Why Patient Collections Are Becoming Harder for Medical Practices
You send statements and follow up, but the money doesn't follow. With patient balances making up 30% of revenue, collections are critical, yet most practices recover less than half of what patients owe.
MGMA reported that days in A/R have increased, 27% of healthcare leaders changed patient payment plan policies, and 47% of medical groups reported an increase in self-pay or uninsured patients in their payer mix. Thus, patient collections should be a strategic priority, not an afterthought.
In this article, let’s explore the top challenges of patient collections and how to refocus your strategic priority to building an effective patient collections process.
Key Takeaways
Patient collections refers to the recovery of outstanding patient balances.
With more patients enrolling in high-deductible health plans (HDHPs), they are shouldering more financial responsibility than ever before.
Having financial conversations earlier in the patient encounter makes all the difference.
Clear policies help you handle hardship cases, self-pay discounts, and financial assistance options.
What is patient collections?
Patient collections refers to the recovery of outstanding patient balances. It begins after the insurance carrier has remitted its share, or when a patient is self-pay, and encompasses copays, deductibles, coinsurance, and any residual amounts. The process remains active until each account is brought to a zero balance or otherwise resolved.
Patient collections include:
Sharing an accurate estimate of the patient’s responsibility before or after the visit.
Asking for payment at check-in or check-out when appropriate.
Sending statements and reminders for unpaid balances.
Offering payment plans or other payment options when needed.
Following up on overdue accounts, including possible transfer to collections if unpaid.
Patient collections can be categorized into three types:
Point-of-Service: Collecting payments at the time of service.
Post-Service Billing and Follow-Up: Invoicing patients after insurance claims are processed.
Third-Party Collections: Engaging collection agencies for overdue payments.
Why patient collections are harder now
According to McKinsey & Co., practices recover only about 50% of what patients owe after they leave the office, and that number drops to just 10–20% for uninsured patients. This reflects a fundamental shift in healthcare economics.
With more patients enrolling in high-deductible health plans (HDHPs), they are shouldering more financial responsibility than ever before. If your revenue operations are still built primarily around insurance reimbursements, you're operating with a blind spot—and the patient side of the ledger is where your vulnerability lies.
Take a look at this sample scenario: A family medicine clinic has many patients enrolled in high-deductible health plans. A patient comes in for a visit, but instead of a small copay, they now owe a large deductible, and they are shocked to see the bill is more than $100.
Because that cost is unexpected, the patient may delay payment, request a statement, or simply not pay right away.
The Domino Effect of Poor Collections
This aligns with MGMA’s survey on the top challenges medical groups face in handling collections and days in A/R:
Continuing challenges in staffing for billing and collections.
Increasing prior authorizations and claim denials disrupting the practice.
Increased requests for documentation and increased time to code and review notes prior to submission.
Interestingly, newly hired providers need more time to become familiar with the EHR before they can send claims.
So yes, while high-deductible health plans (HDHPs) can often offer lower monthly premiums, they shift a significant financial burden onto patients. In 2023, the average individual deductible stood at $1,735, roughly on par with 2022's $1,763.
Meanwhile, practices must still navigate the administrative maze of insurance claims, from eligibility verification to claims processing, adding both cost and complexity to every visit. To safeguard your practice against declining collection rates, we've distilled the essential strategies you can implement below.
What to do: Effective strategies for better patient collections
The Healthcare Financial Management Association (HFMA) believes that having financial conversations earlier in the patient encounter makes all the difference. These conversations must be consistent, compassionate, and data-driven, with a focus on fostering a positive patient experience.
MGMA supports this, stating that you must confirm insurance and eligibility within the week of the visit or no more than 7 days prior to the visit. Many insurance plans change each month, so staying up to date should be your priority. Moreover, you need to implement the following steps:
Proactively contact patients with outstanding balances before appointments and offer to arrange payment options, either prior to or on the day of service, to reduce check-in stress.
Clearly communicate financial responsibilities early in the patient journey, and connect patients with a financial counselor to help them understand coverage, payment plans, and available assistance programs.
Provide upfront, written cost estimates for scheduled surgeries and procedures, so patients can make informed decisions and plan financially in advance.
Offer flexible, modern payment methods, including Credit Card on File, Venmo, PayPal, and other digital wallets, to make settling balances quick and convenient.
Train all front-line and billing staff on the HHS poverty guidelines and how Federal Poverty Levels (FPL) are applied to determine eligibility for reduced-cost health coverage, ensuring consistent, compassionate, and accurate patient support.
Clear policies help you handle hardship cases, self-pay discounts, and financial assistance options. It creates clearer expectations, reduces payment confusion, and billing friction for patients.
Medical Economics added that staff should be trained to communicate in a compassionate manner:
A simple, grounded, and clear script can ease patient resistance at the front desk. Patients need an excellent communicator, not a surprise bill two weeks later.
More importantly, to truly optimize patient collections, you need the right technology working behind the scenes, and that’s where we come in. At Synapse Revenue Cycle Management, we deploy cutting-edge solutions designed to streamline your collections, reduce friction, and accelerate cash flow, including:
Claim-scrubbing tools that automatically detect clerical errors and simple coding mistakes before claims are submitted, reducing denials and rework.
Patient-friendly digital payment platforms that offer convenience, flexibility, and a seamless checkout experience across multiple devices.
Real-time insurance verification systems that confirm coverage, benefits, and eligibility before the patient walks through the door—so there are no surprises later.
Clear, consumer-friendly billing statements that break down charges in plain language, making it easy for patients to understand what they owe and why.
Tech-enabled practice management software that centralizes billing, scheduling, and payment tracking into one intuitive dashboard, saving your team time and reducing administrative burden
Even start-up clinics, like our client below, have shown that patient collection is not insurmountable. Their average monthly collection doubled from $26,348.64 to $50,759.84 during the 3rd year with Synapse.
Patient collections may be becoming harder for medical practices now, but it isn’t impossible to address. Due to higher patient responsibilities, a multifaceted approach is needed. That’s why Synapse billing professionals put all their hands on deck to relieve your collection efforts by streamlining processes without losing compassion and a patient-centered approach. Find out how by contacting us.
About Us:
Synapse Medical Billing is built on transparency, accountability, and trust across the entire revenue cycle. We provide healthcare providers with clear visibility into their billing processes, helping them stay informed while focusing on patient care. Through efficient, accurate, and adaptable solutions, we support better outcomes for both providers and patients.
Source:
Analyzing pre-payment and point-of-service collections efforts. (2021). HFMA.
https://www.hfma.org/finance-and-business-strategy/analyzing-pre-payment-and-point-of-service-collections-efforts/
Collection challenges growing for medical practices as inflation puts pinch on patient finances. (2023). Www.Mgma.Com.
https://www.mgma.com/mgma-stats/collection-challenges-growing-for-medical-practices-as-inflation-puts-pinch-on-patient-finances
2023 Employer Health Benefits Survey. (2023). Retrieved from
https://www.kff.org/health-costs/2023-employer-health-benefits-survey/
Patel, B. (2026). The year-round patient collections problem physicians can’t afford to ignore. Medeconomics; Medical Economics.
https://www.medicaleconomics.com/view/the-year-round-patient-collections-problem-physicians-can-t-afford-to-ignore
The patient as the new payer: 5 opportunities to improve the patient financial experience. (2023). HFMA.
https://www.hfma.org/revenue-cycle/patients-as-payers-five-ways-to-improve-the-patient-experience/
The Trillion Dollar Prize. Retrieved from
https://www.mckinsey.com/~/media/mckinsey/industries/healthcare%20systems%20and%20services/our%20insights/claiming%20the%201%20trillion%20prize%20in%20us%20health%20care/the%20trillion%20dollar%20prize.pdf
Transparency and flexible payment options keep care within reach. (2026). Mgma.Com.
https://www.mgma.com/mgma-stat/transparency-and-flexible-payment-options-keep-care-within-reach