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  • Matt Kiefer

The Questions Healthcare Facilities Should Ask When Hiring a Collection Agency

When placing unpaid accounts with a collection agency, you are creating an extension of y

our brand. If that agency is not nice to your patients, those patients will put just as much of the blame on you as the agency itself and may start looking elsewhere for a doctor. Before taking the plunge, healthcare facilities should thoroughly vet a collection agency to make sure that the agency will treat your patients as though they were their very own. To help accomplish that, here are some questions that you should ask of a collection agency.

  • Are you licensed? In many states, including Florida, collection agencies require a license to operate. Make sure you see a copy of it. If they are not licensed in a particular state ask how will they work the accounts for patients that live or move to those states. Some agencies have relationships through industry association to ensure all accounts are worked properly or they may seek to get licensed in new states?

  • Are you a member of any industry associations? Collection agencies that have taken the time to join an industry association, whether on a state or national level, are less likely to be fly-by-night companies that are only out for a quick buck and won’t care about your accounts. Better yet, ask if they are not only members but do they participate in any leadership roles or committees. Agency employees that participate in leadership roles in industry associations are more likely to be up-to-date in their compliance initiatives and better educated to keep the agency as well as your practice or hospital out of litigation.

  • Do you have any references? Hiring a collection agency is a lot like hiring a new employee. Asking for references and speaking with them should be a standard component of the on-boarding process. Seek references that have been doing business with the agency for several years at minimum.

  • How are your collectors trained? Again, this is a question that will separate legitimate collection agencies from the rest. Any reputable collection agency worth its salt should have no problem walking you through the training process for new employees and its annual continuing education process for its staff. Ensure that it can account for training in high liability areas like the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA), the Telephone Communication Practices Act (TCPA), and the Health Insurance Portability and Accountability Act. In an age where alleged identity theft is getting more common, ensure that they have Red Flag Rules in place to identify and mitigate ID theft claims and that they notify you as a business partner.

  • What kind of access will I have to my accounts? You should be able to have access to reports to see how much money is being recovered, how many accounts have been contacted, and other key performance indicators to confirm your accounts are being well-treated. Read-only system access for your key RCM employees or managers should be possible to review your placements from time to time.

  • How will you handle disputes from our patients? The agency should be able to show you its policies and procedures for handling simple (nondescript) disputes as well as those that are more complicated. Disputes should be able to be handled with minimal requirements from your staff once an account is turned to collections.

  • What certifications or protocols do you have to protect the patient data once turned over to collections? Like training employees, companies can and should be certified in different areas. This can include PCI-DSS for accepting credit and debit card payments, SOC 1 Type II audits for the financial controls of an organization, and SOC 2 Type II audits for the overall controls within an organization. The systems it uses should also have the proper controls in place and you may want to review their policies in procedures for any third-party disclosures of protected health information and financial transactions.

  • What kind of experience do you have with my kind of accounts? Collection agencies can specialize in certain types of debt. There are nuances to different kinds of debt and you want to make sure that the agency has experience dealing with the type of accounts you are placing. Do they have experience dealing with insurance companies and following up on appeals?


Doing your homework is important when it comes to selecting the right collection agency partner. Collection agencies are not all the same and should be vetted to ensure they meet the values of your company so that your customers will be treated with respect. Collecting on bad debt accounts is, in fact, a part of the patient experience.

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