Scenario 2: You treat the patient on a medical lien or LOP.
  • The practice does not know if the personal injury case is viable, which means payment may never be received.
  • If there is payment, it may not come for several years. This, in essence, functions as an interest-free loan, of which the practice loses money on due to inflation every year.
  • If there is payment, the practice will likely be asked to reduce the amount of the lien or LOP.
  • The practice must invest in time and money to track the status of all medical liens and LOPs.

Why Sell LOP Receivables and Medical Liens

The biggest benefits of selling LOP receivables and medical liens include:

• Substantially increase revenues by providing medical services that otherwise may not have been provided.
• Get paid immediately for the services provided.
• Gain more patients when attorneys and other medical providers know they can refer the practice lien or LOP cases.
• Reduce employee time spent billing, following up and tracking liens and LOPs and trying to collect on them.
• Eliminate the risk of a case being lost or of the practice not getting paid.
• No longer deal with lawyers negotiating liens down as cases settle.
• Remove high risk case files that a servicing company evaluates and determines will likely not settle for the initially anticipated amount.
• Strengthen trial testimony as the practice is able to testify that there is no financial interest in the outcome of the trial.

In short, if there is a viable personal injury case, a servicing company, like Gain Servicing, will work out an LOP or medical lien with the patient and his or her lawyer, wherein you, as the medical provider, will be paid for services rendered with no risk or cost to you. The servicing company will evaluate the underlying personal injury case to see if the case is viable to enter into a lien agreement or LOP with the patient and his or her attorney. If the servicing company feels the case is viable, the practice will be paid for the cost of the medical services. Whereby, the servicing company will get paid back at the conclusion of the personal injury case.

With a servicing company partner, the only thing the medical service provider has to do is determine if medical services are necessary and related to the accident. Once the servicing company is called and the medical service provider gives the servicing company a breakdown of fees for services to be approved, the servicing company will then determine if it is a viable case. If the case is approved, payment will be sent upon confirmation that medical services were rendered; and then they handle the rest.

Selling lien and LOP cases is a great solution for most medical providers. Not only does it increase immediate cash flow, but the practice is able to treat a new group of patients they might not otherwise have been able to provide services for. It’s a win, win, win – for the medical service provider, the personal injury patient and the servicing company.