At A Glance
For millions of Americans, medical debt isn’t just a financial burden: it’s a barrier to care. To overcome this challenge, providers need proactive patient collections strategies that prioritize patient well-being and financial stability. Learn how providers can incorporate data-driven strategies that rely on automation and digital tools to improve the patient collections process.
A positive patient experience can quickly sour when difficult financial conversations arise. High out-of-pocket costs and confusing medical bills make payments a sensitive issue for many patients. For providers, the challenge is clear: how to improve patient collections while delivering compassionate care. This article considers proven strategies and best practices to simplify patient collections, increase patient payments and reduce bad debt in healthcare.
The importance of optimizing patient collections for healthcare providers
Hospital operating margins may have rebounded, though they remain extremely tight – especially as healthcare costs continue to climb. For many patients, an unforeseen medical emergency can quickly become a financial one. Experian Health’s State of Patient Access 2026 (SOPA) survey found that 31% of patients don’t feel confident they can afford necessary healthcare costs. And one in five Americans already has medical debt in collections, according to 2024 Consumer Financial Protection Bureau data.
When patient medical debt goes unpaid, providers are required to spend valuable time and resources on patient collections – or risk increased bad-debt exposure. Still, many providers continue to rely on manual, error-prone processes that can bottleneck collections. However, when providers adopt tools and strategies designed to improve healthcare collections, they offer numerous benefits, from higher collection rates to a smoother patient financial experience.
Breaking down the patient collections process
The patient collections process involves determining the patient’s share of medical costs after insurance has been processed, communicating those amounts to the patient, and collecting payment through billing, payment plans, or other collection efforts.
| Typical steps in the patient collections process include: |
| Insurance verification: During registration, providers verify insurance coverage and eligibility to estimate what the insurer will cover. |
| Patient estimates: Accurate cost estimates are provided to patients upfront, giving them the option to make payments before or at the time of service. |
| Billing and collections: The bulk of billing and collections activities takes place post-visit, sometimes involving third-party agencies. |
| However, roadblocks are common in patient collections and include: |
| Shifting payer rules and regulations: Staff must keep up with frequent changes in insurance policies and shifting compliance needs to prevent billing or cost calculation errors. |
| High self-pay costs: Patients are often worried about affordability, leading to late payments and increased collections activities. |
| Low visibility into patient financials: Billing teams often lack information about patients’ financial circumstances, making it difficult to tailor outreach or identify patients who may need financial assistance. |
| Lack of payment options: Patients expect more convenient payment options, such as online or mobile payment methods, and will express frustration if the process feels inconvenient. |
How to improve patient collections with data-driven strategies
These data-driven strategies can help providers take steps to improve patient collections, maximize reimbursements and deliver a better patient financial experience.
1. Segment patients by ability and propensity to pay
When accounts go into collections, it can be challenging for staff to know which accounts to prioritize. However, with a tool like Experian Health’s Collections Optimization Manager, providers can deploy predictive analytics that scan and segment patient accounts. Using credit, behavior and demographic data, Collections Optimization Manager applies a proprietary propensity-to-pay score to each account. This segmentation makes it easy for staff to quickly identify which accounts to prioritize, write off or refer to a third party.
2. Identify coverage and financial assistance early
Coverage discovery tools allow providers to identify missing or secondary insurance early on. With solutions like Experian Health’s Coverage Discovery®, active benefits are automatically confirmed at registration, along with eligibility for financial assistance. Coverage Discovery also updates coverage in real time after care is received, so information remains accurate during billing and collections.
Patient Financial Clearance takes this a step further by helping providers run their presumptive charity process, which estimates a patient’s Federal Poverty Level percentage (FPL%), to identify those who qualify for greater financial assistance.
3. Use automation to streamline collections workflows
Automation in patient collections helps create more efficient workflows throughout the process. For example, Collections Optimization Manager uses machine learning to segment and prioritize patient accounts automatically. This allows providers to easily tailor communication and payment options to better meet individual patient needs — delivering a more personalized financial experience.
4. Improve patient communication and payment experience
Today’s patients want more transparency around their financial responsibility, increased access to providers and more convenient payment options. Digital tools, like Experian Health’s Patient Payment Estimates, allow providers to automatically generate and digitally send patients more accurate estimates based on real-time data, such as insurance benefits and contracted payer rates.
Tools that improve collections workflows, like Collections Optimization Manager, also allow providers to deliver more personalized, patient-centric collections communication based on their propensity-to-pay scores. Providers can also send automated billing text reminders or emails with secure payment links using tools like PaymentSafe® or offer flexible payment plans that allow patients to split the cost of larger medical expenses over time.
Tracking patient collections success
By monitoring key performance indicators like collection rates, accounts receivable days and patient feedback, providers can continue to fine-tune their patient collections processes. Collections Optimization Manager captures this data in user-friendly dashboards and reports, so staff can assess their performance against their own history and industry trends. Users also benefit from expert support from Experian Health consultants, who help teams evaluate reports and recommend the right collections strategies at every step.
Looking forward: Optimizing patient collections with technology
Technology-based solutions for patient collections enable healthcare organizations to deliver a better financial experience for patients and maximize revenue. Solutions that use automation, like Experian Health’s Collections Optimization Manager, make it simple for providers to improve and streamline collections from start to finish – ultimately reducing time to payment and the risk of bad debt.
FAQs
Technology-based solutions, like Collections Optimization Manager, help healthcare organizations improve the patient collections process through automated screening and segmentation models, enabling healthcare providers to increase recovery rates and reduce wasted time and resources. These solutions also arm providers with powerful propensity-to-pay scores to better prioritize accounts.
Common roadblocks in patient collections include an increased financial burden on patients due to the cost of care, ever-changing payer policies, missing or outdated coverage information, inaccurate patient estimates and a lack of payment options. Many providers also struggle with patient account segmentation and delivering effective billing communication.
Find out more about how Experian Health’s suite of patient collections products helps providers boost collections, cash flow and patient satisfaction.
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