You have to check your state laws. Also If I were you I would NOT provide this service because as you have stated there could be serious legal ramifications. Leave the ultimate decision to the provider on the actions taken for accounts in collection. That really is a clinical / provider issue and should NOT be handled by the billing department at all. If it were me I would merely do my part and leave the practice to continue as they see fit with my recommendation they seek legal advice on dismissal of a patient in their state, there are very specific standards set for this.