How orthopedic surgery is funded via Letter of Protection in Florida after the 2023 tort reform.
The 2023 Florida tort reform statute, §768.0427, fundamentally reshaped how orthopedic surgical bills are presented and defended in PI litigation. For uninsured patients treated under Letter of Protection, the admissible evidentiary value of unpaid medical bills is now capped at 120% of Medicare rates. Attorneys and orthopedic providers who understand this structure can still build strong cases; those who do not are underpricing surgery or overexposing the evidentiary value of their fees.
What §768.0427 actually changed for orthopedic LOP cases.
Before July 1, 2023, the standard practice in Florida PI orthopedic cases was for providers to bill their full customary and usual charges under LOP agreements. Plaintiffs could present these charges as economic damages at trial, and defendants were limited in how aggressively they could contest the reasonableness of unpaid LOP bills. The Supreme Court decisions in Dial v. Calusa Palms (2021) and the subsequent legislative response in §768.0427 changed this framework significantly for uninsured patients.
Under §768.0427, for a claimant who received medical treatment under a LOP agreement and who was uninsured at the time of treatment, the admissible evidence of medical damages at trial is limited to the amount actually paid or the amount that would have been paid had the claimant had insurance. The statute operationalizes this as the greater of: (1) 120% of Medicare rates, (2) 170% of state Medicaid rates, or (3) any negotiated rate between the provider and insurer. In practice, for most orthopedic procedures, 120% of Medicare sets the ceiling.
The practical consequence is that an orthopedic surgeon who bills $15,000 for ACL reconstruction under LOP can only present approximately $8,500-$11,000 as admissible evidence of medical damages for an uninsured patient if the case goes to trial. This does not mean the LOP agreement is unenforceable; the surgeon's right to collect the full contracted amount from the settlement is not directly limited by §768.0427. What the statute limits is the evidentiary presentation at trial, which drives settlement negotiations.
Insured patients are treated differently. If the patient has health insurance (including Medicare, Medicaid, or a private policy), the applicable contracted rate governs, and §768.0427's specific 120% Medicare benchmark does not apply in the same way. This creates a bifurcated evidentiary landscape in Florida PI: insured patients' medical bills are presented at the contracted insurance rate, while uninsured LOP patients' bills are capped at 120% Medicare.
Orthopedic surgeons in Florida's PI market have adapted in several ways. Some have restructured their LOP fee schedules to be set at or near 120% Medicare from the outset, simplifying the evidentiary presentation. Others maintain higher customary rates with the understanding that settlements are negotiated below the full bill. Surgeons who participate in established PI networks tend to have clearer internal policies on LOP fee structures and produce more predictable economic damages presentations.
How LOP-funded orthopedic surgery moves through a Florida PI case.
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Pre-surgery
PIP exhaustion and LOP execution
Florida PIP ($10,000 with EMC certification) is applied first. Once PIP exhausts or is insufficient to cover diagnostic and surgical costs, the patient and attorney execute an LOP agreement with the orthopedic surgeon and surgical facility. The LOP assigns the provider a lien on the settlement proceeds.
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LOP execution
Fee schedule documentation
A well-structured LOP file documents the surgeon's customary and usual charges, the LOP contractual rate, and the facility's separately negotiated rate. Both the surgeon's professional fee and the ambulatory surgical center or hospital facility fee are subject to §768.0427's cap as separate evidentiary items.
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Surgery
Operative documentation for billing
The operative report, anesthesia record, implant invoices (for hardware or allograft), and pathology reports (when applicable) all become billing documentation. CPT coding must match the documented procedure. Upcoding or unbundling creates defense attack vectors on the medical bill.
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Post-op
Physical therapy LOP and global period billing
Orthopedic surgery CPT codes carry a 90-day global period during which routine post-op care is included in the surgical fee. Physical therapy during this window is billed separately by the PT provider. Attorneys should ensure a separate PT LOP is in place before surgery so post-op rehabilitation is covered.
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Settlement
Lien negotiation
At settlement, orthopedic surgeons typically negotiate a reduction from their LOP rate to facilitate settlement. The spread between the full LOP bill and the 120% Medicare cap is the negotiating range. Attorneys should understand both figures when evaluating the net-to-client of a proposed settlement.
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Trial (if necessary)
Evidentiary presentation under §768.0427
If the case proceeds to trial, the plaintiff's expert on medical damages presents the admissible figure (120% Medicare for uninsured LOP). The plaintiff's attorney should retain an orthopedic billing expert who can articulate why the 120% Medicare benchmark is a reasonable and necessary medical cost in the Florida market.
PIP, LOP, and the 120% Medicare benchmark in practice.
Understanding the Medicare benchmark requires knowing the actual rates. For ACL reconstruction (CPT 29888), the 2024 Medicare physician fee schedule allows approximately $1,100-$1,400 for the professional surgical fee depending on geographic adjustment. At 120%, that produces an admissible professional fee of approximately $1,320-$1,680. The facility fee is a separate calculation: for ambulatory surgical centers, the Medicare ASC rate for knee arthroscopy with ligament repair runs approximately $4,200-$5,800. At 120%, the ASC facility component produces $5,040-$6,960 as admissible evidence. Total admissible surgical case value at 120% Medicare for a typical ACL reconstruction runs $9,000-$15,000 for the operative episode alone, exclusive of diagnostic imaging, pre-op evaluation, and post-op PT.
For lumbar microdiscectomy (CPT 63030), the 2024 Medicare physician fee schedule produces approximately $1,300-$1,600 professionally, with an ASC facility rate of approximately $5,500-$7,200 at standard Medicare ASC. At 120%, the combined admissible surgical episode value runs $12,000-$18,000. Hospital outpatient facilities have different Medicare rates, generally higher, which can increase the admissible figure for patients treated at hospital-based surgical facilities.
Florida §627.736 PIP is unaffected by §768.0427. PIP is a first-party insurance benefit with its own reimbursement schedule (200% of Medicare Part B for services rendered in a physician's office, per the statute). LOP arrangements typically begin after PIP exhaustion. Attorneys should ensure PIP EMC certification is obtained within the 14-day window so the full $10,000 PIP benefit is applied before LOP begins, reducing the total LOP exposure and improving the client's net recovery.
Provider selection matters for LOP economics. Orthopedic surgeons in established PI networks have structured their LOP pricing, documentation standards, and lien negotiation practices around the post-§768.0427 environment. This benefits both the provider (predictable collections) and the attorney (cleaner evidentiary record and more predictable settlement economics). NPA's network includes orthopedic surgeons across all 10 Florida regions who operate with transparent LOP fee structures.
What attorneys need from an orthopedic LOP file.
The LOP agreement itself
The signed LOP agreement, including the fee schedule or rate provision, must be in the medical file. Post-§768.0427, the agreement should specify whether the contracted rate is at customary charges, at a Medicare-referenced rate, or at another benchmark. Ambiguous LOP language creates disputes at settlement and trial.
CPT codes and itemized billing
The final itemized bill with CPT codes, units, and facility versus professional fee split should be produced with the medical records. Attorneys need to calculate the 120% Medicare equivalent for each CPT line item to build the admissible damages figure. Billing without CPT codes cannot be mapped to Medicare rates.
Medical necessity documentation
Surgical authorization notes, pre-op consultation records, and the surgeon's documented decision rationale constitute the medical necessity record. Defense IMEs will challenge surgical necessity. The pre-op orthopedic note should document failed conservative care, objective imaging findings, and the clinical basis for the operative recommendation.
Causation linkage
The treating orthopedic surgeon's records must state within reasonable medical probability that the MVA caused or substantially contributed to the surgical condition. Without a causation opinion from the treating surgeon, defense experts can frame the surgical condition as pre-existing, substantially reducing the economic damages presentation.
Frequently asked questions.
Does §768.0427 eliminate the value of LOP orthopedic cases in Florida?
No. The statute limits the evidentiary presentation of unpaid LOP bills at trial for uninsured patients to 120% of Medicare rates. It does not cap non-economic damages (pain and suffering), lost wages, or future medical expenses. Cases with serious orthopedic injuries still carry significant settlement value; the statute changed how medical damages are presented, not the underlying compensability of the injury.
What is the difference between a surgeon's professional fee and the facility fee under LOP?
The surgeon's professional fee covers the physician's cognitive and technical work in the operating room. The facility fee covers the use of the operating room, nursing staff, equipment, disposables, implants, and recovery. Both are separate LOP agreements and separate billing line items. The 120% Medicare cap applies to each separately when calculating admissible damages.
Can an orthopedic surgeon still collect the full LOP amount at settlement?
The LOP contract is between the provider and the patient and is enforceable at the contracted rate. §768.0427 limits what can be admitted into evidence at trial, which affects settlement leverage. In practice, lien negotiations at settlement typically reduce provider collections below the full LOP rate regardless of the statute. The 120% Medicare figure serves as a floor for those negotiations rather than a ceiling on the surgeon's contractual right.
How does ambulatory surgical center billing compare to hospital billing for orthopedic PI cases?
ASC facility fees under Medicare are generally lower than hospital outpatient department rates for the same procedure. This means the 120% Medicare cap produces a lower admissible figure for cases performed at ASCs than for hospital cases. However, ASC cases typically involve lower total bills as well, and the net-to-client calculation may be more favorable when the LOP lien is smaller. Attorneys should analyze both settings when evaluating surgical case placement.
What Florida PIP rules apply before LOP starts?
Florida §627.736 PIP covers $2,500 without EMC certification and $10,000 with certification by an MD, DO, PA, or APRN within the 14-day window. PIP pays at 80% of covered charges, subject to the statute's own reimbursement limitations (200% of Medicare Part B for office services). PIP applies before LOP. If a patient has both PIP and health insurance, coordination of benefits rules determine payment order before LOP begins.
Should orthopedic surgeons structure LOP fees at exactly 120% Medicare?
It depends on the surgeon's practice model. Setting fees at exactly 120% Medicare simplifies the evidentiary presentation and signals transparency to plaintiff attorneys. Some surgeons maintain higher customary rates and negotiate down at settlement, preserving flexibility. Either approach can work if consistently documented. The key is that the fee schedule is established before treatment, in writing, and defensible as reasonable and necessary in the Florida market.
Does NPA help set LOP fee schedules for orthopedic surgeons?
No. NPA does not set provider fees, negotiate LOP terms, or intervene in billing. NPA makes introductions between attorneys and orthopedic surgeons whose practices are structured for PI litigation. The LOP agreement is a direct contractual arrangement between the attorney's client and the provider.
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