When patients see healthcare providers, the billing process follows shortly thereafter. Generally, insurance providers determine how much they’ll cover, with the remainder as patient financial responsibility. And when patients can’t pay their bills, the result is bad debt providers have to write off.
Uncollected patient financial responsibility, made worse by rising deductibles and coinsurance amounts, has caused physician bad debt to increase significantly.1 From 2021-2022, patient financial collection rates fell to 47.8%; patients owed roughly $1.1 billion out of more than $5.5 billion in total payments received.2
For practices, collecting less than half of what was owed resulted in a ~$600 million shortfall. Approximately 53% of total bad debt write-offs in 2023 came from insured patients with self-pay being the largest source of practice debt. While patient collections rates have decreased, the claim dollar amount has been increasing. Patient payments also decline as their costs go up, with patients less inclined to pay medical bills above $500.2
But self-pay can be a practice’s strongest revenue source with the right patient AR optimization and resolution partner who specializes in after-insurance adjudication.
Increased Bad Debt and Staff Burden
Rising patient AR impacts practices’ bottom lines on multiple fronts. In addition to driving up physician bad debt, it also increases operating costs significantly.
In a recent survey of 230+ group practices conducted by the Medical Group Management Association, with 60% of respondents from independent practices, administrative overhead accounted for over 25% of healthcare spending.3
To address increased administrative efforts, 40% of practices have three or more full-time staff per physician to help with administrative and regulatory-related tasks.3 In addition to greater financial burden, growing administrative demands contribute greatly to physician burnout, increases the workload on existing staff, and can compromise the patient experience and the overall quality of care.
Practices that rely on a patient AR optimization platform that resolves balances after insurance can improve patient AR performance without adding administrative burden. PatientFocus is an extension of the revenue cycle, helping ensure patients understand what they owe while making the payment process more convenient.
Taking the Pains Out of Patient Pay
Today’s customers have high expectations of the businesses they interact and transact with, and healthcare is no exception. Customer satisfaction hinges on simplicity. For healthcare, that means making billing statements easier to understand, from what patients owe to how to pay it.
Meeting patients where they are is central to PatientFocus’ success. PatientFocus optimizes the account reconciliation process with patient pay solutions that are easy on patients and practices alike. With a robust full-service suite, including an online payment portal, branded statements with QR codes, direct drop voicemails, text-to-pay, and convenient quick pay options, we’ve helped increase patient pay revenue by 40% while reducing days in AR by 28%, with an average patient payment turnaround that’s under 11 days.4
We further elevate the patient financial experience through real support including a bilingual call center and omnichannel assistance 24/7/365, so that patients get the help they need when they need it, without adding administrative burden or impacting the quality of care.
Want to elevate your patient billing satisfaction and improve your bottom line? Let’s talk!
Sources
- American Medical Association. “Managing Patient Payments”. https://www.ama-assn.org/practice-management/claims-processing/managing-patient-payments
- Taylor, Mariah. “Patient Collections Fall to 48%”. Becker’s Hospital Review. February 29, 2024. https://www.beckershospitalreview.com/finance/patient-collections-fall-to-48
- Medical Group Management Association. “MGMA 2026 Regulatory Burden Report.” April 9, 2026. https://www.mgma.com/getkaiasset/8c7263b8-882d-4f6a-8d6c-48180fba72c9/MGMA%202026%20Reg%20Burden%20Report%20.pdf
- Internal data on file.