With the rise of high-deductible health plans, inconsistent insurance coverage, and increasing healthcare costs, patients everywhere are struggling to cover out-of-pocket costs. 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 — one 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 interest-free short-term 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 a 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 medical 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 balances in a predictable, consistent manner — often upfront if using a third-party partner.
Health Systems Reduce Risk
With more patients able to pay over time, there’s less reliance on charity care/nonprofits, fewer write-offs, and fewer accounts sent to a debt collector. 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 payments, origination fee, or penalties.
- Choose Payment Methods: Patients can typically pay using a debit card, credit card, HSA, or savings account. Many systems offer automated payments and digital payment options 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 in real-time.
In-House vs. Third-Party Patient 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
These are run by external medical loan, personal loan, or medical credit card companies who handle everything from application to repayment terms and debt collection.
Advantages include:
- No responsibility for patient defaults
- Faster payment collection
- Streamlined operations
- Access to more patients — even those with subprime credit
Some providers also support Medicaid, Medicare, and patients without health insurance, further widening your reach.
Finding a Third-Party Partner
Modern 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 solutions that:
- Simplify enrollment with instant approval decisioning
- Serve a wide range of credit scores and borrowers
- Include tools for credit reporting and notifications
- Provide financial assistance programs for those who qualify
Tips for Implementing a Successful Program
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 plans to extended monthly payments — 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 payment portals to digital payment tools — 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. Practices looking to streamline operations can 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.
Who Should Use Payment Plans?
Patient payment plans are ideal for:
- Practices with high-ticket services or large balances
- Nonprofit hospitals offering compassionate billing solutions
- Health systems looking to reduce financial barriers and improve revenue cycle management
- Providers serving low-income populations or uninsured patients
- Practices that experience low treatment acceptance or partial plan acceptance due to cost
- Practices that want to increase their patients’ buying power to access additional treatments/services
- Any organization that wants to improve the overall payment experience
Even if your patients typically pay on time, offering structured payment solutions helps reduce surprises and protect against growing healthcare bills. Payment plans should be easy to integrate into your existing workflow, without disrupting operations or adding unnecessary burden.
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.
Want to see how Cherry’s payment plans can transform your practice? Book a demo today.