This is a common question posed on practitioner listservs. Some people have very strong feelings about this issue.
In California, the answer to this question is “yes.” If you have specific concerns about how this applies to any given situation you really need to consult with an attorney.
But as a general matter, practitioners can usually use collection agencies to collect on debts owed by patients so long as (1) it isn’t otherwise disallowed by law, (2) the patient has agreed to this in the office policies/informed consent document that was signed at the outset of the treatment relationship, and (3) the information provided to the collection agency is minimal in nature and doesn’t disclose confidential material. (Remember that the HIPAA regulations have a very good description of what information can be provided for payment purposes.)
Remember, just because you can use a collection agency doesn’t mean that you necessarily should, particularly if such a decision doesn’t necessarily comport with your personal style. There’s nothing necessarily wrong with using a collection agency, but the likelihood for conflict with your patient will probably increase. After all, if you’ve ever received a call from a collection agency or had to deal with these folks you probably know that it’s not a pleasant experience and it doesn’t engender good will between you and the party claiming the debt. Be prepared to kiss your therapeutic relationship goodbye.
But then again, if you worked with someone and they promised to pay you for your services, why shouldn’t you be able to collect what you are owed? I can think of plenty of reasons to pursue payment, just one of which is that you work for a living and that if you don’t get paid, you aren’t able to pay your bills.
Chief among the cautionary reasons to avoid using collection agencies is the concern that the patient will file some sort of complaint against your license, which you will then have to spend time defending. It’s possible that this might happen. I’ve heard of (and defended other psychologists from) bogus complaints.
In most respects this is a business decision. How do you want to run your practice? How comfortable are you with conflict? Do you want to collect as much of what is owed to you? Are you willing to forgive debts and walk away from income you have earned?
If your personal style is conflict-averse, and/or for other reasons you decide that collection agencies aren’t services you want to use, perhaps this guideline might be of help: never let debts accrue that you aren’t willing to walk away from. Insert a line into your practice policies document where your patients agree that you will stop treatment upon unpaid bills of ______ (insert time/amount).
But whatever you decide to do, make it a conscious decision. You probably work with your patients to take ownership over their lives, so why can’t you? Chart your own course for your practice.
IMPORTANT: This website is for basic information only. Nothing in this website should be construed to be formal legal advice, nor does it create an attorney-client relationship. Please see the “Important Information” page at the top of the screen.