The single most important tool any small business has to minimize bad debt is the use of a solid customer contract. Communication of what service or product is provided, how much it will cost and how it is to be paid are essential.

The need for communication is especially important for medical and dental care providers. Patients who understand your office policies from the beginning are happier, long-term patients.

One important issue is “prior express consent” when it comes to sharing patient information with a third party collection agency. Certainly, your collection agency should sign a HIPAA partnership agreement and you should give your collection agency only the information they need to collect the past due balance, but the recent cases have nothing to do with HIPAA-protected information.

Patients have brought lawsuits against debt collectors (and in some instances, the provider) because the cell phone number they provided on their patient intake form was later used to contact them regarding collection of a debt, which the patients claim was an invasion of their privacy. The patients claim that they provided a cell phone number prior express consent to contact them regarding medical issues, but did not provide the information to be used for payment and/or collection purposes.

The Courts have ruled both for and against patients who have brought these kinds of suits, and it usually comes down to the language on the form used by the medical provider.

Please check your patient financial agreement today. Ask your attorney to review it and include very clear language that any contact information the patient provides can and will be used by your office or your agent to collect past due balances. Make sure patient acknowledges this fact in writing.

We would love to hear from medical and dental offices about this issue!

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