It happens every year. Providers come back from the holidays and find themselves facing a very predictable revenue crisis. Yet few take steps to get ahead of it.
It’s no secret that insurance deductibles reset to $0 every year on January 1 for the majority of privately insured Americans. This means the financial burden for healthcare sits squarely on patients’ shoulders, and provider organizations without solid strategies for collecting patient responsible balances suffer — a lot.
Deductible season runs from January through May typically, but given that deductibles are set to substantially rise for both ACA marketplace and Medicare Part A patients in 2026, timeframes may lag. Consequently, provider organizations that are not taking steps to get ahead of cash flow issues may find themselves in an even greater crisis than in previous years. This is problematic given that 63% of providers are already challenged by large patient balances, and 43% are challenged by bad-debt associated with patient collections.
It doesn’t have to be this way. For the medical groups that lay the right foundation for patient collections, January is simply business as usual. Here are four ways to get ahead of the inevitable deductible reset.
1. Implement digital billing and digital wallets – Nearly three-quarters of providers say that it takes at least two statements to collect a patient responsible balance. For healthcare organizations still relying on paper-based statements, this can mean prolonged periods of time before patients actually pay their balances.
Also, many patients with recurring appointments can become overwhelmed with growing healthcare debt if multiple paper bills are received over the course of several months. Many patients are simply not prepared to write a check for $500 to $700 at one time for their healthcare.
Digital, real-time billing and payment solutions help overcome these challenges. When patients receive their bills immediately following an appointment by text or email, the total is much more digestible. Plus, they actually prefer to receive digital statements and are more likely to pay their bill by text or through digital wallets, according to industry research.
2. Communicate and collect at time of service – While digital billing and payment speed payment, collecting at the time of service is even better. To do this, providers must be prepared from multiple vantage points.
First, technology infrastructures must support the ability to provide cost estimates via real-time insurance verification. With the right automation in place, capturing patient information and copays accurately via a digital wallet which can be used for future payments can dramatically improve bottom-line performance. Second, medical groups need to have flexible payment plans in place outside of paying in full at the time of service.
Finally, administrative staff must be trained to not only ask for payment upfront but also counsel patients on their payment options, whether payment plans set up on-site before the patient leaves or available financial assistance. Text-based tools for communicating expected copays ahead of an encounter are often more effective. The best tools guide patients to all available options and allow them to make choices without the discomfort of a financial conversation.
3. Move from monthly to immediate post-visit billing – Many providers still issue monthly, consolidated statements. Not only does this decrease the speed of potentially receiving a payment, but it also leads to sticker shock. For example, a patient who comes in for labs and has two separate visits with a physician in a single month prior to a procedure will accumulate a sizable bill by month’s end.
When digital billing and wallets options are available, providers can set up text or email notifications to automatically go out after each visit. This substantially reduces staff burden, and patients pay their bills in smaller quantities on the fly.
4. Stay ahead of backlogs: Run daily or weekly statements and automate reconciliation – Fully automated daily or weekly billing cycles help providers avoid extreme administrative burden at the first of each month. Traditionally, medical group billing teams have operated in a manner where they close the month, generate statements, mail bills and wait for the flood of calls and questions to come in. When statements go out continuously, resources are better managed, and cash flow becomes more predictable.
Also, knowledge is power during deductible season. Automated payment reconciliation, which matches incoming electronic payments from patients to bills, helps medical groups understand cash flow in the moment. It also removes the administrative burden and inaccuracies of manual reconciliation, allowing staff to focus on more high-level tasks.
A more predictable deductible reset
As the industry speeds towards January 1, 2026, the good news is that provider organizations can better prepare for the shift in payment responsibility that comes with the deductible reset. Patient-centric billing medical groups that are built on modern payment infrastructures can vastly improve the ability to collect patient responsible balances in a timely manner, making deductible season easier to manage. Adopting new strategies starts now, though. Providers that wait until the new year will find they are once again unprepared.
Photo: Nuthawut Somsuk, Getty Images
Tom Furr founded PatientPay, a healthcare revenue cycle management platform, based on his experiences with antiquated healthcare billing and payment systems. PatientPay solely focuses on moving healthcare beyond the traditional printed statement, paper check handling, and unused online portals. Prior to founding PatientPay, Tom was the CSO/COO and Board member at MobileSmith Health. He was also a co-founder and president of Kinetics, Inc., an early online commerce provider for small businesses with partners such as Wells Fargo, First Union, and Netscape.
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