A letter of protection is an agreement between a plaintiff’s attorney and a medical provider under which the provider agrees to treat the plaintiff and defer payment until the case resolves, in exchange for a priority lien on any settlement or judgment proceeds. Georgia law recognizes LOPs as a legitimate financing mechanism for injured plaintiffs who lack insurance or resources to pay for treatment. Senate Bill 68 (signed April 21, 2025) substantially expanded the discovery and disclosure obligations surrounding LOPs. Under new O.C.G.A. section 51-12-12.1, the following information is now expressly “relevant and discoverable” in cases involving LOP treatment: the LOP agreement itself, an itemized list of the medical services provided with specific charges and billing codes, the name and dollar amount of any portion of the account receivable sold to a third party, and the identity of any individual who referred the plaintiff to the provider for treatment. This codified disclosure framework replaces the prior landscape where the extent of LOP-related discovery was actively litigated and inconsistently applied. For cases arising on or after April 21, 2025, the new rules apply; prior claims are governed by the earlier case law framework.
96.1. Is a letter of protection discoverable by the defense in Georgia personal injury litigation?
Yes, the existence and terms of a letter of protection are discoverable because they are relevant to the medical provider’s potential financial bias and the reasonableness of the charges. Defense attorneys routinely request production of all LOP agreements as part of standard written discovery. The LOP arrangement may also be explored during the deposition of the treating provider to establish the financial relationship between the provider and the plaintiff’s attorney and to challenge the independence of the provider’s treatment recommendations and billing.
96.2. How do Georgia courts evaluate defense arguments that LOP-based medical charges are inflated or unreliable?
Georgia courts allow defendants to present evidence challenging the reasonableness of LOP charges by comparing them to prevailing market rates, insurance reimbursement rates, Medicare fee schedules, and the charges of other providers for comparable services. Defense experts may testify that the LOP charges significantly exceed the amounts that would be accepted from insured patients for the same treatment. The jury evaluates the reasonableness of the charges in light of all evidence, and the existence of the LOP arrangement is one factor the jury considers when assessing whether the billed amounts reflect the true reasonable value of the care.
96.3. What is the legal relationship between the LOP, the treating provider, and the plaintiff’s attorney under Georgia law?
The LOP creates a contractual obligation between the attorney and the medical provider. The attorney agrees to protect the provider’s financial interest by paying the provider’s charges from settlement or judgment proceeds before distributing funds to the client. The provider agrees to treat the patient and defer billing until the case resolves. The patient benefits from access to medical treatment without upfront payment. The attorney’s obligation to the provider is separate from and in addition to the attorney’s fiduciary obligations to the client, which can create tension when the LOP charges consume a large portion of the settlement.
96.4. Can a Georgia medical provider enforce the letter of protection as a contract if the plaintiff recovers but the attorney does not disburse the funds?
The provider can enforce the LOP as a contractual obligation against the attorney who signed it. If the attorney fails to honor the LOP and disburses settlement funds without paying the provider, the attorney faces potential liability for breach of the agreement, professional discipline for mishandling settlement funds, and possible claims from the provider for the unpaid charges. The enforceability of the LOP depends on its specific terms, but Georgia courts generally treat LOPs as enforceable contracts between the attorney and the provider.
96.5. How does the existence of an LOP affect the admissibility of the provider’s charges as evidence of reasonable medical expenses in Georgia?
The existence of an LOP does not automatically render the provider’s charges inadmissible, but it opens the door to defense challenges regarding the reasonableness of the charges. The defendant can argue that LOP charges are not market rates because they are set in anticipation of litigation recovery rather than through arm’s-length transactions with insurers or self-paying patients. The jury weighs the LOP charges against the defendant’s evidence of lower market rates and determines the reasonable value of the medical services provided.
96.6. What ethical obligations does a Georgia plaintiff’s attorney have when negotiating the LOP amount with the treating provider at settlement?
The attorney must negotiate the LOP amount in the client’s best interest, ensuring that the charges are reasonable and that the client retains a meaningful portion of the settlement proceeds. The attorney cannot prioritize the provider’s interests over the client’s or agree to charges that consume a disproportionate share of the recovery. If the LOP charges are unreasonably high, the attorney has an obligation to negotiate a reduction. The attorney must also disclose the full LOP obligation to the client and explain how it affects the net settlement distribution.
96.7. How do Georgia courts treat the gap between LOP-billed charges and the amounts that health insurers would have paid for the same services?
This gap is one of the most actively contested damages issues in Georgia personal injury litigation. Defendants argue that the reasonable value of medical services is closer to the amounts that commercial insurers or government programs actually pay for the same treatment, not the inflated amounts billed under LOPs. Plaintiffs argue that the billed amount represents the cost of care actually provided and that the plaintiff is entitled to recover the full reasonable value. Courts allow evidence on both sides and leave the determination of reasonable value to the jury based on the totality of the evidence.
96.8. How does Georgia handle disclosure of LOP arrangements when the plaintiff is also claiming future medical expenses for ongoing treatment under the same agreement?
When the plaintiff claims both past medical expenses under the LOP and future medical expenses from the same provider or a similar arrangement, the defense can use the LOP relationship to challenge the reasonableness of both past and projected future costs. The defense argues that the future expense projections based on LOP rates overstate the actual cost of future care because the rates are not market rates. The plaintiff must establish that the projected future costs are reasonable regardless of the LOP arrangement by presenting evidence of the actual market cost of the anticipated treatment.
Disclaimer: This content is provided for informational and educational purposes only and does not constitute legal advice. No attorney-client relationship is formed by reading this material. Georgia law is subject to change through new legislation and court decisions. Always consult a qualified Georgia attorney for advice specific to your situation.