Yes, it's both legal and done regularly.
A debt collector is required under FDCPA 809(a) to give formal notice of their collection activity to the consumer within 5 days after any "intitial communication" with the consumer, not before.
While reporting to a CRA is not specifically mentioned in the statute as giving rise to the requirement for collection ("dunning") notice, case law has established it to be a triggering act. If they failed to provide dunning notice within the 5 day period, they could be subject to sanction or possible legal action for the violation, but such is rarely done. Failure to provide timely dunning notice is not, itself, basis for deletion of their prior reporting.
with medical its very common. thats why i always preach to everyone especially if your insurance provider is involved to make sure everyone gets paid cause once an account gets slightly past due it gets sent over to collections right away and gets reported. it happens alot.