Patient collections have become the defining revenue cycle challenge of this decade. With average out-of-pocket spending per patient rising substantially in inflation-adjusted terms over the past three decades and claim denial rates continuing to climb, the portion of AR that lands on the patient's doorstep has grown too large for legacy paper-statement workflows to recover. Collectly, a San Francisco-based platform backed by $34.2 million in total funding, is purpose-built to solve exactly this problem — automating digital patient billing through personalized text, email, and portal communications to convert balances that traditional billing teams routinely write off.
Executive Summary
- Pyramid Healthcare recorded a 75% increase in patient and client payments within the first two months of deploying Collectly's digital billing system — a benchmark that outpaces typical first-year collection improvements from agency placement by a factor of three or more.
- Collectly now serves 3,000+ healthcare facilities and achieved Epic Showroom listing in July 2026, signaling interoperability maturity and enterprise-grade credibility that closes the gap with larger competitors like Cedar and Waystar Patient Financial Engagement.
- The platform's propensity-to-pay segmentation engine drives personalized digital outreach sequencing — text, email, and portal — before defaulting to paper, reducing cost-to-collect while lifting net patient collections in high-deductible environments where traditional billing teams average sub-20% recovery on self-pay balances over 120 days.
The revenue cycle math has shifted. A decade ago, patient responsibility represented roughly 10–15% of a practice's total AR; today, in specialties like orthopedics, urgent care, and behavioral health, that figure routinely exceeds 30%. The problem is not awareness — billing directors have known this trend was coming — it is execution. Paper statements generate single-digit response rates, collection agency placement burns 25–40% of recovered dollars in contingency fees, and in-house patient call centers are expensive to staff and difficult to scale. Collectly's thesis is that a well-sequenced digital workflow, personalized at the patient level and automated end-to-end, can recover a materially higher percentage of patient AR at a fraction of the cost. The data from early customers supports that thesis.
The Landscape: Patient Ar In 2026
The structural pressure on patient collections did not appear overnight, but the compounding effect has reached a critical threshold for most provider organizations. Rising deductibles, the proliferation of high-deductible health plans (HDHPs now cover more than 50% of covered workers in employer-sponsored plans per KFF's 2024 Employer Health Benefits Survey), and the cascading effect of claim denials pushing more cost to patients have collectively created an environment where even well-run billing departments find their patient AR aging faster than their collection processes can address it. For private practices and medical groups that lack the administrative infrastructure of large health systems, this pressure is existential — not just a line item on a KPI dashboard.
Healthcare CFOs and revenue cycle leaders responding to this environment have three conventional options: invest in additional billing staff, place balances with a collection agency, or purchase a patient financial engagement platform. The first option has a hard ceiling in terms of scalability and adds fixed overhead that does not flex with volume. The second option sacrifices a significant percentage of recovered revenue in contingency fees and carries reputational risk with patients who receive agency contacts. The third option — the category Collectly competes in — is the fastest-growing segment of the RCM technology market because it offers the potential to capture more dollars at lower cost while improving the patient experience simultaneously.
HDHP enrollment among commercially insured workers has grown substantially over the past decade, directly expanding the share of provider revenue dependent on patient collections rather than payer reimbursement. Per KFF's 2024 Employer Health Benefits Survey, 54% of covered workers were enrolled in an HDHP as of 2024.
Practices that rely primarily on paper statements for patient AR are likely recovering less than 20 cents on the dollar for balances over 120 days — a structural problem that no amount of billing staff optimization will fully solve without a digital channel shift.
The regulatory backdrop adds another layer of complexity. TCPA compliance requirements govern how and when providers can contact patients via text message, FDCPA rules apply when collections activity crosses certain thresholds, and HIPAA mandates that patient financial data transmitted through digital channels meet strict security and authorization standards. Any platform operating in this space must navigate all three simultaneously, and the operational burden of staying current with evolving interpretations — particularly around TCPA consent in a healthcare context following the FCC's 2023 one-to-one consent rule amendments — is not trivial. Vendors who have built compliance into their platform architecture are meaningfully differentiated from those who treat it as an afterthought.
How The Platform Works
Collectly's core workflow begins the moment a patient balance is adjudicated and ready for patient billing. Rather than generating a paper statement and waiting 30 days, the platform immediately segments the patient using its propensity-to-pay engine, which evaluates variables including historical payment behavior, balance amount, and communication preference data to determine the optimal outreach sequence. High-propensity patients with a history of digital engagement receive an immediate text message with a secure payment link. Lower-propensity patients or those without prior digital contact may receive a blended sequence of text, email, and portal outreach before a paper statement is generated as a fallback.
The two-way texting capability is one of Collectly's most operationally significant features because it eliminates the call-center bottleneck entirely for a large subset of patient interactions. Patients can respond to a billing text to ask questions, request a payment plan, or dispute a charge — and the platform handles routing, documentation, and escalation without requiring a staff member to be in the conversation loop unless a complex issue arises. This is where the cost-to-collect reduction is most visible: interactions that would previously require a 5–10 minute phone call are resolved asynchronously at near-zero marginal cost.
When configuring Collectly's outreach sequences, prioritize mapping your patient population's prior digital engagement history before setting default communication channels — practices that skip this step and blast text-first to all patients tend to see early opt-out rates that undermine the propensity model's accuracy over time.
Payment plan automation is the second major workflow pillar. Patients who cannot pay in full can self-enroll in structured payment plans through the portal without staff intervention. The platform automates installment scheduling, card-on-file management, default detection, and follow-up outreach when a payment fails. For practices with high volumes of elective or specialty procedures — where patient balances frequently exceed $500 and ability to pay varies significantly — this capability directly addresses the two most common failure modes of traditional payment plans: patients who agree to pay by phone but never follow through, and staff who set up payment arrangements but fail to monitor and follow up on missed installments.
Integration with practice management and EHR systems is handled through bidirectional data exchange that pulls balance data, demographic information, and insurance adjudication results while pushing payment confirmations and plan status back to the PM system for real-time reconciliation. The July 2026 announcement of Collectly's availability on the Epic Showroom represents the platform's most significant interoperability milestone to date, enabling health systems and large medical groups running Epic to deploy Collectly with a pre-built, validated integration rather than a custom build. This materially reduces implementation risk and timeline for Epic customers, which historically have been slower to adopt point solutions precisely because of integration complexity.
Where It Delivers Value
Collectly's ROI case is strongest in three specific clinical and operational contexts. The first is any practice or health system where patient financial responsibility constitutes more than 20% of total AR — a category that now includes the majority of specialty practices, urgent care operators, and behavioral health groups. In these environments, the gap between what traditional billing recovers and what a digital-first platform can capture is large enough that even modest improvement in collection rates generates returns that dwarf the platform's cost.
The Pyramid Healthcare case study is the most concrete published data point: a 75% increase in patient and client payments within the first two months of deployment. This is not a steady-state figure — it reflects the initial surge that occurs when a practice transitions from a low-engagement paper workflow to a high-touchpoint digital sequence. But it illustrates the magnitude of the opportunity that exists in practices that have been underperforming on patient collections not because of patient unwillingness to pay, but because of the friction and delay built into legacy billing processes.
Pyramid Healthcare achieved a 75% increase in patient and client payments within the first two months of Collectly implementation, attributed to the immediacy and transparency of the digital billing workflow.
The second high-value context is elective and specialty procedures with large per-episode balances. A single orthopedic surgery or fertility treatment can generate a patient balance of $2,000–$8,000 depending on plan design. At those balance levels, a personalized digital outreach sequence with embedded payment plan options is categorically more effective than a paper statement, because the patient's primary barrier is not awareness that a balance exists — it is uncertainty about their options for managing a large, unexpected expense. Collectly's ability to present a payment plan offer at the moment of first contact, before the patient has time to disengage, addresses that barrier directly.
The third context is FQHCs and safety-net organizations, where patient financial engagement is complicated by the diversity of coverage types, sliding-fee scale eligibility, and the communication preferences of a multilingual patient population. MCR Health, Florida's largest FQHC network, deployed Collectly to streamline billing operations and improve patient financial engagement — a use case that demonstrates the platform's flexibility beyond high-income, high-deductible commercial populations. The ability to serve both ends of the socioeconomic spectrum within a single workflow is an underappreciated aspect of Collectly's market positioning.
Competitive Positioning
The patient financial engagement market has consolidated around four serious competitors: Collectly, Cedar, Waystar Patient Financial Engagement (formerly Patientco), and Flywire. Each takes a meaningfully different approach to the core problem of converting patient balances into collected revenue, and understanding the distinctions matters when evaluating fit for a specific organization's patient mix, system environment, and AR profile.
| Vendor | Primary Market | Epic Integration | Pricing Model | Key Differentiator |
|---|---|---|---|---|
| Collectly | Medical groups, FQHCs, health systems | Epic Showroom (July 2026) | SaaS + percentage options | Propensity-to-pay segmentation, two-way texting |
| Cedar | Large health systems | Epic App Orchard / native integration | SaaS subscription | Consumer-grade UX, predictive personalization |
| Waystar Patient Financial Engagement | Multi-site health systems | Native Waystar platform | Bundled platform | RCM platform integration, clearinghouse breadth |
| Flywire | Academic medical centers, international patients | Custom integration | Percentage of collections | Large-balance specialization, international payments |
| In-house billing team | All segments | N/A | Fixed labor cost | Process control, payer relationship depth |
Cedar and Collectly are the most direct competitors at the product level, both emphasizing personalization engines and digital-first communication sequences. Cedar has historically targeted large health systems with enterprise contract sizes and a consumer-grade interface that prioritizes brand-aligned patient experience. Collectly's positioning is more accessible to mid-market medical groups and multi-specialty practices that need enterprise-level automation without enterprise-level implementation timelines or price points. The Epic Showroom listing closes one of the most important differentiation gaps Cedar previously held.
Waystar Patient Financial Engagement is most compelling if you are already a Waystar clearinghouse customer — the bundled pricing and unified data model create real switching cost advantages that standalone evaluations will miss.
Flywire wins on large, complex balances — particularly in academic medicine and for international patients — but its percentage-of-collections model becomes expensive at scale for practices with high volume of mid-range balances ($200–$1,500), where Collectly's SaaS-oriented pricing tends to generate better unit economics. Against in-house billing teams, Collectly's most persuasive argument is not replacement but augmentation: the platform handles the routine digital outreach and payment plan automation that consumes a disproportionate share of billing staff time, freeing staff for escalated cases, denial management, and payer relations that require human judgment.
Compliance Questions Digital Billing Raises
TCPA compliance is the most operationally sensitive regulatory issue for any platform delivering text-based patient billing communications. Under the Telephone Consumer Protection Act (47 U.S.C. § 227), healthcare providers must obtain prior express written consent before sending text messages that constitute marketing or solicitation — and for informational healthcare messages, prior express consent (oral or written) is required unless a recognized healthcare treatment-related exemption applies. The FCC's 2023 one-to-one consent rule, which took effect in January 2025, tightened consent requirements by requiring that consent be obtained separately for each sender rather than through blanket multi-seller consent agreements — a change that directly affects how platforms like Collectly must structure patient consent workflows at intake. The line between an informational balance notification and a solicitation for payment has been the subject of ongoing regulatory and litigation attention, and billing directors should not assume that a "patient balance notification" label alone provides safe harbor. Collectly's platform is designed to operate within established TCPA consent frameworks, but billing directors deploying the system must confirm that their patient intake process captures the appropriate consent language and that consent records are maintained in a form that could survive a compliance audit.
FDCPA applicability to healthcare provider billing is a nuanced area. The Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq.) applies to third-party debt collectors but generally not to first-party providers collecting their own debts. However, when a technology platform is involved in the collection workflow, the distinction between first-party and third-party activity can blur depending on contract structure and how the platform presents itself to patients. The CFPB's Regulation F (effective November 2021), which modernized FDCPA implementation rules, explicitly addressed electronic communications including email and text in debt collection — and while it applies to third-party collectors rather than first-party providers, it reflects the regulatory direction of travel that compliance teams should anticipate. Practices should confirm with legal counsel that their Collectly deployment is structured as a first-party billing extension to preserve FDCPA exemption, and that patient-facing communications clearly identify the provider as the sender rather than a third-party collection entity.
Include TCPA express consent language in your patient intake forms — specifically for text-based billing communications — and have your compliance officer review Collectly's BAA and data processing agreement before go-live. Both are standard pre-deployment steps but are frequently deprioritized when implementation timelines compress.
HIPAA compliance in digital billing workflows requires a Business Associate Agreement with Collectly covering the transmission and storage of PHI embedded in billing communications and payment records. The platform's architecture is designed to meet the HIPAA Security Rule's technical safeguard requirements (45 CFR § 164.312) for data transmission, but billing directors should validate encryption standards for text message content specifically — standard SMS (Short Message Service) transmits in plaintext and does not meet HIPAA technical safeguard requirements on its own. Platforms operating in this space use secure link delivery — sending a text containing a link to an encrypted patient portal rather than transmitting PHI or balance details in the SMS body — as the standard compliant approach. Confirm that Collectly's text workflow follows this model and does not transmit PHI in message body text.
Pricing And Roi Analysis
Collectly offers flexibility in pricing structure, with both SaaS subscription and percentage-of-collections models available depending on organizational preference and risk tolerance. The percentage model aligns vendor incentives with provider outcomes — Collectly earns more when collections improve, which is a structurally sound incentive alignment for practices that are skeptical of technology ROI promises. The SaaS model offers more predictable cost structure and better unit economics at high collection volumes, making it the preferred structure for organizations with stable patient volume and a clear baseline of current patient collection rates to compare against.
Model both pricing structures against your current patient collection rate and projected volume before signing — organizations with strong baseline digital engagement may find the SaaS model generates lower cost-to-collect, while those rebuilding from a paper-only baseline often prefer percentage alignment during the initial performance ramp.
ROI calculation for patient financial engagement platforms should account for four variables: the incremental collection rate improvement over baseline, the reduction in cost-to-collect versus the replaced workflow (paper statements, staff time, or agency fees), the reduction in days in patient AR, and the avoided cost of collection agency placement. For a practice placing 15% of patient balances with a collection agency at 30–35% contingency — a standard range for healthcare bad debt placements — the avoided fees alone, if Collectly captures those balances before agency placement, can represent a material fraction of the platform's annual cost. The Pyramid Healthcare 75% payment increase benchmark provides a directional anchor, though individual results will vary based on starting baseline and specialty mix.
At $34.2 million in total funding with Sapphire Ventures leading the Series A, Collectly is capitalized to support continued product development, integration expansion, and customer success infrastructure. For billing directors evaluating vendor stability, this funding profile represents sufficient runway for a 3–5 year platform commitment without the counter-party risk that plagues underfunded point solutions in this space.
The 7 Powers Lens: Collectly Strategic Durability
Evaluating a patient financial engagement vendor solely on current feature set and pricing is a mistake that billing directors have made repeatedly in the RCM technology market — the vendor who wins your implementation slot today becomes the vendor whose switching cost you are managing five years from now. Hamilton Helmer's 7 Powers framework, originally developed for evaluating strategic moats in technology businesses, is directly applicable to RCM vendor selection because it forces an assessment not of what a platform does today but of whether its competitive position is likely to strengthen or erode over time. For Collectly specifically, the 7 Powers analysis reveals a platform with meaningful emerging strengths and a clear strategic vulnerability that buyers should pressure-test before committing.
| Power | Strength | Assessment |
|---|---|---|
| Scale Economies | Moderate | 3,000+ facilities generate data volume that improves propensity-to-pay models, but the cost structure of digital outreach does not create prohibitive unit-cost advantages versus well-funded competitors |
| Network Economies | Weak | Patient billing is not a true network product — a patient's payment experience on Collectly does not improve because other patients are on the same platform |
| Counter-Positioning | Moderate | Collection agency incumbents cannot replicate digital-first, low-cost automation without destroying their contingency fee model; in-house teams cannot match automation scale without proportional headcount |
| Switching Costs | Strong | PM/EHR integration depth, payment plan data, patient communication history, and staff workflow dependency create material switching friction after 12+ months of deployment |
| Branding | Weak | Brand recognition among patients (who see provider-branded communications) and among administrators is nascent at the organizational buyer level versus Cedar and Waystar |
| Cornered Resource | Emerging | Epic Showroom listing and patient propensity data accumulated across 3,000+ facilities represent early-stage cornered resources that competitors must replicate from scratch |
| Process Power | Moderate | Automated outreach sequencing, two-way texting workflow, and payment plan default management embed Collectly's operational logic into the practice's daily billing process |
Switching Costs: The Strongest Power
Switching costs are Collectly's most durable strategic moat, and they compound with deployment tenure in ways that billing directors should understand before they are inside the contract. The integration with PM and EHR systems — now including Epic via the Showroom listing — creates bidirectional data dependencies that are not trivially unwound. Payment plan records, patient communication histories, consent documentation, and reconciliation workflows are all resident within or synchronized to Collectly's platform. Migrating this data to a competing system is technically possible but operationally disruptive, and the risk of payment reconciliation errors during a mid-cycle migration is real enough that most organizations effectively treat it as a multi-quarter project rather than a routine vendor swap.
Beyond data portability, the staff workflow dependency is equally significant. Billing teams that have been operating Collectly's outreach sequencing and exception queue for 12–18 months have rebuilt their daily operational rhythm around the platform's logic. The institutional knowledge of how to configure segments, manage escalation queues, and interpret the propensity model outputs is not transferable to a new platform without retraining and a performance dip during the transition. For organizations that have achieved meaningful collection rate improvement, the prospect of a temporary regression during a platform migration is a powerful retention mechanism — even when a competing vendor presents a compelling feature comparison.
Biggest Strategic Vulnerability: Branding and Enterprise Credibility
Collectly's most significant strategic vulnerability is brand recognition at the organizational buyer level. Cedar and Waystar have accumulated years of enterprise health system deployments that translate into referenceable customer logos, speaking opportunities at industry conferences, and the informal word-of-mouth that drives RFP shortlisting at VP and CFO level. Collectly's 3,000+ facility count is impressive in terms of breadth, but the mix skews toward medical groups and mid-market organizations rather than the marquee academic medical centers and large IDNs that anchor vendor credibility conversations in C-suite budget discussions. The Epic Showroom listing is the single most important milestone in closing this credibility gap, but translating a platform listing into a reputation as the go-to solution for enterprise patient collections will require additional high-profile health system wins and published case study development.
Switching Cost Reality for Buyers
For billing directors evaluating Collectly, the switching