The Opportunity with Letters of Protection for Medical Providers

By January 28, 2021Blog

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.