Doctors are passionate about patients having access to proper treatment whether they have health insurance or not. As a result, many practices treat uninsured and underinsured personal injury patients on Letter of Protection (LOP). This a “win” for these patients because they get treatment they may not otherwise receive.
Meanwhile, treating patients on LOPs is financially hard on doctors. Doctors may have to wait months and years in hopes that they will get paid when the case settles.
There are several key reason for this:
1) The average personal injury lawsuit takes 11 months to settle
Doctors wait a LONG time to get paid on LOPs – 11 months on average and 2, 3 or 4 years in many cases
2) Tracking and managing LOPs is labor intensive
Practice management systems are not designed to track and manage LOPs. Most use spreadsheets as a workaround and rely manual updates. As a result, the staff spends a disproportionate amount of time trying to keep up with all the lawsuits that are tied to the LOPs.
3) No process to handle situations which lead to write-offs
It’s bad enough waiting 11+ months to get paid but most practices don’t get paid at all on 1 out of every 10 LOPs because they don’t have the systems in place to avoid circumstances they might not be paid.
4) No unbiased way to compare LOP reduction requests
Reduction requests are a huge component of treating on LOP. And, it isn’t always clear if, when or how much of a reduction to accept and why. Practices have no unbiased, comparative data to evaluate each reduction
Many practices don’t have systems in pace help them compare amounts repaid on LOPs across referral sources.