If the patient financial experience and collections is a challenge in your medical practice today, get ready for potentially tougher times ahead.
Affordable Care Act Marketplace premiums are projected to increase by a median of 18% in 2026, the largest increase since 2018, primarily due to rising healthcare costs and the expiration of enhanced premium tax credits. Employer-sponsored plans will also see the highest health benefit cost increase in 15 years, simultaneously exposing patients to greater out-of-pocket costs, including larger deductibles, coinsurance, and coverage gaps. In addition, medical practices will soon face the end-of-year deductible reset when patients often defer or ignore payments as financial fatigue sets in. Without proper planning, all of this could spell disaster for patient collections, financial management, and the patient financial experience. Thinking about how to improve patient collections is a time-sensitive task.
How to improve patient collections
Now is the time to evaluate patient collections and financial management workflows to strengthen front-end processes; offer flexible, patient-centric payment options; leverage technology and automation; and simplify and humanize billing.
Equally as important is identifying why patients don’t pay their healthcare bills, keeping in mind that many bills go unpaid for a variety of reasons that may not come to mind immediately. Here are eight of those reasons and what you can do to improve the patient financial experience, management, and collections.
1. Patients are confused.
Given the complexity of the U.S. healthcare system, it’s not surprising that patients don’t always understand their medical bills. For example, unclear statements with multiple line items or multiple statements for facility versus professional fees can be a huge deterrent to payment. The same is true for out-of-network charges that patients don’t anticipate, big balances that occur when patients don’t realize they hadn’t met their deductible yet, and unexpected bills for services that go beyond the scope of a routine office visit.
What to do: Provide up-front cost estimates; use plain language, patient-friendly bills; consolidate charges when possible; and align statements with Explanation of Benefits (EOB). Many practice management systems have EOB-matching tools that automatically pull payer adjudication data into the patient statement. In addition, provide patients with multiple avenues to contact the medical practice when questions arise. This includes HIPAA-compliant email, live chat, and SMS correspondence for patient collections and financial management.
2. Medical bills arrive during times of cash flow challenges.
Aligning medical bill payments with rent, mortgage, and other financial obligations can be challenging for many patients. And when they see a payment deadline that’s impossible to meet, they may ignore the bill entirely.
What to do: When thinking about how to improve patient collections and financial management, allow flexible due dates, provide empathic billing support, and offer installment plans to make payments more manageable.
3. Too much time has gone by since patients received services.
Medical bills sent months after the date of service may feel less urgent to patients or patients may even assume the bills are erroneous.
What to do: When thinking about how to improve patient collections, send medical bills promptly and via each patient’s preferred communication channel (i.e., email, text, or paper) as part of an early-out billing strategy. An early-out billing cycle is a patient collections and financial management strategy where a medical practice outsources self-pay (patient responsibility) collections early in the process—usually right after insurance adjudication but before the account becomes delinquent or bad debt.
4. Patients incorrectly assume medical practices will write off small balances.
Patients often overlook small balances (i.e., less than $100) in the hopes providers will forget payment.
What to do: Automate low-balance reminders (text/email) and offer easy one-click payment.
5. There’s no easy payment method.
If patients can’t pay via mobile, portal, or text, they procrastinate.
What to do: When thinking about how to improve patient collections and financial management, enable mobile pay, digital wallets, text-to-pay, and accept multiple channels (online, phone, kiosk).
6. Patients may not realize that help is available.
Patients may not know about payment plans or charity care options.
What to do: Highlight financial assistance programs on bills, websites, and in waiting rooms.
7. Coverage changes shift financial responsibility.
Mid-year changes in employer or Medicaid eligibility leave patients unaware they’re responsible for the medical bill.
What to do: Perform real-time coverage and eligibility checks and offer proactive financial counseling so patients understand all financial obligations.
8. Patients face language and literacy barriers.
Bills not translated or written at a higher reading level have a likelihood of nonpayment.
What to do: When thinking about how to improve patient collections, provide multi-language bills and use clear, 6th-8th grade reading level text.
Looking ahead: Patient collections and financial management
As medical practices enter the fourth quarter, there are many opportunities to improve patient collections. By addressing the root causes of patient collections challenges and thinking proactively about how to improve patient collections, practices are well-positioned to weather any financial uncertainties of the future. Learn how Inbox Health can help.
About the author
Lisa A. Eramo, MA is a freelance healthcare writer who specializes in healthcare reimbursement, health information management, value-based care, and patient engagement. She contributes bylined articles to various healthcare trade publications and also assists clients with healthcare content marketing. You can reach her at lisa@lisaeramo.com or by visiting www.lisaeramo.com.