- Flexible payment options benefit everyone: they improve cash flow and reduce bad debt for providers, while making quality care accessible and affordable for patients.
- Patient payment plans come with many options. From lines of credit to BNPL, the right choice for both patients and practices balances cost, risk, and accessibility.
With the rise of high-deductible health plans, inconsistent insurance coverage, and increasing healthcare costs, patients everywhere are struggling to cover out-of-pocket expenses. Even with a good insurance plan, unexpected medical bills — from routine dental care to emergency medical treatment — can strain a household budget and lead to long-term medical debt.
At the same time, healthcare organizations are dealing with more bad debt, rising billing department costs, and complicated revenue cycle management processes. For both sides, the traditional healthcare payment and bill payment experience is broken.
Payment plans offer a middle ground where affordability, transparency, and flexible financing options make it easier for patients to say “yes” to care and healthcare providers to get paid.
What Are Patient Payment Plans?
A patient payment plan is a structured agreement that allows individuals to pay for medical care in smaller installments rather than one large lump sum. These can be set up in-house or managed by third-party lenders and financial services providers.
These plans can range from short-term interest-free options to longer-term loans with low interest rates, depending on the provider and the patient’s credit score.
Payment plans are commonly offered for:
- Medical care not fully covered by insurance
- Services with high deductibles or large copays
- Elective treatments like dental care, cosmetic surgery, or wellness procedures
- Emergency procedures or surprise healthcare bills
In many cases, providers offer payment plans directly in their office or via self-service portals that integrate into the payment collection workflow. These plans simplify the medical bill payment process and reduce the risk of missed or delayed payments.
Who Benefits from Patient Payment Plans?
The traditional model of paying for healthcare — receiving an itemized bill and paying in full — is becoming less realistic. Even patients with a strong insurance plan often face significant medical costs due to high-deductible plans, gaps in coverage, or insurance company denials.
And when patients can’t afford coverage, they can’t get the treatment they need, leaving health care providers struggling to determine how to increase cash flow and working capital with lower acceptance rates. With payment plans…
Patients Pay Easier
Payment plans give people the power to manage healthcare expenses without delaying care. Whether someone is dealing with a large copay, a high deductible, or uncovered medical procedures, payment plans offer much-needed financial help. With the right structure, patients pay for care over time, replacing large one-time bills with manageable installments.
Providers Get Paid Faster
Healthcare practices no longer need to wait for full payments or deal with manual debt collection. Payment plans allow providers to collect patient balances in a predictable, consistent manner — often upfront if using a third-party partner.
Health Systems Reduce Risk
With more patients paying medical bills over time, there’s less reliance on charity care/nonprofit organizations, fewer write-offs, and fewer accounts sent to a debt collector or collection agency. That’s a win for both the patient experience and long-term financial responsibility.
How Do Patient Payment Plans Work?
While every provider may structure plans differently, most follow a common process:
- Determine Eligibility: Patients may need to complete a brief application. Some plans require a credit check, while others assess alternative data outside of credit history, or offer broad approval regardless of credit report.
- Set Up Repayment Terms: The plan outlines how the patient will pay — including total loan amount, number of monthly payments, and any interest charges, origination fee, late fees, or penalties. This becomes your payment schedule.
- Choose Payment Methods: Patients can typically pay using a debit card, credit card, HSA, or a checking/savings account. Many systems offer automated payments through connected bank accounts, and digital payment options like PayPal to make things easy.
- Track and Manage Payments: Through online payment portals or self-service tools, patients can manage their balance, receive notifications and avoid late payments, all without waiting for paper statements.
Is a Payment Plan Right for You?
A payment plan may be a good fit if:
- You're facing a large bill or an upcoming surgery you can't pay for all at once. This is one of the most common reasons patients look into a payment plan for surgery — spreading a big procedure cost into manageable installments instead of one lump sum.
- Your insurance doesn't cover the full cost, or you're on a high-deductible health plan. Gaps in coverage and high deductibles are among the top reasons patients turn to payment plans in the first place.
- You're uninsured or trying to pay your medical bills out of pocket. Self-pay clients often need patient financing options with broad approval criteria, since there's no insurance to offset the cost of care.
- You're on a lower income and need care to fit within a tight monthly budget. Patients from low-income households, or anyone facing financial hardship, benefit most from plans with flexible terms and no large down payment required upfront.
- You want to avoid high interest rates from credit cards or a lump-sum hit to your savings. Look for a zero-interest or no interest option — a structured payment plan can be a more predictable, often lower-cost alternative to charging a big medical bill to a line of credit.
- You need a flexible plan for a large procedure or a smaller balance. Whether it's a high-ticket treatment or a smaller copay, look for terms that can flex to fit the actual size of your bill.
- You want to know your minimum monthly payment before committing. Understanding what you'll owe each month — and for how long — helps you compare options and choose a plan that actually fits your budget.
Even if you typically pay medical bills on time, a payment plan can help you avoid surprises and protect against the financial strain of a large, unexpected healthcare bill.
The rest of this section is for providers deciding how to structure a payment plan program. If you're a patient looking for a plan, see the FAQ below.
For Providers: Choosing In-House vs. Third-Party Payment Plans
You have two main choices when implementing patient financing:
In-House Payment Plans
You control the workflow, eligibility criteria, and loan terms. This gives you direct oversight, but it also means handling everything — from credit checks to communication with credit bureaus and payment collection — yourself. While ideal for nonprofit hospitals or medical providers with robust back-office teams, in-house plans increase operational load and risk, especially if you’re trying to reduce administrative burden.
Third-Party Payment Plans
Third-party payment plans, like Cherry Payment Plans, are run by external medical loan, medical credit card, or BNPL patient financing companies that handle everything from credit checks to payment collection.
Advantages include:
- No responsibility for patient defaults
- Faster payment collection
- Streamlined operations
- Up to 90% approval rate across credit profiles
Some providers also support Medicaid, Medicare, and patients without health insurance, further widening your reach.
Finding a Third-Party Partner
Modern patient payment solutions now include embedded financing tools that integrate directly with your systems. This allows patients to prequalify, choose from different payment methods, and receive an approval decision in real time — all with minimal staff involvement.
These tools also support the goals of the No Surprises Act, ensuring transparent pricing, clearer payment options, and a smoother patient billing experience overall.
Look for patient financing solutions that:
- Simplify enrollment with instant approval decisioning
- Serve a wide range of credit scores and borrowers
- Include tools for credit reporting and notifications
- Integrate with EHR/EMR systems
- Provide financial assistance programs for those who qualify
Tips for Implementing a Successful Program
Rolling out patient financing for healthcare providers takes more than just picking a partner. Here's how to set your program up for success.
Make It Visible
Don’t assume patients know financing is available. Promote your payment plans clearly on your website, social channels, appointment reminders, and in-office signage. Visibility builds trust and ensures patients feel comfortable asking about their options.
Offer Flexible Terms
Every patient’s financial situation is different. By providing a range of repayment terms — from short-term, interest-free payment plans to extended monthly schedules — you improve affordability and make it easier for patients to say yes to care. Tailored options also increase enrollment and treatment acceptance rates.
Offer a Range of Payment Methods
Offering a range of payment methods, from online bill pay to digital wallets, ensures that patients can choose what works best for their situation. Some may prefer paying with a credit card, debit card, or using an HSA, while others benefit more from structured payment plans. The goal is to meet patients where they are, eliminate financial barriers, and make access to care as seamless as possible.
Automate the Process
Automation is essential for reducing the burden on your billing department and helping to cut costs. Practices looking to streamline operations can allow patients to submit their payment information and automate billing reminders, enrollments, and payment tracking with modern platforms. This streamlines your workflow and minimizes missed payments or delays.
Train Your Team
Your staff plays a key role in the success of your program. Make sure team members understand how the financing works, who qualifies, and how to answer common FAQs. When your team can confidently guide patients through the process, enrollment increases and the overall patient satisfaction improves.
Cherry: Better Payment Plans, Better Patient Care
Whether you're a solo provider or part of a large health system, the right payment plan options can improve access to care, reduce bad debt, and streamline operations. With modern payment solutions, providers can now empower patients to take control of their financial health — without sacrificing the quality of patient care.
By partnering with a leading third-party financing provider, you can offer more flexibility, reduce financial responsibility stress for your patients, and ultimately boost both satisfaction and acceptance rates. Head-to-head, Cherry is chosen as the preferred provider of over 80% of practices. Here’s why:
- A 35-second application that doesn’t hurt credit score
- Instant approval decisions
- An approval rate of up to 90%
- Loan amounts up to $65,000
- Terms from 1-60 months
- True 0% APR for qualified borrowers
- No hidden fees
- Upfront payment to practices
- Exclusive approvals (the patient can only use their funds where they were approved)
- The lowest merchant fees in the industry
Find out why providers lead with Cherry at five times the rate of other financing partners like Sunbit, CareCredit, and PatientFi. Book a personalized demo today.