As dentists and their teams collect past due balances and clean up their accounts receivable, the following FAQ addresses the most common questions CDA receives regarding the use of collection agency services.

Q: Does CDA endorse any collection agencies?

A: No, while collection agencies play a role in helping secure past due debts, it is important for businesses to view them as a final effort to collect unpaid patient balances rather than part of  day-to-day business management. In many cases, the collection agencies are not as empathetic as your front office staff and can lead to broken trust, lost patients and poor online reviews. Often, we hear from members that the number of past due balances actually collected is limited and a large portion of those balances go to the collection agency as payment for their services. There are some local components that do endorse collections agencies so if you are looking for an agency, your local component may be a resource for you.

Q: How can I minimize the need to utilize a collection agency?

A: Have a strong financial policy in place that lays out when to notify patients of pending balances, what forms of payment you accept, whether you make payment arrangements (or not) and your collections process. Even with the best processes in place, some delinquent accounts will likely occur. A sample policy can be found here.  It is also important to ensure that your entire staff knows your financial policy, how to appropriately ask for balances due, who has a balance due and knowing when to collect it.

Q: What does a sample in-house collections process include?

A: Having a written process for your financial policy and in-house collections process, along with proper scripting, provides your team with the tools and confidence needed for these patient interactions.

• Generally, a sample in-house collections policy would begin with sending the patient a statement with the balance owed.
• After 30 days of no contact or payment, a phone call is placed to notify the patient of a past due balance. Be careful not to leave any HIPAA protected information on any voicemails left when collecting balances.
• After 30 days passes again, a second phone call with a progressively more urgent message stating something along the lines of “Hi Mr. Smith, we have made two attempts to contact you regarding your past due balance. As you know from our policy, past due accounts are sent to a collections agency after 120 days past due and we are trying to prevent that from happening. Please contact us to resolve the matter.”
• A third call can be placed after another 30 days delinquent with a more urgent message informing the patient they are about to go to collections. The script should not be threatening and can sound like “As you are aware from our financial consent form, Mr. Smith, the practice’s policy is to send delinquent accounts when 120 days overdue to an outside collections agency. Our accountant requires me to forward all accounts after 120 days to his attention and I would hate to put you in that situation”.
• If there is still no contact or payment made within the next 20 days, you can advance to the next step of your policy. This could either be sending the balance to your outsourced collections agency, reporting to the credit bureaus and/or adjusting off the balance.

 In addition to having your policy in place, it is recommended that you conduct research and understand the following laws pertaining to dentists who engage in n debt collection activities on their own behalf:

Federal Fair Debt Collection Practices Act

California Robbins-Rosenthal Fair Debt Collection Practices Act:

Civil Code Section 1788-1788.3, Civil Code Section 1788.10-1788.18, Civil Code Section 1788.20 -1788.22 and Civil Code Section 1788.30-1788.33

Q: What kinds of things should I look for when searching for a collection agency?

A: The first step is to make sure it is a California based company or, at a minimum, have a strong understanding of California laws since CA collection laws are generally more strict than federal collection laws. Check the reviews of the collection agency. While you’ll likely see several emotional reviews about past due balances that you can filter out, there may be reviews challenging the professionalism or knowledge of the agency or representative. Remember that they will likely be viewed as an extension of your practice, so you’ll want to ensure you find a company with a high level of professionalism. We recommend working with an agency that is paid on a percentage of balances collected, not on a monthly basis.

Q: What information can I share with a collection agency?

A: Although HIPAA generally allows health care providers to send records to a collection agency without the patient’s written authorization, be aware that California privacy laws limit the information you can provide a collection agency. California’s Confidentiality of Medical Information Act (CMIA) requires explicit written authorization from the patient to release the records. The State Supreme Court ruled in Brown v. Mortensen that HIPAA does not preempt CMIA, and thus a patient’s written authorization is necessary in order to disclose patient information to a collection agency. It is prudent, therefore, to include an authorization form along with the initial new patient intake paperwork that authorizes the disclosure of treatment information in the event a collection agency must be used or if the patient chooses to use a credit card company’s dispute process.

Q: Do I need a Business Associate Agreement?

A: Yes, a business associate agreement must be in place for any third party that uses patient information on behalf of the dental practice for nonclinical purposes. You can find our sample Business Associate Agreement here.

Q: Do I need to inform patients that I work with a collection agency?

A: Yes, it should be noted in your financial policy and on any financial consent forms. The more transparent you are from the beginning, the more likely you are to secure the balance. You can also add it to your patient acknowledgements and authorizations page of your new patient paperwork.

Q: How do collection agencies impact the patient-doctor relationship?

A: An account sent to collections is likely the end of that patient-doctor relationship. Most patients become embarrassed and do not wish to return to the practice after an account is sent to collections.  It is best to have a strong policy in place but still review each situation as case-by-case. Is the balance due to an office error? Also, think about how long the patient has been seen at your practice and what referrals have they brought in? Does the patient have family members, friends or coworkers that are also current patients? Is the patient a local teacher or politician or do they have ties to either or both? As mentioned earlier, sending the patient’s account to collections may prompt a negative review on social media sites like Yelp, Google or NextDoor. Do not write off all debts out of fear of retaliation but do your due diligence on any potential backlash and whether the balance is worth the potential issues.

If you decide you want to dismiss the patient from your practice, contact your liability insurance provider beforehand to discuss and obtain the appropriate dismissal forms and process.

Q: My patient just filed for bankruptcy. Can I still send their account to collections?

A: It depends. It can be upsetting when a notice of bankruptcy arrives from a patient who already has an outstanding balance. The initial reaction is to immediately discontinue treatment and attempt to pursue the balance. However, both actions could have possible negative results. Once a notice of bankruptcy arrives, discontinue all collection attempts against the patient or the patient’s property. If a collection agency is involved, they must be notified of the bankruptcy and informed that collection efforts must discontinue.

If the patient is mid-treatment or in a provision state, such as a temporary crown, treatment must be completed before the patient can be dismissed from the practice. Depending on the type of bankruptcy proceeding, determine whether you are listed on the debtor’s schedule of creditors. If you are not, request to be added. You may have to write off the patient’s account balance if you are not included on the schedule of creditors.  Download and complete the official proof of claim form here. Document the specifics of the debt and attach supporting information, keeping in mind to not violate HIPAA. You can notate that you are willing to provide further detailed information if the court obtains a proper release form from the patient. This puts the ball back in the court’s hands to obtain the required documentation. File your claim with the court where the patient filed bankruptcy as soon as possible.