Why might an account be labeled uncollectible?

An account may be labeled uncollectible when collection efforts have been maximized. This occurs when a healthcare provider or billing entity has exhausted all reasonable means of attempting to collect the outstanding balance from the patient or their insurance. This could involve multiple attempts to contact the patient for payment, sending reminders, and potentially involving third-party collection agencies. Once it is determined that there is no realistic possibility of recovering the outstanding amount despite these efforts, the account is classified as uncollectible.

In contrast, agreeing to a payment plan suggests that the patient is still engaged and making an effort to settle their balance, so the account is not viewed as uncollectible. Similarly, both settling an account and paying a balance partially indicate some level of financial activity toward resolution. Therefore, accounts in these situations would not typically be labeled as uncollectible.