7 Tips for Selecting the Right Collection Agency for your Medical Business

Collection agencies come in many shapes and sizes with different specialties and strengths. Selecting one is a daunting task, but here are 7 tips that can help you make the right decision.

Tip 1

Identify your challenges

Try to identify your weakness when it comes to collecting your past due. What are your biggest hurdles?

  • Do you end up with a lot of bad phone numbers and addresses?
  • Is there a language barrier?
  • Are your debtors unavailable during business hours?
  • Are they disregarding your collection efforts?
  • Do you have too many time constraints?

Make sure you identify your challenges so you can shop for an agency that provides a service that matches your needs.

Tip 2

Accountability and Transparency

Debt collections companies often garner a bad reputation for both mistreating debtors and for gaining capital from their clients. How does the agency account for their collection activities? Important things to look for are

  • Make sure the vendor records all calls in case of complaints or issues
  • Has simple notifications of received payments and account updates
  • Has a trackable, easy to understand call and letter log
  • Easy access to your accounts, collection activities, payments and disbursements

Tip 3

Industry Experience

Experience matters and it matters in a broad sense. Making sure they meet these simple criteria could go a long way in multiplying your returns.

  • Experienced with your specialty and industry
  • A well-defined guarantor procedure
  • Familiarity with a wide range of debt size and age

Tip 4

Credit Bureau Reporting

Reporting a delinquency on a debtors credit report is the greatest leverage you have. It is the single most powerful action you can take to ensure you receive your past due. Reported debts stay on credit reports for 7 years and can have a huge impact on debtors. An agency should:

  • Report to all 3 Major Credit Bureaus. New regulations have made credit reporting a very tedious process especially for medical debt, causing many agencies to stray away from reporting to the Credit Bureaus. This is the biggest leverage you have in collecting your money. Make sure the agency reports to all 3 major Credit Bureaus.
  • Frequently update Credit Bureaus to ensure that they remain current and accurate, inaccuracies could lead to serious legal repercussions.

Tip 5

Communication and Reporting

Collections require an open door of communication between your practice and the agency. Think about possible scenarios and how you and the agency will work together if issues come up. Easy, fast communication and efficiency depends on:

  • Multiple methods of communication including written and 24/7 online account reporting
  • A secure fast way to send PHI and other sensitive information, like debtors invoices and bills
  • The ability to perform actions independently. For example: posting a payment you received at your office, or getting a quick update on the payment status of a patient that is requesting a visit.

Tip 6

Fees and Collection Rates

Historically, collections have gone to the lowest bidder. Those that have the lowest commission however, do not always have the highest collection rate. Make sure the agency you are looking at:

  • Stays on debts long term
  • Has demonstrated success at collecting debts
  • Provides work accountability, if they are just cherry picking accounts and leaving the rest behind your debts will always stay uncollected
  • Has a fee schedule that meets your budget and reflects their work. The newer the debt, the easier to collect, the lower your fees should be.

Fees and their collection rates are 2 sides of a coin that reflect each other. A higher collection rate comes only from one thing: more work.

Tip 7

Regulatory Compliance

Regulatory compliance plays a huge part in keeping both you and the agency’s reputation intact and your revenue out of the red. A great agency protects your business by:

  • Weeding out bankrupt, deceased and lawyer represented debtors and following the legal process for these special cases
  • Being knowledgeable with FDCPA, FCRA and other related laws
  • Having safeguards in place to prevent human error

Fines for regulatory noncompliance can go into the thousands having a loophole free system can go a long way in keeping both your reputation and your revenue in good condition.