Nexa Collections helps hospitals and medical practices recover aging self-pay and patient-responsibility receivables before they get discounted to near-zero on a borrowing base — using HIPAA-aligned, FDCPA-careful practices rather than outdated credit-reporting threats. Accounts are typically worked at a flat $15 fixed fee or 40% contingency, with no fee unless funds are recovered.
Why Aging Receivables Are Becoming a Balance-Sheet Problem, Not Just a Collections One
If you’re sitting in the CFO’s office or running revenue cycle right now, the math is getting harder to make work. Labor and drug costs have climbed faster than reimbursement, and Medicare reimbursed hospitals just 83 cents for every dollar spent on patient care in 2023 — a gap the American Hospital Association has flagged as a persistent, worsening trend, not a one-year anomaly. The accounts receivable sitting on your books were supposed to be a source of liquidity. Increasingly, they’re a line item that needs explaining.
The “Ineligibles” Problem: How Lenders Discount Your AR
When a hospital goes to a bank for a line of credit, the bank isn’t lending against gross AR — it’s lending against Net Realizable Value, after stripping out what it considers uncollectible. Receivables aged past 90 days are often valued near zero. Some lenders “cross-age” an entire payer or patient-class bucket once enough of it crosses that line, which can tighten a borrowing base faster than the underlying receivables actually deteriorated.
The Self-Pay Layer Lenders Don’t Trust
As more employees carry high-deductible health plans, a growing share of a bill is owed by the patient directly rather than the insurer — and self-pay collection rates tend to run well below insurer collection rates industry-wide. Lenders know this and typically apply a steeper discount to self-pay AR than to payer-owed balances, regardless of how collectible any individual account actually is.
Illustrative Example: When a Receivable Line Item Is Worth Less on Paper Than It Looks
Consider a composite scenario: a mid-sized health system carries several million dollars in aging self-pay balances, most under 120 days old and not yet written off internally. A lender reviewing the borrowing base treats a large share of that bucket as ineligible collateral simply because of its age and payer class — not because any specific account has been individually assessed as uncollectible. The gap between what the system believes the AR is worth and what the bank is willing to lend against it becomes the actual problem to solve, not the original unpaid bills themselves.
The Regulatory Landscape Has Shifted Again — What’s Actually True in 2026
The Federal Medical-Debt Credit-Reporting Rule Was Vacated, Not Enacted
The CFPB’s January 2025 rule that would have banned medical debt from credit reports nationwide never took effect — a federal court vacated it in July 2025, at the CFPB’s own request. There is currently no federal law banning medical debt from credit reports. Building a collections strategy around the assumption that credit-reporting leverage is now off the table everywhere would be based on a rule that doesn’t exist.
State Laws Still on the Books — But Under Legal Challenge
That doesn’t mean state law is irrelevant — roughly 15 states, including California, Connecticut, Delaware, Colorado, and New York, currently restrict or ban medical debt credit reporting under their own statutes, and those remain the operative law in those states today. What’s changed is that their long-term durability is now genuinely uncertain: the same court that vacated the federal rule suggested, in non-binding language, that the FCRA preempts these state laws too, and that theory is now being tested in active litigation. A national health system operating across several of these states is dealing with a live legal question, not a settled one.
California’s SB 1061: A Disclosure Clause That Can Void a Debt Entirely
California’s SB 1061 is worth knowing in detail regardless of the federal preemption fight, because its mechanism is unusually strict: any contract creating medical debt entered into on or after July 1, 2025 must include a specific disclosure statement (Civil Code § 1785.27), or the resulting debt is void and unenforceable. This isn’t a penalty layered on top of the debt — it can eliminate the underlying obligation to pay entirely if a single required sentence is missing from an intake or payment-plan form.
Illustrative Example: A Compliance Gap Hiding in an Old Intake Form
Picture a specialty practice with multiple California locations that updated its standard consent forms in 2024 but never touched its separate payment-plan agreement template. Every payment plan signed after July 1, 2025 using that older template is, by the statute’s own terms, void and unenforceable the moment it’s challenged — not because of anything the practice did to the patient, but because of one missing paragraph. Auditing which specific documents actually create a “medical debt” under the statute, rather than assuming a general consent form covers it, tends to be the more useful first step.
A Two-Step Approach Built Around Cost-to-Collect
Most agencies want a high contingency fee from day one, regardless of how old or difficult an account actually is. That means a patient who just needed a reminder about a $1,000 deductible costs the same percentage as an account that needed months of investigation. A tiered approach tends to make more sense for most portfolios.
Step One: A Measured First-Contact Sequence
For early-stage accounts, a fixed-fee service — roughly $15 per account — runs a structured sequence of contacts designed to read as a professional extension of your business office rather than a collections agency. If the patient pays during this phase, you keep 100% of what’s recovered; there’s no percentage taken.
Step Two: Contingency Recovery for Aged or Unresponsive Accounts
Accounts that don’t respond to the initial sequence move to a contingency-based phase — a standard 40% fee, charged only on what’s actually recovered. This is where more intensive skip tracing and negotiation apply, generally to accounts where a lighter-touch approach hasn’t worked.
Illustrative Example: Sorting a Portfolio Before Working It
In a composite scenario typical of a mid-sized practice, a portfolio of a few hundred aging patient balances gets sorted by age and payer class before any outreach begins — accounts under 60 days go through the fixed-fee sequence first, while accounts already past a year move straight to the contingency phase. Working the portfolio in that order, rather than treating every account identically, tends to produce a better mix of recovered revenue relative to cost than a single blanket approach would.
Why Hospitals and Practices Work With Nexa
Compliance Treated as Asset Protection, Not an Afterthought
An agency still leaning on outdated credit-reporting threats, or unaware of state-specific disclosure requirements like California’s, isn’t just failing to collect — it’s creating exposure that can turn a recoverable receivable into a voided one. Every account is worked with current federal and state requirements in mind, updated as the legal landscape around medical debt continues to shift.
Patient Relationships Are Part of the Calculation
A patient today can be a returning patient, or a referral source, next year. Recovery approaches that damage that relationship for the sake of a faster collection tend to cost more than they save over time.
Zero Onboarding Fees & Included Screening
There are no setup costs or hidden monthly fees to place a portfolio, and pre-collection screening — sorting accounts by age, payer class, and likely recoverability — is included rather than billed as a separate service.
Success Stories
The scenarios below are illustrative composites drawn from the kinds of situations that come up repeatedly in hospital and practice receivables, not verified individual case results, but they reflect the actual mechanics of how each type of recovery tends to get resolved.
The Health System Cleaning Up Its Self-Pay Bucket
Problem: A regional health system’s self-pay AR had grown to the point that its lender was discounting a significant share of it as ineligible collateral, tightening the system’s available credit line.
Approach: Nexa segmented the portfolio by age and payer class, running the freshest accounts through the fixed-fee sequence and moving older balances directly to contingency-based outreach.
Outcome: A meaningful share of the aged bucket was resolved within a couple of quarters, and the system had a clearer, more current picture of what was actually collectible going into its next borrowing-base review.
The Specialty Practice and the HDHP Deductible Problem
Problem: A multi-location specialty practice was seeing a growing number of patients with high-deductible plans leave $1,000–$3,000 balances unpaid, not out of inability but because the bill had been set aside.
Approach: A structured, documented reminder sequence — positioned as a routine billing follow-up rather than a collections notice — was run before any account moved to a more assertive phase.
Outcome: A large share of the balances were resolved during the initial sequence, with patients paying the full amount directly and no percentage owed on those accounts.
The Practice Auditing Its California Intake Forms
Problem: A California specialty group discovered, during a routine review, that its payment-plan template hadn’t been updated to include the SB 1061 disclosure language required as of July 2025 — putting a portion of its outstanding balances at risk of being deemed void and unenforceable.
Approach: Nexa flagged the affected date range and worked with the practice to prioritize collection on accounts predating the compliance gap, while the practice corrected its forms going forward.
Outcome: The practice avoided pursuing debt that carried real legal risk, and its updated documentation now protects newer balances from the same exposure.
Industries We Serve
Revenue cycle challenges look different depending on the type of care being billed, and a hospital’s borrowing-base concerns aren’t the same as a dental practice’s patient-payment-plan issue.
Hospitals & Health Systems
Portfolio-level recovery built around how aging self-pay AR affects lending relationships, not just individual account balances.
Specialty & Outpatient Practices
Deductible and copay recovery for HDHP patients who typically have the ability to pay but need a structured, professional nudge rather than aggressive tactics.
Dental Practices
Payment-plan and treatment-balance recovery, with the same attention to state-specific disclosure and compliance requirements that apply to broader medical debt.
Behavioral Health
Recovery handled with particular care given the sensitivity of the underlying records, on top of standard HIPAA-aligned procedures.
Senior Living & Skilled Nursing
Estate and family-representative recovery for balances left after a resident’s care ends, handled with a measured, dignity-first approach.
Emergency & Urgent Care
High-volume, often first-time-patient balances where documentation and prompt, professional follow-up matter more than any single aggressive tactic.
Trust, Security & Compliance
HIPAA & BAA Coverage
Patient billing records carry protected health information regardless of account size or age. Nexa maintains HIPAA-aligned handling procedures for all medical accounts and executes a Business Associate Agreement (BAA) with hospitals and practices that require one.
FDCPA & FCRA Alignment
Every account is worked in alignment with the federal Fair Debt Collection Practices Act and Fair Credit Reporting Act — including current FCRA guidance on medical debt, which is more nuanced today than a simple “banned or not” answer.
SOC 2 Type II & PCI-DSS Data Security
Data handling is SOC 2 Type II certified — meaning security and privacy controls have been independently audited, not self-reported — and payment processing runs at PCI-DSS Level 1, a high tier of card data encryption.
Secure Client Portal for Documentation & Portfolio Tracking
Patient ledgers, aging reports, and account-level documentation are exactly the kind of sensitive data that shouldn’t move through email. A secure client portal lets your team upload documentation, track portfolio status, and monitor recovery progress without exposing patient data to unnecessary risk.
Transparent Pricing
Fixed-Fee Recovery ($15/account)
Ideal for early-stage receivables. Debtors pay 100% directly to you. No commissions.
Contingency Service (40%)
Performance-based recovery. No Recovery, No Fee.
See the full breakdown on the collection agency fee schedule page.
Frequently Asked Questions
Is medical debt currently banned from credit reports federally?
No. The CFPB finalized a rule in January 2025 that would have banned it, but a federal court vacated that rule in July 2025 before it ever took effect. There is currently no federal ban on medical debt appearing on credit reports.
Does that mean state medical debt credit-reporting laws don’t matter anymore?
Not yet, and possibly not at all — it’s genuinely unsettled. Roughly 15 states, including California, Connecticut, Delaware, and New York, currently have their own bans or restrictions in effect, and those remain the operative law today. Whether the FCRA preempts them is being actively litigated, with no final resolution yet.
How does aging accounts receivable actually affect our credit line?
Lenders typically value AR against Net Realizable Value rather than gross balances, often discounting receivables aged past 90 days heavily and applying steeper discounts to self-pay balances than to payer-owed ones. A shrinking “eligible” AR base can tighten a borrowing base even when the underlying receivables haven’t necessarily gotten less collectible.
What does California’s SB 1061 actually require?
Any contract creating medical debt entered on or after July 1, 2025 must include a specific disclosure statement (Civil Code § 1785.27) about the prohibition on credit reporting. Omitting it renders the resulting debt void and unenforceable — a stricter consequence than a typical compliance penalty.
Do you rely on credit-reporting threats to collect?
No — between the federal rule’s vacatur and the roughly 15 states that already restrict it, credit-reporting leverage isn’t a stable foundation to build a collection strategy on. The approach here centers on structured, documented outreach and negotiation instead.
Is patient billing data handled under HIPAA?
Yes. All medical accounts are processed under HIPAA-aligned procedures, with a Business Associate Agreement executed where the engagement requires one.
Clean Up Your Balance Sheet
Inflation, denials, and a shifting regulatory picture aren’t going away, and letting self-pay AR age out quietly tends to cost more than addressing it directly.
Let’s clean up your balance sheet.
Contact us to discuss how we can implement the Step 2 / Step 3 strategy to lower your cost-to-collect and unlock the liquidity trapped in your unpaid bills.