Patient repayment rates to hospitals declined after COVID-19

Patients increasingly aren't paying their medical bills, according to a recent study of hospital revenue cycle management data.

The study recently published in JAMA Health Forum analyzed billing and patient data from patient accounts at over 200 U.S. hospitals between 2018 and 2024. The data revealed a declining trend in patient repayment of hospital bills, with a more significant reduction in repayment after the COVID-19 pandemic.

The data represented 24.5 million and 6.2 million patient episodes of care with positive patient out-of-pocket liability for individuals with private insurance and Medicare Advantage, respectively. It also covered hospital and physician services within inpatient and outpatient settings.

Of the patient episodes of care studied, nearly 70% had positive liability, meaning patients owed some money to the hospital for care they received. The monthly average liability owed per person per episode was about $375 for individuals with private insurance and $172 for those with Medicare Advantage.

From January 2018 through February 2020, mean repayment rates were approximately 54% for both privately insured and Medicare Advantage patients. Those rates then started to decline among both groups, the study found.

For privately insured patients, mean repayment rates for visits in 2023 were about 14.3% lower than in 2021. For those with Medicare Advantage, the rate declined by almost 17%.

What's more, repayment rates followed a similar pattern when the study examined repayment within a year of the visit or discharge.

But mean repayment rates rarely described the true patient experience, the study stated. Instead, upwards of 90% of patients privately insured or covered by Medicare Advantage either pay all or nothing of their medical bills. The decline in repayment rates toward the end of the study's period was also driven by a larger share of patients paying nothing versus paying a smaller portion of the amount owed on their bills.

Patients were also less likely to pay their hospital bills when they were higher. For example, repayment rates among the privately insured for bills over $1,000 were generally under 35% versus about 50% for bills about $100. Medicare Advantage enrollees tended to do the same, although repayment rates were even lower for larger hospital bills.

However, the study noted an exception with the smallest hospital bills represented. Repayment rates were lower for bills under $50 (45% among the privately insured) than for bills between $50 and $299 (52% to 46%). Among those on Medicare Advantage, repayment rates were lower for bills under $100 (44%) versus bills between $100 and $399 (52% to 47%).

The study also noted higher repayment rates for outpatient episodes versus inpatient episodes, which partially reflected the trend among smaller bill sizes.

Researchers theorized that recent declines in patient repayment rates could be linked to higher hospital prices for services, especially in the face of high-deductible health plans. The study showed a sharp rise in patient liability in January when deductibles typically reset. The way medical debt is treated could also be to blame, they said.

In 2023, the three largest credit reporting agencies -- Experian, TransUnion and Equifax -- removed unpaid medical bills from consumer credit reports if it has an initial reported balance of less than $500. The agencies also increased the time before unpaid medical collection debt appeared on credit reports from six months to one year.

The Consumer Financial Protection Bureau (CFPB) followed suit, issuing a rule in January 2025 banning all medical debts from credit reports. The Trump Administration, however, challenged the rule and a federal court blocked it from taking effect.

CFBP estimated the rule would remove $49 billion in medical debt from the credit reports of about 15 million Americans.

With consumer protections in place during the study's period, patients may have pushed off repayment to hospitals, researchers stated. They also said that the administrative burden of collecting medical debt, especially the smallest bills, may not have been worth it for providers, leading to less repayment.

The unpaid medical bills may represent a modest portion of expected revenue, researchers added, but this trend could prompt more upfront patient collection strategies when feasible. Declines in repayment rates would also affect provider-payer rate negotiations, with hospitals seeking higher rates from payers that tend to have higher cost sharing.

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.