Had something similar when my doctor retired, though they were up front that there would be a fee. I never thought of the privacy portion, but given how many patients there are and each one will have a different new doctor I can see how transferring all those could be an administrative nightmare so getting it to a 3rd party who took care of it made sense.
Most doctors charge for stuff they can't bill the government for anyway, I didn't see it as any different.
Good question about the privacy though, must be because the company is a contractor to the doctor or something, same way someone who works in the doctor's office would have access to your files.
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Uncertainty is an uncomfortable position.
But certainty is an absurd one.
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