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When you hire a collection agency to recover money from your patients who have refused to fulfill their payment obligations, what is the first thing that you ask?
- How much will you charge?
- What is your recovery rate?
Although this may be important for you, this is not how you go about hiring a medical bill collection agency. Performing debt collection activity on medical and dental bills is drastically different. You do not collect the in the same way you do when trying to recover money from the debtors of a car dealer or a plumber.
First thing you ask is:
1. Is the Collection Agency HIPAA Compliant?
The Health Insurance Portability and Accountability Act (HIPAA) is designed to protect the privacy, confidentiality, and security of health information of your patients. The Privacy Rule permits covered entities to continue to use the services of debt collection agencies. You could be sharing personal data of your patients with your collection agency. This may include SSN, DOB and more. Do they have secure systems to protect your data?
The first thing you ask a Collection Agency is if they are HIPAA complainant and can they sign a HIPAA agreement with you.
No point in even talking to a collection agency that can potentially lose your patient's private data and make you vulnerable to the patient-initiated lawsuit against you.
2. Do you use intensive techniques or amicable techniques?
A collection agency that uses intensive techniques to recover money from your patients will destroy your reputation. A heavy-handed approach should never be used in medical collections. A collection agency for dental practices and medical offices should work with patients rather than work against them. If you pressurize your collection agency for higher recovery rates, that will push them to use intensive collection techniques.
Patients are already wary when a collection agency contacts them. They will try their best to pay off the bill. If they cannot pay all at once, they may very well agree to pay in installments.
If a patient is over-pressurized or threatened, they may sue you back. WHY? Because of the FDCPA. The Fair Debt Collection Practices Act (FDCPA) is the main federal law that governs debt collection practices. The FDCPA prohibits debt collection companies from using abusive, unfair or deceptive practices to collect debts from a debtor.
3. If your Collection Agency - Local or Nationally Licensed?
People move all the time. It is quite possible that after a patient has recently moved from California to Nevada. Or Texas to New York. A collection agency should be registered where the debtor currently resides. It is always better to hire a collection agency that can serve all your medical debts all over the USA.
4. Ok, now talk about Recovery Rate and their Cost
The cost of collection agencies does not vary too much, so that should come later. Regarding the recovery rate, ask them to provide some references of their existing clients. Check how much recovery rate you are getting now.
A medical collection agency or a dental collection agency is like your partner. Do let their Sales Representative explain all their services and give you a recommendation, but do not fall for whatever they say. The moment you ask them a few questions mentioned above, it will communicate that you are a mindful buyer.