Can a business turn your account into collections when you have been making regular monthly payments?

Question Details:

The hospital where I work sent out letters to patients that have outstanding balances, which includes myself, giving 3 options to pay your balance: payment in full with a discount, charging it to a credit card, or getting a loan thru a company they have made arrangements with @ 15% interest. If you don't do one of the above they state they will turn your account over to collections. The hospital takes a payment out of my check every month. I've offered to increase my payment and was told it wouldn't help. Can they turn my account into collections even though I make regular payments?

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