Hospitals Strengthen Patient Financial Engagement, but Health Plan Complexities Continue to Challenge Collections
Hospitals and health systems across the United States are making measurable progress in improving financial engagement with patients, particularly at the point of service. However, despite stronger upfront collection efforts and enhanced patient payment strategies, overall reimbursement collection rates remain largely unchanged. According to a recent analysis of proprietary data from Kodiak Solutions, increasingly complex health plan cost-sharing arrangements and delays in claims adjudication by payors are offsetting many of the gains healthcare organizations have achieved.
The findings, published in Kodiak Solutions’ June 2026 benchmarking report, highlight the growing challenges hospitals face as patients assume greater financial responsibility for their healthcare expenses. While revenue cycle teams have become more effective at collecting payments before or during care, confusion surrounding insurance obligations and slower claims processing continue to create barriers to successful reimbursement.
Improvement in Point-of-Service Collections
One of the most encouraging findings from the report is the improvement in point-of-service (POS) collections. Comparing the first quarter of 2026 with the same period in 2025, POS collections accounted for 24.82% of total patient payments, up from 22.74% a year earlier. This increase of more than two percentage points reflects healthcare organizations’ growing ability to engage patients financially at the time of service.
The improvement was driven by stronger collection performance across multiple payer categories, including commercial insurance plans, Medicare Advantage, and traditional Medicare. Hospitals have increasingly adopted digital payment tools, pre-service financial counseling, cost-estimation technologies, and flexible payment options that help patients understand and fulfill their financial obligations earlier in the care journey.
Healthcare providers recognize that collecting payments before or at the time services are rendered significantly improves the likelihood of reimbursement. As a result, many organizations have invested heavily in modernizing their revenue cycle operations and creating a more transparent financial experience for patients.
Patient Responsibility Remains High
The report also found that overall patient responsibility remained relatively stable, although it declined slightly year over year. In the first quarter of 2025, patients were responsible for 23.28% of allowable claim amounts. By the first quarter of 2026, that figure had decreased marginally to 22.99%.
Although the reduction is modest, patients continue to shoulder a significant portion of healthcare costs through deductibles, co-payments, coinsurance requirements, and other out-of-pocket expenses. High-deductible health plans and increasingly sophisticated cost-sharing models have made it more difficult for patients to determine exactly how much they owe and when payment is expected.
For many patients, uncertainty about healthcare costs remains a major obstacle. Even when hospitals provide estimates, final balances can vary depending on insurance adjudication outcomes, network status, and benefit structures. This uncertainty often delays payment decisions and complicates collection efforts.
Collection Yield Shows Little Progress
Despite stronger point-of-service collections and a slight reduction in patient responsibility percentages, overall patient collection yield failed to improve.
According to Kodiak Solutions’ analysis, collection yield declined slightly from 30.59% of the self-pay portion of claims after insurance in the first quarter of 2025 to 30.07% during the same period in 2026.
Collection yield measures the percentage of patient financial responsibility that providers successfully collect after insurance processing. The decline suggests that while hospitals are securing more payments upfront, they continue to struggle with collecting balances that remain after claims have been processed.
This trend underscores the growing complexity of healthcare reimbursement. Revenue cycle teams may be succeeding at the front end of the payment process, but downstream challenges continue to limit overall financial performance.
Complex Cost-Sharing Arrangements Create Confusion
According to Matt Szaflarski, Vice President of Revenue Cycle Intelligence at Kodiak Solutions, the increasing complexity of health plan designs is a major factor contributing to stagnant collection performance.
Many insurance plans now include layered deductibles, varying coinsurance percentages, tiered provider networks, and other intricate benefit structures. While these arrangements are designed to share costs between insurers and patients, they often make it difficult for patients to understand their financial obligations.
As a result, patients may delay payments because they are unsure whether they have received a final bill, whether insurance has completed processing, or whether additional adjustments may still occur. This uncertainty can reduce collection effectiveness even when hospitals have implemented strong patient engagement programs.
Hospitals increasingly find themselves not only delivering care but also serving as financial educators, helping patients navigate a highly complex insurance environment.
Claims Processing Delays Compound the Problem
In addition to complicated benefit designs, slower claims adjudication by payors is creating further challenges.
Claims adjudication is the process through which insurance companies review, validate, and determine payment responsibility for submitted claims. When adjudication is delayed, patients often receive incomplete or conflicting information regarding their financial obligations.
Longer processing times can postpone billing cycles, increase patient confusion, and make collections more difficult. Patients may be reluctant to make payments while waiting for insurance decisions, especially if they believe additional coverage adjustments could occur.
Kodiak’s analysis also notes that higher denial rates continue to disrupt reimbursement workflows. When claims are denied, providers must invest additional time and resources in appeals, corrections, and resubmissions. These delays can significantly extend the period between care delivery and final payment collection.
Medicare Advantage Continues to Present Challenges
The report also highlights ongoing differences between traditional Medicare and Medicare Advantage programs.
Hospitals continue to experience a persistent gap in bad debt levels associated with Medicare Advantage plans compared with traditional Medicare. Industry observers have frequently pointed to more complex authorization requirements, increased administrative processes, and varying payment policies among Medicare Advantage insurers as contributing factors.
These challenges often result in delayed payments, additional documentation requirements, and higher administrative burdens for healthcare organizations. Consequently, providers may face greater difficulty collecting patient balances associated with Medicare Advantage claims.
As enrollment in Medicare Advantage plans continues to grow nationwide, addressing these reimbursement challenges is becoming increasingly important for hospitals and health systems seeking financial stability.
Strategies to Improve Financial Engagement
Despite the challenges identified in the report, Kodiak Solutions believes healthcare organizations can take additional steps to improve patient collections while maintaining a positive patient experience.
One key recommendation is to introduce payment plans earlier in the patient journey. During inpatient stays or outpatient procedures, patients are often more engaged with their care and more receptive to discussions about financial options. Presenting structured payment plans during this period can increase participation and improve collection outcomes.
Healthcare organizations are also encouraged to frame financial conversations around affordability rather than collections. By focusing on available payment options and financial support programs, providers can reduce patient anxiety and encourage timely payments without creating friction.
Another recommended strategy involves leveraging benchmarking data to identify departments, service lines, or patient populations where payment plan adoption is lower than expected. Targeted financial engagement initiatives can then be deployed to improve participation and collection performance in those areas.
Keeping Patients at the Center
Ultimately, Kodiak Solutions emphasizes that successful revenue cycle management requires balancing organizational financial goals with patient needs. As healthcare financing becomes more complex, providers must continue developing strategies that support transparency, affordability, and patient understanding.
While hospitals have demonstrated significant progress in point-of-service collections, broader industry challenges—including complicated cost-sharing arrangements, slower claims adjudication, and increasing denial rates—continue to affect overall reimbursement performance.
By strengthening patient financial engagement, improving communication, and offering flexible payment solutions, healthcare organizations can better navigate these challenges while ensuring patients remain at the center of the financial experience.
As hospitals and health systems adapt to an evolving healthcare landscape, maintaining this patient-focused approach will be critical to sustaining both financial health and quality care delivery in the years ahead.
About Kodiak Solutions
Kodiak Solutions is a leading technology and tech-enabled services company that simplifies complex business problems for healthcare provider organizations. Over the past two decades, our team created and developed our proprietary net revenue reporting solution, Revenue Cycle Analytics. Kodiak also provides a broad suite of software and services in support of CFOs looking for solutions in financial reporting, reimbursement, revenue cycle, risk and compliance, and unclaimed property. Kodiak’s 450 employees engage with more than 2,300 hospitals and 375,000 practice-based physicians, across all 50 states, and serve as the unclaimed property outsourcing provider of choice for more than 2,000 companies.
