The Valuation of Distress: Why Your AR Strategy Is Failing the “Bank Test”
If you are sitting in the CFO’s office or managing a revenue cycle today, you know the math has stopped making sense. You are operating in an environment where the “cost of caring” has fundamentally broken its correlation with reimbursement.
We are seeing labor costs that are 26% higher than they were four years ago. Drug costs are up 10%. Meanwhile, Medicare is paying you roughly 83 cents for every dollar you spend delivering care. You are effectively subsidizing the federal government from your own dwindling reserves.
But the real crisis isn’t just on the expense line—it’s in your Accounts Receivable (AR). The asset that is supposed to be your source of liquidity has become a liability.
At Nexa, we don’t just look at collections as “chasing money.” We look at it through the lens of Asset-Based Lending (ABL). We know that in 2025, your AR isn’t just a pile of bills; it’s the collateral that determines your borrowing power. And right now, that collateral is deteriorating.
Here is why the old playbook is obsolete, and how we are helping hospitals and medical practices recover liquidity when others can’t.
1. The “Ineligibles” Trap: Why Banks Are Devaluing Your AR
When you go to a bank for a line of credit, they don’t look at your “Gross AR.” They look at your Net Realizable Value (NRV). They are stripping out everything they consider “ineligible.”
In 2025, the definition of “ineligible” has expanded aggressively.
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Aged AR: If your receivables are sitting over 90 days, lenders often value them at zero.
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Cross-Aging: This is the silent killer. If a specific payer (or patient class) has too much debt over 90 days, lenders may “cross-age” the entire bucket, freezing your liquidity.
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The “Toxic” Self-Pay Layer: With 39% of the workforce now on High-Deductible Health Plans (HDHPs), the first $5,000 of care is owed by the patient, not the insurer. Collection rates on these balances have dropped below 48%. Lenders know this, and they are slashing advance rates against self-pay AR.
If you are holding onto these accounts hoping they will pay “eventually,” you are hurting your balance sheet. You need a partner who cleans these aging buckets aggressively to restore your borrowing base.
2. The Regulatory Minefield: Compliance is Asset Protection
The days of bullying patients into payment by threatening their credit score are over.
In January 2025, the CFPB finalized rules effectively banning medical debt from credit reports. But the state-level risks are even higher. Look at California’s SB 1061: if your admission contracts don’t have specific disclosure language, the debt can be legally deemed void and unenforceable.
If your current agency is still operating like it’s 2015—using aggressive threats or failing to update their compliance per state—they aren’t just failing to collect; they are actively destroying your assets.
We operate in all 50 states and Puerto Rico. We understand the nuances of New York’s collection limits, Washington’s charity care requirements, and California’s disclosure laws. We treat compliance as a form of asset protection, ensuring that every dollar we recover is safe from clawbacks or litigation.
3. The Nexa Strategy: Protecting Reputation & Margins
We built our model to solve the two biggest complaints in the industry: high costs and patient abrasion.
Most agencies want to charge you a high contingency fee (30-50%) from day one. That means if a patient just needed a nudge to pay a $1,000 deductible, you are losing hundreds of dollars unnecessarily.
We use a smarter, hybrid approach that most of our clients adopt to maximize results:
Step 2: The Fixed-Fee “Nudge” (Cost Efficiency)
For early-stage accounts, we offer a Fixed Fee service that costs roughly $15 per account.
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We execute a rigorous, compliant sequence of five contacts.
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This acts as a “soft” collection effort. It looks and feels professional, preserving the patient relationship.
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The Benefit: If the patient pays during this phase, you keep 100% of the revenue. You don’t pay us a percentage. This is perfect for that “HDHP” demographic that has the money but just put the bill in a drawer.
Step 3: Contingency Recovery (The Heavy Lifting)
For the stubborn accounts that don’t respond to Step 2, we seamlessly transition them to Step 3: our Contingency Service.
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We charge a standard 40% fee—and only on what we collect.
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If we don’t recover the money, you pay nothing.
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This is where we deploy our intensive skip-tracing and negotiation teams to recover aged bad debt.
Why This Matters Now
Your reputation is your lifeline. In a digital world, a 1-star Google review from an angry patient can hurt your search traffic and patient volume. We are proud to be highly rated on Google because we treat patients with dignity. We function as an extension of your business office, not a “debt collector.”
You are facing a perfect storm of inflation, denials, and regulatory pressure. You cannot afford to let your AR age out.
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.