Outstanding patient accounts are an endemic feature of dental practice. Patients who pay a gap on the day and then receive a follow-up account for additional costs, patients who pay by payment plan and default, patients who dispute what was quoted versus what was charged — all produce outstanding accounts that most practices are poorly equipped to recover. The challenge is recovering money while preserving the patient relationship and complying with health records privacy obligations.
The regulatory context
Patient information in a dental practice is health information for the purposes of the Privacy Act 1988 (Cth) and the Australian Privacy Principles, as well as state health records legislation where applicable. Any disclosure of patient information — including to a debt collection agency — must comply with those obligations. In practice, this means that you can disclose the amount owed and contact details to a recovery agent, but you should not disclose the nature of the dental treatment provided without the patient's consent or a relevant exception applying.
When engaging an external recovery agency, ensure your engagement letter makes clear what information may be shared and obtain appropriate consents (or review your privacy policy to confirm consent is already captured at the patient intake stage).
In-practice recovery: the first 60 days
Most patient accounts can and should be handled internally in the first 60 days. A systematic process — statement at 14 days, phone call at 30 days, final notice at 45 days with a clear statement that the account will be referred externally — resolves the majority of genuine oversights. The phone call is the most important step: many patients are not aware of the outstanding account, or have a question about the charge that a two-minute conversation resolves.
Payment plans: structuring them to succeed
For larger accounts, a payment plan may be appropriate. Structure plans with a minimum instalment that is meaningful relative to the balance and a defined end date. Get the arrangement in writing — a signed plan with the patient's name, amount, instalment schedule, and consequence of default (referral for recovery) provides both a record and a commitment. Direct debit arrangements outperform self-managed payments significantly in plan completion rates.
When to refer externally
Accounts that have not resolved through internal follow-up by 60 to 90 days are candidates for external referral. The threshold for referral should be set against the cost of recovery — accounts under $200 may not be worth external action, while accounts over $500 are generally worth pursuing. A recovery agency experienced in health practice accounts will understand the privacy constraints and handle patient contact in a manner consistent with your practice's reputation.
Contact Merion to discuss how we handle health practice outstanding accounts — including the privacy considerations that general-purpose collectors often overlook.