Christine Jordan Sexton - February 13, 2023
'If you ask me what is the most important thing you can do on civil justice or lawsuit abuse, it’s solving this issue.'
Now that the long-running lobbying over AOB (assignment of benefits) has been resolved, business interests are targeting another thorny issue with an acronym they want tackled: LOP.
A letter of protection (LOP) is a letter sent to a medical professional by a plaintiff’s attorney representing the patient. LOPs guarantee the provider payment for medical treatment from a future lawsuit settlement or verdict award. Therefore, if the patient is insured, providers don’t bill the insurers Medicare or Medicaid.
“If you ask me what is the most important thing you can do on civil justice or lawsuit abuse it’s solving this issue,” Florida Justice Reform Institute President William Large said at the Associated Industries of Florida Florida Business Forum event in Tallahassee.
Large said letters of protection enable plaintiff attorneys to inflate the value of past medical bills and, moreover, allow plaintiffs to “get around” the set-off rule.
Large hypothesizes the use of LOPs artificially inflates the costs of settlements by four times the amount.
Because the providers are going outside the insurance system, the costs of care are higher.
The higher the costs of past care, the higher the costs of future care, and the higher the amount of pain and suffering juries are willing to award. Large said his analysis shows lawsuits with past medical costs of $90,000 or more can yield big verdict returns.
“There’s a real incentive to increase the past medicals,” Large told the crowd.
Additionally, the use of an LOP allows plaintiff attorneys to circumvent the “set-off rule” which allows the amount paid by the insurer and accepted by the health care providers to be deducted from past medical bills.
Because the medical bills are outstanding and payment has been made, there is no set off.
LOPs, Large said, increase costs by “five or sixfold” every time they are used.
Florida Trucking Association President & CEO Alix Miller said LOPs are a reason the 10 insurance carriers for the trucking industry have been driven out of the market. Many trucking companies have seen their insurance rates double and their coverage reduced by half.
She said the trucking companies, many of which she called mom-and-pop businesses, earn 6 cents on the dollar, and “have no choice but to cover our legal expenses of frivolous lawsuits onto the movement of goods.”
Miller said FTA estimates that the tort tax translates up to $5,000 annually.
LOPs have been a priority issue for the business community over the last several years with Publix throwing its weight behind changes.