Selling Letter of Protection Receivables and Medical Liens

By | Blog

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.

Private Equity in Healthcare

By | Blog

Private equity interest in healthcare is on the rise. According to Bain & Company, healthcare private equity activity in 2019 posted a very strong performance relative to the prior year. The total disclosed deal value reached $78.9 billion, the highest on record. And, interest is only continuing to mount, especially in a post-COVID-19 market.

Oftentimes, the private equity strategy in healthcare is to either combine multiple practices of the same type in order to dominate an entire market, or to create a large multi-specialty practice. Investors in the healthcare space are typically looking to get their money back within 3-5 years (Medical Economics).

The stakes are high, and any one poor financial decision could make or break a private equity firm’s strategy and results.

A Partner to Private Equity-Backed Medical Practices: Gain Servicing

Gain servicing, a Cherokee Legal Holdings company, is an AI-driven servicing and financing company specializing in letter of protection (LOP) solutions for healthcare providers and investors.

Unbeknownst to investors, LOPs can account for a significant amount of a medical practice’s outstanding accounts receivables.

Here is how LOPs work and how they end up as an aged accounts receivable:

  • For personal injury victims in need of medical care as a result of the accident they were involved in, and who do not have adequate healthcare coverage for the care they need, their bills can be covered by a letter of protection.
  • For medical providers providing care to personal injury victims, LOPs are essentially an assurance of payment. They are to encourage providers to give care without having to assume the risk of not being paid. LOPs also serve to protect the victim of personal injury cases from being sent to collections while their case is ongoing.
  • 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 remaining balance of the medical bill(s) will be paid when the case finalizes.
  • Because LOPs are backed by a personal injury case, traditional billing, accounts receivable and collections departments do not always know how best to handle these files. Simply put, medical practices are not equipped inhouse to successfully collect on letters of protection. No electronic health record system exists that appropriately captures personal injury case statuses or liens, and none have the third-party liability concept built into them. There is also no workflow or status option fit for personal injury cases, so a medical practice’s results are only as good as their manual follow-ups and what they are able to track in Excel.

Gain servicing manages LOPs on behalf of healthcare practices. It is a service built on a mix of technology, people and processes, and it is proven to deliver higher reimbursements, at a lower cost, without impacting referrals to the practice.

Here are some of gain servicing’s biggest deliverables to healthcare practices and their investors:

  • More LOP payouts: Gain servicing’s LOP Servicing results in fewer write-offs and greater paid-in-full accounts.
  • Eliminates avoidable losses: Gain servicing follows the lifecycle of unpaid LOPs by tracking the status of the lawsuit underlying each LOP and taking corrective action, if needed.
  • Access to the most advanced LOP platform in the world: Built on Salesforce, every gain servicing customer gets the advantages of the most advanced LOP servicing platform in the world.
  • Better attorney relationships and referrals: Attorneys prefer when providers use gain servicing because of the automated process, time savings and efficiency, yielding more referrals for the practice and thus revenue and earning opportunity.
  • Actionable business intelligence: Full reporting and analytics provide direct insight into how LOPs are performing and enable a better understanding of the overall revenue generated from LOPs.
  • Referral source analysis: gain servicing’s platform tracks every LOP from every referral source. This provides powerful insights into how each referral source reimburses LOPs over time and allows comparison across all referral sources.
  • System agnostic plug-in optionality: Providers who use gain servicing can continue using their existing practice management software while still gaining critical access to gain servicing’s LOP processing capabilities. Gain servicing has experience working with a variety of systems, including AdvancedMD, Allscripts, Athena Health, Azalea Health, Carecloud, Cerner, eClinicalWorks, eMDs, EMA Dermatology (Modernizing Medicine), OmniMD, Practice Expert and many others.
  • Private label options: Gain servicing offers private label options where all communications are performed under the provider’s name. The default option is: “Gain servicing on behalf of [Provider Name].”

Gain servicing provides servicing to both independent and private equity-backed healthcare practices. Private equity investors rarely want to tell providers how to manage their practice. Instead, they want to support business growth and profitability while enabling providers to do what they do best, provide quality care. Gain servicing enables the predictable cash flow, business intelligence and reporting capabilities both providers and private equity investors both enjoy.

How to Increase Cash Flow from Letters of Protection – cont’d

By | Blog

How to Increase Cash Flow from Letters of Protection

Physicians and medical practice executives can find it difficult to manage cash flow, especially amidst the ongoing concerns surrounding COVID-19 and as elective surgeries and other lucrative procedures continue to be put on hold. Cash flow difficulties compound when medical services are provided to personal injury patients on a Letter of Protection (LOP) – when payment from settlement can take years to receive.

Many practices attempt to handle LOP account balances in-house but LOPs are challenging for staff as practice management systems are not equipped to handle the complexities surrounding LOPs, including necessary and proactive follow-up measures with attorneys.

The downside, of course, is that cash flow takes a hit when LOPs are not managed properly and go unpaid. Since an LOP states that you, the medical provider, are agreeing to await payment from future settlements awarded to the patient/attorney, you can expect anywhere from six months to seven years before the practice realizes this revenue. Also, at the time of payment there may be reduction requests if the financial outcome of the legal case was not as expected. This can pose a serious risk to your payment. In response, some medical offices retain a paralegal or develop an underwriting department to screen the personal injury cases prior to seeing patients, all of which can be time consuming, costly and still result in unpaid LOP account balances.

 

LOP Financing Options: Third-Party, Inhouse, Gain Servicing

Many practices sell their LOP account balances at a discount to lien financing, or medical funding, companies. This provides the practice with immediate cash flow and offloads the work of tracking, managing and collecting on LOPs – but it comes with a tradeoff. Not only does the practice give up control of the process but having a third-party manage your LOP accounts receivables (AR) can come at a severe cut in profit depending on the bid amount of the financing company on your AR balances.

But, if managed inhouse, medical providers lack options to increase revenue and decrease time between service and payment for personal injury treatments.

A viable alternative is to consider a data-driven financing partner, like Gain Servicing. Our technology platform is backed by artificial intelligence and data from thousands of personal injury cases – intelligence we are able to pass along to our medical partners, resulting in fewer write-offs and more paid-in-full LOP balances.

Additional, unique benefits of Gain Servicing:

  • Automated LOP tracking – no more manual processes or workarounds
  • Optimized revenues – our AI-powered platform enables us to compare balances and case data points to help you get a better return
  • Business intelligence – detailed reporting and analytics show you how well our system is doing for you
  • Referral source analysis – know exactly how patients are choosing your practice through the identification and tagging of attorney referrals
  • White label options – our team can act as badged resources for your practice while collecting on LOPs, creating a consistent patient and attorney experience with your practice

In the Gain Servicing model, you benefit from our tools and technology, experience, expertise and optimization of LOPs without the risk you had previously been assuming by treating personal injury patients on LOPs and not having the right systems, processes, procedures and people in place.

 

A Newfound, Viable Source of Revenue: LOPs

With a financing partner like Gain Servicing, practices can open their doors even wider to personal injury and workers’ compensation patients.

Marketing for these ‘types’ of patients is relatively simple. Begin first by letting physicians know that they can bring their personal injury and workers’ compensation patients who are uninsured or underinsured to your facility. Many orthopedic surgeons and pain management physicians are already treating or being approached by attorneys to treat these injured patients. You can also notify your local personal injury attorney offices or local litigation groups who legally represent potential patients of your willingness to accept their clients on a lien or LOP.

 

In Closing

Communication with patients and attorneys is an ongoing requirement when dealing with LOPs; otherwise, it is possible they may settle the case without paying your medical bill. A technology-driven, experienced financing company, like Gain Servicing, takes on the role of an entire collections department while additionally providing LOP-specific tools, expertise and processes. Namely, LOP receivables do accumulate and age well beyond 120 days, and if not working with a medical-legal funding company, like Gain Servicing, you will need to allocate valuable resources to keep up to date and track your LOP accounts.

When evaluating alternatives to expand your reimbursement portfolio, accepting personal injury and workers’ compensation patients on LOPs is a sound business decision and requires minimal investment to significantly increase patient volume. You can reasonably expect that by opening communication with local attorneys, you will see consistent patient referrals – especially if you partner with an expert like Gain Servicing and have an efficient process surrounding LOPs.

If your practice has already been treating patients on LOPs and you need to increase your cash flow now, seek an experienced partner to monetize that patient volume through lien purchasing or servicing. Gain Servicing has several different options available, and we can customize a solution that will result in the greatest return on investment for your practice.

 

More About Gain Servicing

Gain Servicing specializes in the financing and servicing of personal injury and workers’ compensation patient receivables.

Gain Servicing is a wholly owned subsidiary of Cherokee Legal Holdings, a medical-legal funding company headquartered in Atlanta, Georgia. For over 10 years, we have financed existing third-party liability accounts from patient care that has been provided at healthcare facilities and medical practices across the U.S. We provide the underwriting and up-front screening, as well as process the paperwork and conduct the necessary follow-ups with attorneys after procedures are complete. We pay medical providers for their patient care, assuming the risk while providing immediate cash flow to the practice. Our goal is to increase healthcare organizations’ cash flow now while seamlessly allowing providers to do what they do best – provide care to those in need.

Gain Servicing is the go-to solution for medical practices providing quality care to the injured, underinsured and uninsured.

Cherokee Legal Holdings Hires Jonathan Razza as Vice President of Platform Innovation & Architecture

By | Press Releases

In Its Commitment to Technology, Cherokee Legal Holdings Creates New Position, Hires Product Management Expert

April 8, 2021 – Atlanta – Today, Cherokee Legal Holdings (“Cherokee”), a full-service direct legal and medical services company, providing financial assistance for plaintiffs, payment for medical care and the servicing of third-party, torte action receivables for medical providers, announced the hiring of Jonathan Razza as Vice President of Platform Innovation & Architecture. Jonathan started with Cherokee in March.

Cherokee has built a best-in-class technology platform with core competencies designed specifically to effectively service and manage tens of thousands of third-party liability liens simultaneously. Packaged as a platform and set of proprietary processes called “lien servicing” for healthcare providers, Cherokee’s lien servicing tool and capabilities has proven to deliver superior financial returns at a substantially lower cost than traditional in-house solutions.

“We are a technology-centric, data-driven company; we were in need of someone like Jonathan to take our platform, and services, to the next level,” said Cherokee CEO, Reid Zeising. “Jonathan’s extensive background in product management coupled with his experience in similar high growth, fast-paced environments like ours make him an excellent match for our organization. We are thrilled to have him on board.”

Prior to joining Cherokee, Jonathan was the Vice President of Emerging Technologies for Liaison, now OpenText, a data integration company. While leading the Liaison portfolio of products, Jonathan played a key role in the merger with OpenText. As the Senior Director of Product Management for OpenText, Jonathan was most recently responsible for global product strategy and the product roadmap for Trading Grid, the world’s no.1 integration managed services platform handling over 26 billion transactions and over $9 trillion in commerce per year.

For Cherokee, Jonathan will be responsible for defining strategic priorities and product vision. He will lead the internal development teams and execute product proof of concept ideas while assessing third party solutions for future product roadmaps.

Cherokee recently announced the launch of Gain Servicing (www.gainservicing.com), a SaaS-based, AI-enhanced third-party servicing platform. As Vice President of Platform Innovation & Architecture, Jonathan’s primary focus will be on driving excellence in product and platform strategy and execution.

About Cherokee Legal Holdings

Cherokee Legal Holdings (“Cherokee”), parent company of Cherokee Funding and Gain Servicing, is the fastest growing legal funding and medical lien servicing company in the United States. Cherokee has built a best-in-class technology platform with core competencies designed specifically to effectively service and manage tens of thousands of third-party liability liens simultaneously – this has proven to be much more effective than if a provider were to manage any volume of liens in-house.

More about our companies:

  • Cherokee Funding (cherokeefunding.com) provides monetary advances for personal injury victims to pay for their life needs and medical procedures while they await fair settlements.
  • Designed for healthcare providers, Gain Servicing (gainservicing.com) is built on a SaaS based, AI-enhance lien servicing platform and provides revenue cycle management (RCM), financial, underwriting, risk management, settlement, collections and reporting services to healthcare providers who treat personal injury victims.

Fundamentally, Cherokee believes that uninsured and underinsured patients who have suffered injuries in an accident, through no fault of their own, should have access to the same high-quality medical care as insured victims. In addition to Cherokee Funding and Gain Servicing, Cherokee has established a non-profit organization built around personal injury victim access to medical care. Stay tuned for more details, www.allpatientaccess.com.

Cherokee Legal Holdings Positioned for Growth, Hires Michael Byman as Vice President of Sales and Marketing

By | Press Releases

Cherokee Legal Holdings’ 5-Year Compound Annual Growth Rate Exceeds 50 Percent, Hires Vice President of Sales and Marketing to Lead the Company Through the Next Phase of Growth

March 31, 2021 – Atlanta – Today, Cherokee Legal Holdings (“Cherokee”), a full-service direct legal and medical services company, providing financial assistance for plaintiffs, payment for medical care and the servicing of third-party, torte action receivables for medical providers, announced the hiring of Michael Byman as Vice President of Sales and Marketing. Michael began with Cherokee at the beginning of the year.

“Michael’s extensive experience in the healthcare space combined with his focus on customer service and his competitive edge from being both a collegiate and professional athlete fits perfectly with Cherokee’s growth initiatives. We are here to change the healthcare and legal playing fields to the benefit of providers, attorneys and patients and he is the ideal leader for these goals,” said Cherokee CEO, Reid Zeising. “Michael has proven to be successful at every stage in his career and this latest challenge is one that he is ideally suited for.”

Prior to joining Cherokee, Michael worked as Regional Vice President for Jackson Physician Search, a Jackson Healthcare Company, where his region experienced 180 percent growth under his leadership, making it number one in region (2016-2020) for both growth and revenue. Additionally, Michael worked for Merritt Hawkins, part of AMN Healthcare, as Director of Business Development and Marketing, Smart-Tek as Divisional Vice President – Healthcare, and CompuPay Inc. as District Sales Manager.

The announcement of Michael comes as part of a series of promotions and new hires as Cherokee prepares for the next stage of company growth. Cherokee also recently announced the launch of Gain Servicing (www.gainservicing.com), a SaaS-based, AI-enhanced third-party servicing platform.

About Cherokee Legal Holdings

Cherokee Legal Holdings (“Cherokee”), parent company of Cherokee Funding and Gain Servicing, is the fastest growing legal funding and medical lien servicing company in the United States. Cherokee has built a best-in-class technology platform with core competencies designed specifically to effectively service and manage tens of thousands of third-party liability liens simultaneously – this has proven to be much more effective than if a provider were to manage any volume of liens in-house.

More about our companies:

  • Cherokee Funding (cherokeefunding.com) provides monetary advances for personal injury victims to pay for their life needs and medical procedures while they await fair settlements.
  • Designed for healthcare providers, Gain Servicing (gainservicing.com) is built on a SaaS based, AI-enhance lien servicing platform and provides revenue cycle management (RCM), financial, underwriting, risk management, settlement, collections and reporting services to healthcare providers who treat personal injury victims.

Fundamentally, Cherokee believes that uninsured and underinsured patients who have suffered injuries in an accident, through no fault of their own, should have access to the same high-quality medical care as insured victims. In addition to Cherokee Funding and Gain Servicing, Cherokee has established a non-profit organization built around personal injury victim access to medical care. Stay tuned for more details, www.allpatientaccess.com.

Danika Ransom Promoted to Senior Director of Operations, Richard Harrison Promoted to Director of Corporate Development & Finance

By | Press Releases

Cherokee Legal Holdings Announces the Promotion of Two Senior Team Members, Makes Two Additional Hires as Part of Company Growth Plan

March 22, 2021 – Atlanta – Today, Cherokee Legal Holdings (“Cherokee”), a full-service direct legal and medical services company, providing financial assistance for plaintiffs, payment for medical care and the servicing of third-party, torte action receivables for medical providers, announced the promotion of two senior team members.

Danika Ransom was promoted to Senior Director of Operations. Starting with Cherokee in June 2016 as a Case Manager, Danika has held multiple roles, including most recently overseeing both case management and risk management. In her new role, Danika will oversee underwriting, case management and risk management, as well as lead the development and roll out of Cherokee’s healthcare provider and law firm portals. In tandem with her promotion, Danika has hired Director of Operations, Paul Palladino.

Additionally, Richard Harrison has been promoted to Director of Corporate Development & Finance.  Richard began his career with Cherokee as Manager of Financial Planning & Analysis. His curiosity, talents and thirst for knowledge led him to take on additional challenges including deal origination, merger and acquisition activity and systems development. Richard has also been actively involved in Cherokee’s artificial intelligence initiative. In his new role, Richard will lead corporate development efforts in addition to the Cherokee finance department. With his promotion, Richard has hired Matthew Winstead as Senior Corporate Development and Financial Analyst.

“These are the first of many organizational announcements to come as we prepare for the next stage of our growth,” said Cherokee CEO Reid Zeising. “We are proud to promote from within, especially individuals like Danika and Richard who are representative of the ‘can do’ attitude that exemplifies our commitment to employees, customers and partners. Our objective is to ensure that we have the best workflow possible in order to create the best user experience for our customers, and to make our process as smooth and efficient as possible. Coupled with the latest cutting-edge technology employed across our portfolio, individuals like Danika and Richard make that possible.”

The announcement of Danika and Richard comes as part of a series of promotions and new hires. Cherokee also recently announced the launch of Gain Servicing, a SaaS-based, AI-enhanced third-party servicing platform.

About Cherokee Legal Holdings

Cherokee Legal Holdings (“Cherokee”), parent company of Cherokee Funding and Gain Servicing, is the fastest growing legal funding and medical lien servicing company in the United States. Cherokee has built a best-in-class technology platform with core competencies designed specifically to effectively service and manage tens of thousands of third-party liability liens simultaneously – this has proven to be much more effective than if a provider were to manage any volume of liens in-house.

More about our companies:

  • Cherokee Funding (cherokeefunding.com) provides monetary advances for personal injury victims to pay for their life needs and medical procedures while they await fair settlements.
  • Designed for healthcare providers, Gain Servicing (gainservicing.com) is built on a SaaS based, AI-enhance lien servicing platform and provides revenue cycle management (RCM), financial, underwriting, risk management, settlement, collections and reporting services to healthcare providers who treat personal injury victims.

Fundamentally, Cherokee believes that uninsured and underinsured patients who have suffered injuries in an accident, through no fault of their own, should have access to the same high-quality medical care as insured victims. In addition to Cherokee Funding and Gain Servicing, Cherokee has established a non-profit organization built around personal injury victim access to medical care. Stay tuned for more details, www.allpatientaccess.com.

How to Increase Cash Flow from Letters of Protection

By | Blog

For many healthcare organizations, managing cash flow is a regular challenge. While insurance carriers demand more and reimburse less, the time between date of treatment to when a carrier issues payment continues to increase. This time lapse adds to the difficulty of managing cash flow – and this, of course, is just speaking to the cases where patients have insurance AND have met their deductible.

Cash flow challenges increase substantially for practices that treat uninsured and underinsured personal injury patients on liens or Letters of Protection (LOPs).   The payments awarded in these cases can take anywhere from six months to seven years, and there is no way to predict when settlements will occur and when payment will be issued. Thus, LOP account receivables (AR) build up over time as do delays in payment. Most practice management systems are not set up to handle these types of claims with relative ease.

Furthermore, when LOP account balances are paid, the vast majority are not paid in full.  Almost all payments come with reduction requests.  Not only do healthcare practices not have comparative data to understand what reduction amounts are equitable, but most do not have an attorney or paralegal on staff to assess reductions or underwrite cases prior to seeing personal injury patients.

When personal injury patients are treated on LOPs, ongoing communication with attorneys is required to avoid instances where cases settle without the practice being reimbursed.  Properly tracking cases requires a significant amount of time and resources from practice staff.

Adding to this challenge is the fact that most practice management systems do not provide even the most basic tools for revenue cycle staff to manage LOP account balances. These systems are built to help providers submit electronic claims to payers like Medicare and Blue Cross, where electronic payment is received shortly thereafter. The fields, workflow, error handling and reporting capabilities do not account for the nuances of LOPs.  This leads staff to create manual workarounds that are labor intensive, not to mention prone to error.

Partnering with an LOP Financing Company

Many practices who treat on LOPs will periodically sell their LOP AR to third-party lien financing companies, also referred to as medical funding companies. This approach has two primary advantages. First, practices are paid promptly and can maintain more stable cashflow predictions.  Second, medical practices are able to avoid all of the work that goes into managing each balance for the months or years it takes for these cases to settle and for payment to be received.

Choosing an LOP Financing Company

LOP financing is a viable and attractive option, but medical providers should be selective when choosing which LOP financing company to work with. All LOP financing companies are the same in that they offer your practice cash for LOP AR; the business terms and services, however, vary greatly. There are obvious factors to consider, like cost and reputation and some less obvious criteria, like the technology platform and internal efficiency of the financing company.  There are many LOP financing companies, but few that are established, well capitalized, and expertly managed.

We recommend using a simple decision matrix, an example of which is provided below. A comparative matrix like this allows you to cross-reference companies and rank them to ensure you select the best fit for your practice. For subjective criteria, like reputation, we suggest using a 1-10 scale to help rank each company.

What terms are they offering?
How quickly will you receive funds?
How long has the company been in business?
Do they know your geographic market?
Are you confident in their servicing and collection methods?
What is their competitive advantage?

Do not underestimate the value of an LOP financing company’s competitive advantage. Gain Servicing, for instance, has an AI-powered platform that creates efficiencies for the healthcare practices that have chosen to partner with us. Take the time to ask prospective financing companies about their current capabilities and services as well as their future plans. In essence, they will be serving as an extension of your business, or, at the very least, an extension of your AR team, so make sure you land on a financing partner that you can see yourself working well with and that will deliver the most value to your practice.

About Gain Servicing

Gain Servicing specializes in the servicing and financing of personal injury patient receivables. Gain Servicing experts handle day-to-day, transactional accounts receivables functions on behalf of medical practices while office staff and providers focus on delivering exceptional care and services to patients.

Gain Servicing’s technology platform is powered by artificial intelligence and is built to track, manage and optimize returns from Letter of Protection (LOP) account balances. Gain Servicing’s financial solutions can provide immediate cash flow and the highest returns on a healthcare practice’s assets. Gain Servicing’s solutions are proven to provide higher returns, at a lower cost, than in-house or other third party LOP financing options.

Lien Management Best Practices

By | Blog

A personal injury lien is a legal right to receive a portion of the plaintiff’s settlement, typically to reimburse third parties for services rendered. Lienholders can include the state and federal government, health insurance companies, medical providers and third-party medical funding companies, like Gain Servicing.

In a single personal injury case, there may be multiple lienholders. Health insurance companies, for example, may issue a lien against the at-fault party to recover any money they spend on treatment as a result of an accident. This is known as subrogation, or the substitution of one person or group by another in respect to a debt or insurance claim, accompanied by the transfer of any associated rights and duties. Insurance providers with subrogation claims can seek repayment from plaintiffs’ settlements; although, it is important to note, some states prohibit subrogation clauses altogether in health insurance policies. Medical providers who provide medical treatment may also issue a lien on a case and provide services under a letter of protection (LOP), which states that the balance of all unpaid medical bills will be paid upon resolution of the personal injury case.

In short, any group, organization or entity that provides services on contingency to a plaintiff, no matter what they are, can become a lienholder in that plaintiff’s case.

Lien Confirmation

Because there can be so many lienholders in an individual case, it is important for lienholders to confirm their lien agreements with the plaintiff’s attorney. Even after a lien agreement has been signed and put “on file,” which means something different for every firm, it is important for lienholders to confirm their liens and to follow-up on the case regularly. Because personal injury cases can take months or years to settle, proactive and diligent lien management is critical. Not only can there be dozens of lienholders in any one case, any one plaintiff attorney can be working on a number of personal injury cases.  And, despite digital transformation efforts within the industry, oftentimes, plaintiff attorneys are still relying on paper filing, verbal conversations and outdated computer systems. Ultimately, it is up to the lienholder to follow-up on what they are owed.  Often, a case may settle without all lienholders being properly informed of the settlement.

In brief, here is how lien confirmation works:

  1. The lienholder confirms the attorney is a reliable escrow agent and that there is a legal agreement in place for the lien.
  2. Within a few days or a week of services being provided, the lienholder confirms the following with the plaintiff’s attorney: the plaintiff’s name, the service provider’s name, the type of servicing (financing, surgery, etc.), the date services will be or have been provided, and that all of this information, i.e. the lien, is on the plaintiff’s file.

Confirming and tracking the status of a lien is essential to ensure proper recovery.  As a lienholder, it is a good idea to create a regular follow-up schedule and to be diligent about confirming the lien is still associated with the plaintiff’s file.  At Gain Servicing, we have developed an AI-powered platform to track and manage all LOPs and liens. Because a lien can be arranged before services are provided, the lien is not officially in place until it is executed on all sides. Meaning, service providers can obtain written acknowledgement of their liens ahead of services being provided, whether that be medical services or funding to plaintiffs, but they do not technically have a lien until services are actually provided. It is not uncommon for plaintiffs – or service providers – to change their minds or alter provisions of the services after a lien agreement has been verbally discussed, which is why confirmation and follow-up after the fact is necessary. A lien has been ‘fully executed’ when service has been provided, for example the plaintiff has received treatment or has been advanced money.

Confirmation by phone and/or email can be simple – examples are included below. Note: When calling an attorney’s office, be sure to note the date, time and who you spoke with.

Hi, this is [Name] from [Company/Service Provider] confirming that [Plaintiff Name] received [Service – Treatment or Funding] from [Company/Service Provider] following his/her accident on [Date of Loss]. Has this been notated as a lien on [Plaintiff Name]’s file?

Following a verbal confirmation, it is always a good idea to then send an email. You can let whoever you spoke with know that you will be following up with an email to the appropriate case manager, paralegal or attorney so that you and they have record of the conversation. Print records are paramount.

Hi [Case Manager/Paralegal/Attorney],
We provided [Plaintiff Name] with [Service – Treatment or Funding] on [Date of Service]. Attached are the [Medical Bill or Financing Agreement] and signed lien agreement for your records.
Please reply to this email confirming that you have our lien on file.

Additionally, you can add a ‘Read Receipt’ to the email you send, as well as send a confirmation by certified mail.

It may sound excessive, but effective lien management is an essential part of the personal injury case process. Best practices are not complicated, and diligence and good communication go a long way.

The Opportunity with Letters of Protection for Medical Providers

By | Blog

In our experience, doctors wish to provide high quality medical care to as many patients as possible.  Worrying about contracts, reimbursement rates and collections from a variety of payor sources is not the reason most doctors went to medical school, yet the revenue cycle management side of the business is essential to operating a successful practice.

Most revenue cycle management companies are good at contracting with a variety of payor sources and collecting patient payables but for patients who have been injured in an accident – through no fault of their own – and who do not have adequate healthcare coverage but who need medical attention, these bills are more complex but can be collected through letters of protection (LOP) utilizing third party servicing platforms like gainservicing.com.

For doctors providing care to personal injury victims, LOPs are an alternate option of payment.  Seeing patients regardless of payor source is an honorable pursuit.   LOPs are signed by both the patient and attorney representing the patient at the time of treatment. They simply state that upon resolution of the personal injury case, the balance of the medical bill(s) will be paid through the attorney escrow account when the case is resolved. 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 healthcare practices providing the care.

The Key Issues Medical Providers Face with Letters of Protection – And their Solutions

In today’s environment, LOPs are managed by medical providers, law firms or sold outright to medical funding companies, like Cherokee Medical Funding but this is not the wave of the future.  Insurance defense and various state legislatures are increasingly scrutinizing the traditional sale of medical receivables passing legislature prohibiting or seriously limiting this option. Gain Servicing is the future of medical lien servicing for uninsured and underinsured patients in need of medical care.  Gain provides an independent, SaaS based, AI enhanced, third party servicing platform to separate medical providers from the potential for conflict of interest, biased medical opinions and financial interest in the outcome of the case while servicing these receivables rather than purchasing them.  This allows for patients to receive needed medical care without the undo pressure that a traditional medical funding can put on the case settlement.  By servicing them on behalf of medical providers. Gain also provides a variety of financial solutions that maintain the doctor’s independence.

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 tactics include:

  • 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 for communication 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 analysis. 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 due dates.
  • Solution: gain servicing has designed proprietary software to automate and optimize the tracking of personal injury lawsuits tied to LOPs. Capabilities include notice of service, all needed filings, automated case updates, automated LOP tracking, referral source analysis, revenue optimization, reporting and analytics, and additional business intelligence to provide real-time status updates.

Communication:

  • Challenge: For medical providers, rather than having a single point of contact or payor source, personal injury patients require complex communications with case managers, paralegals, the patient, attorneys and third-party liability carriers.  The management of these communications alone is not easy and is not readily available in current RCM, EMR or Billing Systems.  Failure in these areas leads to higher charge-offs.
  • Solution: It is essential for holders of LOPs to be in constant communication with attorneys, paralegals, and case managers to obtain underwriting information, assess case characteristics, 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: Insurance defense attorneys are attacking medical providers who hold LOPs and communicate with attorneys to attempt to show biased though the discovery of case communication between attorneys and doctors, the exchange of case estimates, policy limits and more. They often claim charges are excessive and that professional opinions are biased. This also leads to high costs for medical providers due to legal responses, objections, discovery and longer depositions. Medical providers, PMS and RCM platforms are not equipped to object to discovery requests or segment any of this information to avoid these potential objections.
  • 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: Various legislatures have attempted to eliminate traditional medical funding in order to then force healthcare providers to hold liens and then have insurance defense attorneys attempt to show the bias outlined above.
  • 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), accessforpatients.org, a best practices organization committed to maintaining access to quality medical care for all patients regardless of payor source. Lien Servicing is the future and gain is the industry leader.

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.

In summary, LOPs serve a critical need for personal injury victims. They are traditionally serviced in-house by a medical provider, through a law firm, or sold to a medical funding company. Each of these options are outdated, similar to the situation Kodak and Polaroid faced when they knew that digital film was coming but they chose not to cannibalize their own businesses and instead went bankrupt.  At gain servicing, we see the future and are willing to cannibalize our own business for the benefit of patients, doctors and the legal community. 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. 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 solutions.

Inc. Magazine Unveils 2020 Inc. 5000, Cherokee Legal Holdings Named One of America’s Fastest-Growing Private Companies

By | Blog, Press Releases

Cherokee Legal Holdings Ranked No. 3009 on the 2020 Inc. 5000 with Three-Year Sales Growth of 131%

Atlanta – August 17, 2020 – Inc. Magazine has ranked Cherokee Legal Holdings (“Cherokee”), a full-service direct legal and medical services company, providing financial assistance for plaintiffs, payment for medical care and the servicing of third-party, torte action receivables for medical providers, number 3009 on the 2020 Inc. 5000 list, an exclusive ranking of the nation’s fastest-growing private companies.

This is Cherokee’s first year applying for and making the Inc. 5000 list.

“Given the outbreak of COVID-19, this year has proven especially challenging for businesses around the country and around the world,” said Cherokee CEO Reid Zeising. “Commemorating where we are with a spot on the Inc. 5000 is monumental, and it gives us hope and motivation to continue fighting for what our company was built on – equality and justice for all. With the pandemic, our revenue cycle management and services to healthcare providers along with financial assistance to plaintiffs have proven invaluable as providers search for ways to optimize operating efficiencies and plaintiff needs expand. As a result, we have seen an acceleration in what were already tremendous growth rates.”

Inc. is reporting that not only have the companies on the 2020 Inc. 5000 been very competitive within their markets, but the list as a whole shows staggering growth compared with prior lists as well. The 2020 Inc. 5000 achieved an incredible three-year average growth of over 500 percent, and a median rate of 165 percent. The Inc. 5000’s aggregate revenue was $209 billion in 2019, accounting for over 1 million jobs over the past three years.

Complete results of the Inc. 5000, including company profiles and an interactive database that can be sorted by industry, region, and other criteria, can be found at www.inc.com/inc5000. The top 500 companies are also being featured in the September issue of Inc., available on newsstands August 12. Cherokee’s profile can be viewed at www.inc.com/profile/cherokee-legal-holdings.

“The companies on this year’s Inc. 5000 come from nearly every realm of business,” says Inc. editor-in-chief Scott Omelianuk. “From health and software to media and hospitality, the 2020 list proves that no matter the sector, incredible growth is based on the foundations of tenacity and opportunism.”

The annual Inc. 5000 event honoring the companies on the list will be held virtually October 23-27, 2020.

“Growing well over 100 percent would have never been possible with the tremendous efforts of the Cherokee team,” said Zeising. “This recognition is for them.”