> ## Documentation Index > Fetch the complete documentation index at: https://dso.getlemma.com/llms.txt > Use this file to discover all available pages before exploring further. # Use collections agencies (carefully) > Selecting an agency, HIPAA-compliant data sharing, what to send and what never to send, recall rights, and the reputational calculus of sending dental balances to collections. Sending patient balances to collections recovers a modest fraction of what is owed and carries real reputational cost. This guide covers doing it properly when you do it, and thinking clearly about whether to. ## Prerequisites * Your internal collection process exhausted: statements, contact, payment plan offered * A financial policy the patient signed * A hardship or charity care assessment, if you offer one * Counsel review of the agency agreement ## Think about it first Collect healthcare debt with the patient relationship in mind. Dental balances often arise from benefit rules the patient did not understand, such as a downgrade, frequency limit, or exhausted annual maximum. A collections placement may also affect hygiene recall, online reviews, community standing, and family referrals. Weigh those effects against the expected recovery. The rules for **medical debt credit reporting**, including dental debt, have been changing at both the federal and state levels. **Verify the current rules** before relying on credit reporting as leverage. Before sending an account, ask: * Is the balance large enough to justify the recovery and the cost? * Was the patient offered a payment plan, and did they decline? * Was hardship assessed? * Is the balance correct, or has the patient identified a billing issue such as an unexplained downgrade or a claim the plan should have paid? * Would we be comfortable if this appeared in a local news story? That last question filters more accounts than any policy. ## Selecting an agency | Criterion | What to look for | | ---------------------------------------------- | ----------------------------------------------------------------------------------------------- | | **Healthcare (ideally dental) specialization** | They understand EOBs, insurance timing, and why a downgrade or exhausted-maximum balance exists | | **Compliance posture** | FDCPA training, complaint handling, call recording, documented procedures | | **Willingness to sign a BAA** | Required when the agency is acting as the practice's business associate | | **Recall rights** | You can pull an account back at any time, for any reason | | **Fee structure** | Contingency percentage, typically substantial; know it | | **Reporting** | Account-level status you can actually see | | **Complaint escalation** | How disputes reach you, and how fast | | **Credit reporting practices** | What they do, and whether it matches your policy and current law | Ask for references from healthcare clients and, if you can, listen to a recorded call. ## HIPAA and what you send Collection is a **payment** activity under HIPAA, so disclosure to an agency is permitted, subject to a BAA and to **minimum necessary**. | Generally appropriate | Generally not | | --------------------------------------------- | ----------------------------------------------- | | Patient name and contact information | Diagnoses | | Account number | Clinical notes | | Dates of service | Treatment details | | Balance owed | Procedure descriptions beyond what's needed | | Payment history | Anything about the medical content of the visit | | Insurance information relevant to the balance | | **Send the minimum necessary to collect the debt.** An agency does not need to know why the patient was seen. "Balance for dental services on these dates" collects exactly as well as a procedure-by-procedure narrative; sending diagnostic or clinical detail is an over-disclosure, and it is the kind that surfaces in complaints. ## Steps Minimum balance, minimum age, required prior contact attempts, hardship screening, and exclusions, for example, accounts in active dispute or with a pending appeal. Remove accounts with a pending insurance appeal, active payment plan, in-progress orthodontic contract, active membership-plan autopay, credit balance, open card dispute, documented dispute, or pending hardship application. Also review how the balance arose. Speak with the patient before placing a downgrade or exhausted-maximum balance that was not included in the treatment estimate. **Cross-check against open chargebacks and credit balances.** Sending an account to collections while you owe the patient a refund, or while they have an open card dispute, is the fact pattern that produces complaints and regulatory attention. If a patient disputes the balance, insurance reprocesses, or the balance turns out to be wrong, **recall the account immediately**. Keep the recall process fast and unambiguous, because slow recalls are what turn errors into complaints. Track recovery rate, complaint rate, and recall rate. A high complaint rate is a signal about the agency or about your placement policy. Including a sample of their communications with your patients. ## Alternatives worth exhausting first | Alternative | Why it often works better | | --------------------------------------- | ------------------------------------------------------------------ | | **A phone call from your own staff** | Many balances resolve once someone explains the bill | | **Payment plan with autopay** | Collects more, at lower cost, without reputational damage | | **Discount for prompt payment** | Where lawful and consistently applied | | **Financial assistance / charity care** | Appropriate where genuine hardship exists, and better for everyone | | **Write-off** | Sometimes the right answer for a small balance | ## DSO notes **Collections management is a DSO function**; the debt belongs to the **PC** and recovered funds are the PC's revenue, landing in the PC's account. **The PC should approve the collection policy**, because it affects the patient relationship and, at the margin, access to care, even though the dental support organization (DSO) executes it. See [What a DSO can and can't do](/concepts/model/what-dsos-can-and-cant-do). ## Verify it worked * [ ] Written placement policy with minimum balance, age, and prior contact requirements * [ ] BAA executed before any data was sent * [ ] Placement file scrubbed for appeals, payment plans, ortho contracts, credit balances, and disputes * [ ] Minimum necessary data only * [ ] Recall process fast and documented * [ ] Complaint and recall rates tracked * [ ] Agency reviewed annually, including sample communications * [ ] Current medical-debt credit reporting rules verified * [ ] PC approved the policy ## Common failure modes | Failure | Consequence | | ------------------------------------------------ | --------------------------------------------- | | No BAA | HIPAA violation | | Sending clinical detail | Over-disclosure | | Placing accounts with pending appeals | Collecting on money the payer may owe | | Placing accounts where you owe a refund | Complaints, and reputational damage | | Slow recalls | Errors become complaints | | No complaint monitoring | Discovering agency behavior via a review site | | Relying on outdated credit reporting assumptions | Non-compliance | | Not exhausting internal options first | Reputational cost for recoverable balances |