The 7 Stages of Patient Billing Maturity: A Strategic Framework for RCM Leaders

As healthcare margins tighten and patient responsibility increases, revenue cycle management (RCM) depends on effective patient billing: a high-complexity, high-stakes component of healthcare operations.

To maintain a strong financial position despite shrinking payment windows, revenue cycle leaders must evolve from the basics--sending paper statements at 30/60/90 days and sending the majority of A/R to collections--to a modernized, mature workflow for RCM and patient billing.

This Patient Billing Maturity Model is a proven roadmap for healthcare leaders to modernize collections and improve the patient financial experience. Use this model to assess your patient billing maturity, RCM technology gaps, and opportunities for optimization.

The Patient Billing Maturity Model

Below are the stages of patient billing technological maturity, from zero processes (stage 0) to advanced, modernized, and tech-enabled (stage 7). This guide assumes that more advanced stages build on the ones that come before, i.e. an organization that has achieved stage 6 of billing maturity has the elements of stage 5, 4, and so on.

Stage 0: Focused on Payers, Not Patients

Description: The provider does not bill patients. Once insurance pays, patient balances are written off.

Analysis: This is rare, but it still exists, especially for providers that expect almost all revenue to come from insurers.

At this stage, no patient responsibility is collected.

Stage 1: Paper Statements & Pray

Description: After insurance adjudicates the claim and patient responsibility is calculated, the practice waits for the next monthly paper statement batch run (up to 30 days) and mails the patient a bill. These statements may be confusing, fragmented, or hard for patients to parse.

After 30 days, providers often follow up with another bill--and after another 30 days (at the 60 day mark), usually try again. After the next 30 days (90 day mark), the balance is written off as bad debt. This is commonly known as the 30/60/90 day cadence.

Analysis: This approach means frequent delays between rendering services and billing patients for those services, aka high days in A/R (days to pay). Paper statements can get lost or misplaced, resulting in poor patient visibility and high write-offs. Avoidable delays and bad debt lead to cash flow problems, putting pressure on tight operating margins.

Improvements at this stage:

• Introduces a basic mechanism to bill patients instead of automatically writing off balances.
• Some staff time is dedicated toward patient billing
• Establishes a repeatable but rigid 30/60/90 cadence for follow-up.
• Creates at least some record of patient A/R and patient payments.

Remaining gaps: Stage 2 introduces the patient billing function (at least giving patients the option to pay) but it lacks any pursuit of patient responsibility.

• No digital engagement: all communication depends on physical mail reaching the patient.
• Significant lag between service and first bill, keeping days in A/R high.
• Statements are often confusing, hard to reconcile, and not patient-friendly.
• No self-service tools, no payment plans, no card-on-file, no autopay.
• No segmentation nor personalization; every patient gets the same letter at the same intervals. Paper mail costs often reach sizable totals.
• Relies on staff to handle exceptions; lack of easy access to billing information means questions go unanswered and staff are overburdened with patient billing support.

Stage 2: eStatements & EHR-based A/R

Description: In addition to triggering paper statements every 30 days out of the EHR, the practice leverages functionality (typically from the EHR) to send an eStatement via text and/or email. The eStatement contains a link to the patient portal connected to the EHR, which requires patients to set up an account, download an app, and keep track of a username and password to log in. Messaging is relatively generic and standardized, e.g. "Attention: you have a new eStatement from ABC Medical. Please login to view and submit a payment here.” After the eStatement goes out, the provider’s finance/HR/patient support teams are responsible for patient collections, billing support, and follow-up communications.

Analysis: Leveraging digital channels marks a huge leap forward. Over the past 10+ years, patients have grown to appreciate, and often prefer, digital statements over paper. Case in point: the use of eStatements as the primary method for patient collections increased 243% from 2016-2024. While a huge stride forward, status quo user experiences (UXs) still tend to be clunky and adoption tends to be low (concentrated among the most tech-literate patients). When compared to the average non-healthcare consumer journey, EHR-generated eStatements lag behind expectations for modern payment experiences. Moreover, EHRs typically enable only basic rules in automations.

Going digital casts a wider net, but practices at stage 3 still suffer from huge A/R lag.

Improvements vs. stage 1:

• Moves statements closer to where patients spend time: mobile phones and email inboxes.
• Introduces basic portal-based online payment instead of checks by mail only.
• Resources become more dedicated to patient billing at this stage: more staff time is typically allocated to patient billing, which enables employees to gain expertise on managing A/R, and data is unified in the EHR, making it available for analysis.
• EHRs typically offer rudimentary digital engagement options (IVR/phone, email, text) to supplement paper, improving reach and timeliness, and transparency.

Remaining gaps:

• EHRs are built to move and store patient data, not for billing.
• High friction: portal logins, app downloads, and forgotten passwords create drop-off.
• Messaging is still generic; no personalization, segmentation, nor tailoring by balance or patient profile.
• May be lacking features that you need for your specialty, payer mix, or patient population.
• Lacking support options for patient billing issues.
• Heavily batch-based: typically no real-time nor event-driven outreach.
• Collections work remains manual, staff-driven, and inefficient (phone calls, voicemails, ad-hoc follow-up for exceptions).
• Limited or no support for modern options like self-enrolled payment plans, card-on-file, or autopay.
• Zero or limited pre-service or point-of-care financial experience; billing is still mostly post-service and reactive.
• Portals and fragmented statements still create confusion and billing support staff burden.

Stage 3: Early-Out Vendors & Bad-Debt Collections Agencies

Description: At this stage, the practice outsources components of patient collections to a services vendor, which takes on the burden of following up with the patient for payment. “Younger” patient balances (e.g. under 60 days old) are sent to an “early-out” partner, relying primarily on phone calls placed by live agents, who call repeatedly and leave messages to encourage the patient to pay. Some vendors also leverage texting and email. Older patient balances, typically those over 90 days, are sent to a “bad-debt” collections agency, which utilize these same tactics—and are even more aggressive by reputation.

Analysis: Outsourcing patient collections work reduces the burden on RCM and A/R teams, and ensures that the work at least gets done. However, both early-out and collections vendors eat deep into margins on every dollar they collect. Repeated manual follow-up via a call center is labor-intensive, and outsourced human agents lack tribal knowledge that often makes in-house representatives far more effective. Further, these vendors can damage patient trust through repeated phone calls and threats of recourse (lowered credit score, etc).

Improvements vs. stage 2:

• Reduces in-house manual collections workload by shifting it to a vendor.
• Introduces a more structured collections process for aging balances.
• Sometimes adds additional communication channels (live calls, vendor-generated texts/emails).

Remaining gaps:

• Practices typically pay 15% or more of every dollar collected by agencies. This very high cost-to-collect impacts margins.
• Outsourced vendors don’t care about the provider’s brand and patient experience, and can sour patient relationships with repeated phone calls and text messages, which many patients perceive as harassment.
• Practices lose control. Tenured billers usually know their own patient populations best and can inform optimal strategies. This is wasted when patient A/R goes to a services vendor.
• Limited self-service, automation, or smart routing; efforts are focused on “chasing” rather than preventing A/R.
• Patients are often confused as they are handed off to a separate entity.
• No systemic improvements in transparency, estimation, nor ease of payment—only more follow-up.

Stage 4: Dedicated Billing Engagement Automation

Description: Unlike legacy workflows, dedicated patient A/R automation platforms are built to mirror how patients actually behave. This technology orchestrates omnichannel outreach (text, email, voice, portal, paper) from a pre-determined playbook, with the ability to shift channel, cadence, and messaging dynamically based on what’s happening in real time. To deliver this, the platform must directly integrate with the practice’s EHR/PM system. The engine is rules-based and configurable to any EHR/PM datapoint.

It can launch the next best action off virtually any event (some examples):

• New balance posted
• Statement drop
• Missed payment
• Coverage change
• Returned mail
• No response after X days

And it can also leverage any structured datapoint pulled from the EHR/PM system:

• Language spoken
• Age
• Geography
• Visit type
• Payer
• Balance type
• Prior payment behavior
• Communication preferences

With mission-built patient A/R automation, teams can prioritize empathy and support where needed while accelerating resolution where the path to payment is clear. Under the hood, it’s a unified platform that normalizes and aggregates data across EHRs and PM systems into one operational view, with modern analytics and interfaces that make it easy to see performance, segment by cohort, test interventions, and prove ROI--without living in spreadsheets.

Analysis: A best-in-class A/R automation layer extends the EHR: it uses EHR/PM data as the source of truth, but adds the orchestration, personalization, analytics, and omnichannel execution needed to consistently move balances without staff chasing exceptions.

Compared to early-out vendors, advanced A/R automation keeps strategy and learning inside the practice instead of shipping accounts (and patient relationships) out. Best-in-class automation resolves balances earlier, with more context, and with a patient experience that stays aligned to your brand.

Advanced automation is different from “fully owned AI” that makes decisions for the practice. The strongest technology is decision support + technology-powered orchestration, not decision replacement. Your in-house experts already know the nuances: patient demographics, financial policy edge cases, what exceptions matter, when to offer plans, and when to pause.

A platform should let those experts codify and continuously refine that tribal knowledge into rules, triggers, and playbooks—then scale it across every balance automatically. The result is control without manual overload: you get the scale and power of automation, while your team stays the accountable “brain” behind the strategy. Practices thus turn hard-won expertise into a repeatable, measurable profit center rather than outsourcing it or handing it to a black box.

Improvements vs. stage 3:

• Closes gaps and improves efficiency with real-time EHR read/write integration (accurate balances, no manual posting).
• Shifts from manual, call-center-driven collections to automated, event-driven outreach.
• Introduces true omnichannel communication (SMS, email, digital links, sometimes robocall and paper).
• Dramatically shortens time-to-first-notice once patient responsibility is known.
• Provides a modern, user-friendly payment experience independent of the EHR portal.
• Enables self-service payment plans and card-on-file, reducing staff involvement in routine tasks.

Remaining gaps:

• Autopay consent is not yet fully standardized nor tightly integrated into intake workflows.
• Collections are still predominantly post-service; pre-service estimation and collection are limited.
• Eligibility, benefits, and cost estimates may still be fragmented or manual, affecting accuracy.
• While improved engagement clears up much more confusion, staff still shoulder repetitive billing questions.
• If the software vendor only offers this single solution, or limited solutions, the practice risks vendor lock-in (potentially missing later opportunities to resolve other revenue cycle issues).

Stage 5: Best-in-Class Payment Experiences

Description: Patients should have clarity, flexibility, and convenience at every step of their financial journey. At this stage, the provider has pulled every stop to provide the best consumer-grade patient payment experience possible with cutting-edge technology.

Workflows at the front desk, in scheduling, and during intake are intentionally designed to capture autopay consent and store a secure payment method on file so future balances can be charged automatically once they are adjudicated. Point-of-service payment options are embedded into check-in and checkout, with staff able to take payment or enroll patients in autopay or financing at the front desk without jumping between systems.

Preservice, point-of-service, and postservice experiences all allow patients to use the same modern payment methods used everywhere else (and beyond)--credit and debit cards, Apple Pay, Google Pay, tap/contactless options, and HSA/FSA cards.

For patients facing larger balances or high deductibles, the practice offers non-recourse patient financing, allowing them to spread payments over time while the provider still gets paid in full within 24 hours by a financing partner.

After the visit, the practice sends a text or email, the patient taps a link, sees what they owe in plain language, and completes a one-click payment. Payments can be completed with minimal keystrokes (ideally just one) through portal-free, browser-based flows. These rely on lightweight authentication like a one-time passcode or basic demographic verification instead of forcing them through a traditional portal with usernames and passwords. There are no portal passwords to remember, no confusing codes, and no need to call the office.

Statements are designed to feel like a continuation of good care, not a collection event: modern and mobile-friendly. What is owed and why is written in plain language--and details are tied back to visits, insurance payments, and any estimates they saw earlier in the journey. With one tap, the patient can pay in full or explore payment plans and financing options.

Behind the scenes, payments are tightly integrated with the EHR or PM system through a true read/write connection. The payment platform reads real-time balances and adjudicated patient responsibility from the EHR so information surfaced to the patient is always accurate. When a patient pays, enrolls in autopay, or activates financing, those transactions are written directly back to the EHR/PM, eliminating manual posting, reducing reconciliation work, and keeping clinical and financial records aligned. Rules to determine payment plan or financing eligibility are determined by the practice ahead of time to strategically collect the most cash as fast as possible.

Analysis: Over 70% of healthcare consumers under 35 would switch providers for a better healthcare payment experience. When providers offer easy self-service tools, patients are more aware of outstanding balances, more likely to pay, and more engaged in the financial side of their care.

A best-in-class payment experience means every possible payment exception is accounted for. When any type of payment is accepted and transactions can be completed before, during, and after the appointment (even automatically), collections increase, and billing feels like a natural extension of the care journey.

By combining autopay, non-recourse patient financing, portal-free digital flows, and modern payment options, providers can make it dramatically easier for patients to resolve their balances without friction or confusion. Collections increase and days in A/R drop because more revenue is captured at the point of service (or automatically following claims adjudication), and because patients who might otherwise delay or default now have a financing path that doesn’t expose the provider to risk.

Staff benefit from fewer phone calls, less time spent chasing balances, and far less manual payment posting, which can instead be handled automatically through the EHR integration. Patients benefit from clear, timely information and consumer-grade experiences that match what they already expect from retail, banking, and nearly every other industry.

Essentially, this stage aligns healthcare billing with the way people already live and pay for everything else. Adding a best-in-class payment experience closes several big gaps that still exist at the “automated outreach” stage, but some important gaps remain.

Improvements vs. stage 4:

• Moves from “here’s a generic payment link” to a consumer-grade, intuitive payment experience.
• Eliminates dependence on portal logins and paper statements by enabling portal-free, browser-based pay (no app, no passwords).
• Reduces friction through 1-click payment flows that work from any device.
• Adds non-recourse patient financing so patients with higher balances have a realistic way to pay without increasing provider risk.
• Converts many accounts from “we’ll remind you” to autopay-driven, touchless collections with patient consent.
• Transforms collections from chasing the majority of aging patient A/R to fast, first-touch resolution in one or two taps.

What’s still missing:

• Financial conversations are still mostly post-service; patients often don’t know what they’ll owe before the visit.
• Autopay and financing can feel reactive, solving “how to pay” but not fully addressing “what to expect and when.”
• Staff may still have last-minute, awkward money conversations at check-in because expectations weren’t set upstream.
• There may be limited integration with eligibility, benefits, and estimation to drive accurate, trusted pre-service numbers.
• Outreach and education may still be one-size-fits-all, rather than segmented and proactive based on risk or propensity to pay.
• The middle and end of the patient journey is now streamlined, but without improved pre-service workflows, surprise and uncertainty are still baked into the patient financial experience.
• Billing confusion is further reduced, but staff still must manually handle the odd patient call or message when questions arise.

Stage 6: AI-Powered Pre-Service Workflows

Description: The healthcare provider prioritizes pre-visit and point-of-care patient collections. This requires use of an AI-powered platform that offers pre-service tools and digital payment flows.

• Omnichannel agentic AI automates patient scheduling.
• AI-powered estimates: On the backend, provider front desks are powered by agentic AI, which is reading 271s and instantly calculating accurate copays. These estimates are surfaced to the EHR, staff, and most importantly, patients--preventing later surprises.
• Providers can collect at this early stage or enable autopay enrollment to automatically collect downstream balances after claims are processed.
• Modern, digital-first intake & check-in: pre-populate forms with existing patient data from the EHR, reducing redundant data entry and improving accuracy. Patients can complete forms on any device before their visit, saving time. Form responses flow directly back into the EHR, eliminating manual data entry for staff.

This means a faster, more transparent, and more satisfying experience for both patients and front desk staff.

Analysis: Providers in this fully modernized, patient-friendly, and tech-enabled stage of billing maturity maximize their overall collection rate. They have lower patient A/R to “chase” after each visit, and they provide maximum transparency about all patient costs upfront, so patients are not surprised by an unexpected bill after the visit.

Depending on the technology, there may be a few small gaps remaining. But compared to Stage 1, nearly every major structural gap in patient billing has been intentionally addressed and layered in: transparency, timing, technology, and trust.

Improvements vs. stage 5:

• Immense improvement in transparency as patients have much greater cost clarity far earlier in the care journey.
• More cash is collected on day zero.
• Shifts from reactive, post-service collections to proactive, pre-service and point-of-care collections whenever possible.
• Brings eligibility, benefits, estimation, and payment into a single, patient-centric experience before care.
• Boosts autopay enrollment with clearer up-front expectations.

Even at Stage 6, there are some practical constraints:

• Even with upfront clarity, some patients will still struggle to pay in full. If you have yet to optimize payments (stage 5), or lack thoughtful payment plans, financing, and flexible options, you are still missing some revenue.
• If your pre-service platform vendor is different from your payment solution, there is likely friction for your team and patients.
• On the post-service side, staff still manually handle inbound billing inquiries.

Stage 7: End-to-End, AI-Powered Patient RCM

End-to-End Patient RCM

Whether EHR-based or custom-built, many RCM solutions address single workflows within patient billing, and nothing more. These ‘point solutions’ tend to feature quicker, lower-lift implementations and typically cost less than more comprehensive platforms.

However, each new system adds to vendor sprawl, risk for interoperability hiccups, and friction between platforms. Fragmentation also blocks leaders from compiling data and extracting meaningful revenue cycle insights, meaning many providers still see revenue leakage and cash flow problems.

Consider:

• Timing: Timely patient touchpoints directly affect collection success and reduce days in A/R
• Strategy: Streamlined processes and unified data enable clarity on KPIs and RCM staff alignment
• Personalization: Sharing the right information at the right time (pre-, post-, and point-of-service) improves trust and patient satisfaction‍
• Channel Orchestration: Systems integration and omnichannel communication tools remove clunky transitions and interruptions, creating a seamless patient billing process

AI and Innovation

Amid staffing challenges, tight margins, and heavy manual burdens, billing teams are being asked to do more with less.

This final gap is why RCM now demands real innovation. Modern, AI-powered technologies are automating routine work so staff can focus on care.

For example, AI agents can now conduct eligibility and benefits checks and respond to all patient billing questions on every channel, 24/7.

Best-in-Class Patient Billing with Collectly

Collectly is an advanced, end-to-end RCM platform that applies AI and automation to every single step of the patient financial journey. It includes technology covering Stages 4 through 7 in this article.

Able to directly read from and write to any EHR, the platform features AI-powered previsit financial workflows, 1-click/portal-free payments, an AI voice agent for 24/7 patient billing support, and smart patient A/R automation.

It’s currently boosting revenue, reducing the cost to collect, and making patients happier at scale at more than 3,000 healthcare facilities.