How to collect patient balances: estimates, check-in, statements and payment plans

What is patient collections?

Patient collections is the work of turning the share of a visit the patient owes into money in the bank. That share comes in four forms: the deductible, the coinsurance, the copay and the full charge for a patient with no coverage. Each one reaches the practice by a different route and at a different time, and each one has rules about how much you may ask for.

This guide is part of the Remitwright billing guides. It runs in the order a balance is created: the remittance line that makes it, the patients you cannot bill, the estimate before the visit, the payment at check-in, the statement, the payment plan, and the point where an account leaves the practice. For the 2026 picture on deductibles specifically, see collecting patient balances after the 2026 deductible jump.

Medicare shows why the timing matters. The Part B deductible is $283 in 2026, up from $257 in 2025¹, and after it is met the patient usually pays 20 percent of the cost of each covered service¹⁰. A January visit and a June visit for the same patient can leave very different balances.

Where does a patient balance come from?

A patient balance comes from the payer’s remittance, line by line: the patient owes only what the payer assigns to patient responsibility on the 835, not the contractual or payer-initiated adjustments around it. On the 835, every adjustment carries a group code, and X12 keeps four current ones: CO, OA, PI and PR¹¹. Only one of them, PR for patient responsibility, describes money the patient owes.

Two posting errors produce bad statements. A CO amount posted to the patient produces a bill the patient does not owe and a complaint you deserve. A PR amount posted as a write-off throws away money the patient does owe. The PR-1 page walks through posting the deductible line.

Which patients can you not bill, or bill only in part?

Some patients owe nothing beyond a set cost share, whatever the payer paid. Find them before you send a statement, because a statement to the wrong patient can be a compliance problem rather than a customer service one.

Medicaid patients. A state Medicaid plan must limit participation to providers who accept the agency’s payment, plus any deductible, coinsurance or copay the plan requires, as payment in full. The same rule says a patient’s inability to pay does not cancel their liability for that cost share, and lets a provider deny services for unpaid cost sharing only where 42 CFR 447.52(e) allows it¹.

Medicaid managed care members. Each plan must protect its enrollees from liability for covered services the plan does not pay you for, and from amounts above what they would owe if the plan covered the service directly². A plan denial for a covered service is a dispute with the plan.

Qualified Medicare Beneficiaries. People in the QMB group have no legal obligation to pay Part A or Part B deductibles, coinsurance or copays for Medicare-covered items and services, and federal law bars Medicare providers from billing them for that cost sharing³. CMS reminded Medicare Advantage plans in 2024 that the prohibition has applied since 1997 and covers QMBs enrolled in Medicare Advantage and other Part C plans too⁴. CMS also notes that its July 2015 study found QMBs were still being billed wrongly³.

Build the table into your practice management system as account flags. A flag that blocks the statement run is worth more than a training session nobody remembers.

What must you give uninsured and self-pay patients before the visit?

You must give uninsured and self-pay patients a good faith estimate on a federal timetable that runs from the day the service is scheduled or the day the patient asks, and the rule covers both patients with no coverage for the service and insured patients who choose not to have a claim submitted⁵.

The estimate has required content: the patient’s name and date of birth, a plain-language description of the main service, an itemized list of expected items and services with their service and diagnosis codes and expected charges, each provider’s name, NPI and TIN, the location, and notices that it is only an estimate, is not a contract and can be disputed⁵.

The dispute right is what makes the estimate a collections issue. A patient whose bill from one provider comes in at least $400 above that provider’s expected charges on the estimate can start the patient-provider dispute process², with a notice postmarked within 120 calendar days of receiving the first bill⁶. While a dispute is open, the provider must not send the bill to collections or threaten to, must stop collection if it has already started, and must suspend late fees⁶. Your statement system needs a hold flag for this, too.

How do you estimate the patient’s share before an insured visit?

Estimate the patient’s share before an insured visit from the eligibility response, not the fee schedule: the 271 gives the plan’s deductible and how much is left, the coinsurance percentage and any copay by service type, your contracted allowed amount tells you what the payer will price the visit at, and the estimate is the arithmetic between the two.

Tell the patient it is an estimate and why it might change, then write what you told them in the account. When the remit arrives and the PR amount differs, the note explains the statement.

What should you collect at check-in?

The copay, any balance already on the account, and the estimated share where your payer contracts and financial policy allow it. Collect it under a written policy the patient sees before the visit, so the front desk is applying a rule rather than making a judgment call at the counter.

Do not turn the policy into a habit of waiving. The OIG’s special fraud alert on routine waivers of Medicare Part B copayments and deductibles says a provider who routinely waives them is misstating its actual charge, and may also face anti-kickback liability. The alert allows forgiving a copayment for a particular patient’s financial hardship, but says that exception must not be used routinely, and that otherwise a good faith effort to collect must be made⁷. Among its warning signs are advertising “Medicare accepted as payment in full”, routine use of financial hardship forms, and collecting only from patients with supplemental insurance⁷.

The civil monetary penalty rules draw the same line. A waiver of coinsurance or deductible is not treated as remuneration when it is not advertised, is not routine, and follows a good faith finding that the patient is in financial need or a failure to collect after reasonable collection efforts⁸. Write that test into your hardship policy word for word, and keep the record of each decision.

How should statements and follow-up run?

Send a statement only after the remittance has posted and the patient share is final, and make it readable without a call.

Every statement should show:

• the date of service and the provider seen;
• what was billed, what insurance paid and what was adjusted off;
• the amount the patient owes and why, in words: “deductible”, “coinsurance”, “copay”;
• how to pay, including online;
• a phone number answered by someone who can read the account.

Then write the follow-up schedule into the policy: when the first statement goes, how many reminders follow, when a person calls, and when an account is reviewed for a payment plan, a hardship decision or collections. Apply it to every account the same way. An uneven schedule is how practices end up with the routine waiver pattern the OIG describes, without anyone meaning to.

How do payment plans and hardship decisions work?

Payment plans trade speed for certainty, so they work when the terms are set once, in writing, as the balance that qualifies, the minimum monthly payment and the longest term, and are then offered to any patient who meets them and recorded on the account.

Expect them to show up in your numbers. The AAFP notes that payment plans that extend the time patients have to pay can raise days in A/R, and suggests putting all payment plan accounts in a separate account, treated like their own payer, so you can decide whether to count them in days in A/R¹². That separation also tells you whether plans are being paid.

Hardship is a different decision from a payment plan. A plan collects the full balance over time; a hardship waiver forgives part or all of it. Make each hardship decision for one patient, from evidence of financial need, under the same written test^7,8. A stack of signed hardship forms with no financial information behind them is one of the warning signs the OIG lists⁷.

When does an account go to a collection agency?

When your written policy says so, and not before every earlier step has run. Check the account against the flags first: no Medicaid or QMB cost sharing beyond what is allowed, no open good faith estimate dispute⁶, no balance waiting on a secondary payer.

Know what changes when it leaves. The AAFP points out that accounts sent to a collection agency are written off current receivables, and that their revenue may not be counted in days in A/R, so it recommends calculating days in A/R both with and without collection revenue¹². Read the two numbers together, or a busy collections month will look like an A/R improvement.

The agency you hire is collecting in your practice’s name as far as the patient is concerned. Under the Fair Debt Collection Practices Act, third-party debt collectors may not use deceptive or abusive conduct; the FTC’s examples include contacting debtors at odd hours, repeated calls, threatening legal action that is not intended, and revealing the debt to other people¹³. Choose an agency whose methods you would be comfortable defending to your own patients.

Worked example · hypothetical

Worked example: a family practice prices a Medicare patient’s January

This is a hypothetical example; the allowed amounts are invented and the arithmetic ignores any other payment adjustment.

A family practice sees a Medicare patient twice in January and once in March. Each visit has an allowed amount of $150. The patient has met none of the 2026 Part B deductible of $283⁹, and after the deductible pays 20 percent¹⁰.

Worked example: a family practice prices a Medicare patient’s January

Visit	Allowed amount	Applied to deductible	Patient’s 20 percent	Patient owes	Deductible left
January 6	$150.00	$150.00	$0.00	$150.00	$133.00
January 27	$150.00	$133.00	$3.40	$136.40	$0.00
March 10	$150.00	$0.00	$30.00	$30.00	$0.00

The front desk can give the patient that table at the first visit: $286.40 across the first two visits, then $30 a visit. If the patient has a Medicare supplement, the eligibility check for the secondary comes first, and the patient’s share may be the supplement’s to pay.

Now change one fact. The eligibility response shows the patient is a Qualified Medicare Beneficiary. Every figure in the “Patient owes” column becomes zero, because QMBs have no obligation to pay Medicare deductibles, coinsurance or copays³. QMB is a Medicaid eligibility group through which the state pays Medicare cost sharing⁴, so the practice bills that cost sharing to the state program under its rules, and the account flag stops any statement from going to the patient.

Which numbers show whether patient collections work?

Four numbers, read monthly, show whether patient collections work: patient A/R by aging bucket, the share of patient balances paid at or before the visit, payment plan accounts on their own line, and statements returned as undeliverable. Patient A/R by aging bucket shows whether balances are getting old. The share of patient balances paid at or before the visit shows whether estimates are happening. Payment plan accounts on their own line show whether plans are being kept¹². And statements returned as undeliverable show whether registration data is right.

Then check the result against the practice’s overall collection performance. The AAFP’s benchmark for the adjusted collection rate is 95 percent at minimum³, and patient balances that are never collected count against it.

Where does a dedicated biller fit?

A biller who owns patient balances posts the PR lines correctly, keeps the account flags current, runs the statement cycle and answers the calls. Remitwright provides patient billing support through dedicated billers who work remotely in your practice management system, under your financial policy and in your practice’s name.

Footnotes

1. CMS’s fact sheet gives the 2026 Part B deductible as $283, an increase of $26 from $257 in 2025⁹. ↩

2. Under 45 CFR 149.620, “substantially in excess” means total billed charges by a provider or facility at least $400 more than that provider’s or facility’s total expected charges on the good faith estimate⁶. ↩

3. The AAFP gives the adjusted collection rate as 95 percent at minimum, with an average of 95 to 99 percent and the highest performers at a minimum of 99 percent¹². ↩

Checklist

Patient collections checklist

1. Write a financial policy that covers estimates, check-in payments, statements, payment plans, hardship and collections.
2. Map every PR adjustment to the patient and every CO adjustment to a write-off in your posting rules.
3. Flag Medicaid, Medicaid plan and QMB patients so the system cannot send them a statement for amounts they do not owe.
4. Give uninsured and self-pay patients a good faith estimate inside the federal timing rules.
5. Run eligibility before the visit and record remaining deductible, coinsurance and copay.
6. Build each estimate from the contracted allowed amount, not your full charge.
7. Collect the copay and any known balance at check-in.
8. Send a statement only after the remittance has posted and the patient share is final.
9. Put the date of service, what insurance paid and a phone number on every statement.
10. Offer payment plans on written terms that apply to every patient the same way.
11. Decide hardship waivers one patient at a time, in good faith, and keep the record.
12. Never send an account to collections while a good faith estimate dispute is open.
13. Report patient A/R by aging bucket, with payment plan accounts on their own line.

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