As of November 2026, TSI's bad debt recovery service collects patient balances you've written off, in TSI's name as a licensed collection agency. It works primary, secondary and tertiary placements under your financial assistance policy, sends the notices federal collection law requires and takes no extraordinary collection action unless you authorize it after the 501(r) steps.
Results vary by payer mix and client program.
- Financial assistance policy appliedScreened
- Coverage recheckedNone found
- 501(r) notice periodComplete
- Credit reporting or legal actionOnly with your written OK
Got a letter or call from TSI about your own account? Go to the Consumer Support Hub or make a payment.
What the wrong agency costs you
Two things can go wrong with bad debt, and only one of them is low recovery.
The other is your hospital's name in a story about suing patients, or in a breach notice. When a medical-debt collector was breached in 2018 and 2019, the lab company behind the accounts agreed in 2026 to pay $35 million to settle a class action (TechTarget, June 2026). If you're tax-exempt, the IRS holds you accountable for the collection actions of agencies working on your behalf. Your agency's conduct is your conduct.
Low recovery is real too, and harder to see. A bad-debt agency that collects a lot may be collecting balances your early-out stage should have resolved. One that collects little may never have reached the patient.
What's included
Collection in TSI's name
TSI works your written-off balances as a licensed agency, with validation notices, dispute handling and the Regulation F call limits.
Financial assistance checks, still
Presumptive charity scoring runs on placement. Patients likely to qualify are flagged and routed under your FAP, even after write-off.
Plans and settlements in your limits
Collectors offer the payment plans and settlement ranges you approve. Patients can pay online, by phone or with a digital wallet.
Skip tracing and contact
Address and phone updates for patients who moved, then texts, email, calls and letters in a scored order, on the channel each patient is most likely to answer.
Extraordinary actions only on your word
Credit reporting, lawsuits and other ECAs happen only if you authorize them in writing, after FAP review, and only where state law allows.
Coverage found, sent back
When a patient turns out to have insurance or other coverage, collection stops and the account goes back to you for billing.
How it runs
Agree the rules
Placement order (primary, secondary, tertiary), which ECAs if any are allowed, settlement authority and recall terms go into the contract.
Place on a schedule
Weekly write-off files bring accounts from your system with 501(r) dates, FAP status and dispute history attached.
Screen and notify
Charity scoring and bankruptcy, deceased and other scrubs run first. Validation notices go out with the patient's dispute rights.
Work the account
Collectors reach patients, answer questions and set up plans. Coverage that turns up sends the account back to you for billing.
Report and return
Results report by placement. Accounts that end primary placement can move to a secondary agency or back to you.
Where it fits with the other stages
Bad debt is the last patient-balance stage. Accounts come from early-out self-pay or your own business office once you write them off. Before write-off, the work happens in your name. After, it usually happens in the agency's.
Godbey Group consultants, in an HFMA Ask the Expert answer (2012, updated 2022), suggested a bad-debt agency "should not collect more than 5 to 7 percent of dollars turned over from the early out program," and recommended separate agencies for each stage. If one vendor runs both, insist on results by stage and by placement. TSI reports primary and secondary placements separately for that reason.
For both stages side by side, and how to choose a medical collection agency, see the overview.
Legal action, where you allow it, goes through TSI's managed attorney network, one approved account at a time.
Rules that shape the work
The 501(r) rules set a 120-day notification period and a 240-day application period from the first post-discharge statement, and a hospital that receives a financial assistance application suspends ECAs while it decides.
State rules keep changing. The federal medical-debt credit reporting rule was vacated on Jul 11, 2025, and the National Consumer Law Center counted 15 states and DC limiting medical-debt reporting as of Sept 21, 2026. From Jan 1, 2027, New York City's SHIELD Rule requires collectors to tell NYC consumers in every validation notice that medical debt can't be reported to credit bureaus. It also requires them to treat a claim that insurance or financial assistance should have paid as a dispute, and to check the hospital's financial assistance policy before collecting a disputed medical debt (NYC DCWP FAQ, Oct 22, 2026).
What you see
Reports show placements, collections and liquidation by placement month and placement order, charity referrals, accounts returned for coverage, disputes, complaints and any authorized ECAs.
General information, current as of November 2026. It isn't legal advice. Rules change and differ by state, so check the sources linked here and talk to your own counsel before you act on it.
The company behind the work
Questions buyers ask
What's the difference between early-out and bad debt?
Early-out works open balances in your name before write-off. Bad debt starts after write-off, usually in the agency's name, and federal collection law applies.
Will TSI report our patients to credit bureaus or sue them?
Only with your written approval, after 501(r) steps and FAP screening, and only where state law allows. The National Consumer Law Center counted 15 states and DC limiting medical-debt reporting as of Sept 21, 2026, so the patient's state often decides.
How should a hospital choose a bad debt agency that follows 501(r)?
Ask how it screens for financial assistance after placement, who approves extraordinary collection actions and whether it reports primary and secondary placements separately. Then compare liquidation by placement month on matched accounts. TSI screens on placement, takes no ECA without your written approval and reports each placement separately.
Can TSI take secondary placements from another agency?
Yes. Secondary and tertiary placements are reported separately from primary.
Can TSI work bad debt for a health system in several states?
Yes. TSI places each account under the rules of the patient's state, including that state's limits on medical-debt credit reporting and collection licensing, and reports results by facility and by placement.
What happens if a patient turns out to have coverage?
The account goes back to you for billing, and collection stops on it.
See where your patient balances leak
The Denials Economics Sprint baselines one payer and denial class and shows how much reaches self-pay and bad debt, so you can judge your vendors on your own numbers.
Got a letter or call from TSI about your own account? Go to the Consumer Support Hub or make a payment.
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