FAQ: Can I Add a Collection Fee to a Delinquent Account?

FAQ:

Can I charge a collection fee on delinquent patient accounts?

Answer:

Yes

The Fine Print:

Adding fees to a patient account is permissible by law, so long as “such amount is expressly authorized by the agreement creating the debt or permitted by law.” 15 U.S.C. 1692f §810(1)

In order to add interest, collection costs or any other expenses to the original debt it must be expressly stated in your healthcare organization’s financial policy that you will do so. The policy must specifically state the dollar amount or percentage of any fees that will be added to the past-due balance. Indicating a fee “up to” a certain percentage or a “reasonable fee” is not sufficient.

Financial Policy Language re: Adding Fees

 

All patients must read, understand and sign the financial policy prior to services being rendered. Not sure if your financial policy meets these requirements? Click here for a sample financial policy with an example of appropriate fee language.

It is important to review your state’s collection laws to ensure collection of certain fees is allowable under the law.

A note about adding fees:

Adding a collection fee to your practice’s overdue accounts can help to cover the cost of collections. However, it is important to remember that adding a collection fee, even if it is the same as or higher than that charged by your medical collection agency, will likely not result in full recovery of the overdue balance.

Your collection agency will attempt to collect on the total amount due by the patient, which includes your organization’s collection fee in addition to the principal balance from services rendered. The contingency fee paid to the agency will include a percentage of the fees collected. See the example below or contact us for clarification.

Calculating a Collection Fee

Written by Ali Bechtel, Public Relations Coordinator

This information is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Although we attempt to provide up-to-date information, laws and regulations often change. We make no claims, promises, or guarantees about the accuracy or completeness of this document. For legal advice, please consult an attorney.

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