Most providers offer their own payment plans. What do those plans cost?

Who this is for

This is for the physician or medical professional who owns a plastic surgery practice, dermatology practice, or med spa that lets patients pay over time. The owner may be a physician, nurse, physician assistant, or other clinician. It is also for the operations lead who sets payment terms, chooses a patient financing company, and follows up on overdue balances.

What we found

A practice that offers its own plan carries three burdens. It risks patients who stop paying, spends staff time on collection, and waits for its cash. In a 2025 survey of healthcare finance staff, default rates on in-house plans longer than 12 months were higher than 20%. Default here means patients stopped paying, regardless of reason. Outside lenders charge the practice a fee on each financed case instead. Sunbit advertises a fee as low as 1.9%, and a comparison site lists CareCredit's at 5% to 14%.^1,2,3

The federal Truth in Lending Act is relevant for a practice's own plan under certain conditions, such as a finance charge or more than four installments by written agreement.⁴

How common are provider payment plans, and how do patients say they would pay?

Payment plans are close to universal. The Healthcare Financial Management Association (HFMA), a trade group for finance professionals in healthcare, ran a 2025 survey. It polled more than 200 such professionals. Only 7% of the providers surveyed had no payment plan offering for patients.¹

Some patients would choose a provider's plan over a card. KFF (the Kaiser Family Foundation, a health policy research nonprofit) and the Los Angeles Times surveyed adults with employer-sponsored insurance in 2019. They asked how these adults would pay an unexpected medical bill. About half expected to go into some kind of debt. Of the adults surveyed, 27% planned to put the bill on a credit card and pay it off over time. A smaller group, 17%, planned to arrange installments with the provider. One in six (16%) reported they could not pay such a bill at all.⁵

Practices have been tightening their terms, too. In February 2021, the Medical Group Management Association (MGMA), the trade group for medical practice administrators, polled practice leaders. Of those leaders, 27% said they had changed their patient payment plan policies in the past year. The group reports that many practices were working to collect more at the time of service and were requiring down payments for surgical procedures as a prerequisite to using payment plans.⁶

What does carrying a payment plan in-house cost a practice?

An in-house plan leaves the practice holding balances some patients never pay, and the staff time to chase them. In the same 2025 survey, providers collected just 24% of patient billings. Patient billings here means what patients owed after any insurance paid, as with the patient's share of a mixed case, where insurance covers part of a procedure and the patient pays the cosmetic part.¹

PayZen built a model of what internal plans cost. It presented the model to the trade group's Louisiana chapter in 2023. On its slide of the all-in cost of payment plans, it puts the default rate for such plans at 20% to 30%. It puts their administrative cost at 6% to 8%. The same slide describes the staffing burden on the provider as "significant." PayZen offers an alternative to these plans, and its presentation says that "doing what's best for patients leads to improved financial outcomes for providers."⁷

A 2022 presentation to that chapter used a made-up example. It worked through "ABC Hospital," a hypothetical provider carrying $1,000,000 ($1M) in internal payment plans. It counted three costs: the cost of capital, servicing, and bad debt. The cost of capital is the price of having money tied up while patients pay. Bad debt is the share of balances never collected. The example's inputs are a 36-month term, $5 a month to service each account, an 8% cost of capital, and 20% of balances never collected. On those inputs, the imputed cost of carrying the plans came to 47.3% of the $1,000,000 total.⁸ The same example puts it at 29.9% for a one-year term and 25.2% for six months.

Most of the data available describes hospital-based cases, where many bills arrive after care is given. We'd argue an elective cosmetic case at a private practice allows for more control. The fee is presented before surgery, typically after the consult, and is often reviewed with a finance manager. The practice also decides how much to collect before the patient is treated. Those choices help shrink the balance an installment plan carries and limit the practice's risk, but they don't remove it. On our reading, a practice learns its own default rate and collection hours only by tracking its own plans, and that data is rarely published.

What do patient financing companies charge a practice instead?

A patient financing company charges the practice a fee on each financed case, and the rate depends on the company and the plan. A merchant fee is the share of each financed sale that the practice pays the lender. Sunbit advertises to dental practices a fee "as low as 1.9%." It says the rate is held consistent regardless of the terms of the patient's plan.²

Sunbit's page also prices its competitors. It says CareCredit's 0% APR (annual percentage rate) promotional plans "commonly carry merchant fees of 10%+." It adds that Cherry and others set the fee by credit score tier. The page then works through a $3,000 case: at Sunbit's lowest rate, its fee comes to $57, and for the competing plans the page lists at least $300, which is 10% of $3,000.²

Cherry's own comparison page lists its merchant fee at 1.7% to 13.9%. The page promises "lower merchant processing fees with savings as much as 50%."⁹ Unsurprisingly, Cherry's published range and Sunbit's description of Cherry's fees differ. We lean toward trusting Cherry's own website, but clinic owners and patients should check the terms for themselves.

A site that compares vendors for dental practices, Practice Signal, lists CareCredit's merchant fees at 5% to 14%. The site lists Sunbit's approval rate at 87%, as reported by the company. Here, an approval rate counts the portion of applicants a lender approves. It lists Cherry's at 80% or more, also as reported by the company.³ On our reading, a patient a lender turns down may still ask the practice for a plan of its own, so approval rates from vendors don't account for how many cases end up in-house. For more about what these lenders charge patients, including deferred interest, see patient financing.

When does a practice's own payment plan fall under the Truth in Lending Act?

A practice's payment plan falls under federal lending rules when it meets all four conditions in Regulation Z. Regulation Z is the bureau's rule under the Truth in Lending Act (TILA), the federal law on consumer credit terms and disclosures. Section 1026.1 lists them: credit is offered or extended to consumers, and it is offered or extended regularly. It must carry a finance charge or be payable by written agreement in more than four installments. It must also be primarily for personal, family, or household purposes.⁴

Section 1026.4 defines a finance charge as the price of credit.⁴ A patient paying for their own cosmetic procedure is borrowing for a personal purpose, the kind of credit the bureau's 2023 report describes: medical credit cards that "used to be restricted to paying for elective procedures," and one card, Alphaeon, that can only be used for certain elective procedures.¹⁰ So for a practice's own plan, the deciding conditions are usually the finance charge and the number of payments. On the rule's text, a plan of four or fewer payments with no finance charge falls outside it. Adding interest, or a fifth scheduled payment, brings it in.⁴ Whether a given practice extends credit regularly is a question for its counsel.

The bureau applied the same line to lenders in its 2023 report on medical credit cards and financing plans. It called these "point-of-sale installment products," meaning credit offered at checkout at the clinic or office. The report says products with five or more payments, or with interest charges, fall under TILA and Regulation Z.¹⁰

We would start with three steps for your practice. First, keep any plan you carry yourself short, since the 2025 survey reported its high defaults on plans past 12 months. That length decides which cases stay in-house and which go to a lender. Second, before you add interest or a fifth payment, take the design to your counsel, because either change can bring the plan under TILA. Third, when a lender turns a patient down, ask that patient whether a plan from you would be welcome and keep the case. Those answers, set beside each lender's fee quote, tell you whether carrying your own plan is worth its cost.

About this review

We read 10 sources in October 2026. They were two CFPB documents (the Regulation Z text and a 2023 report), one HFMA survey write-up, and two HFMA Louisiana chapter presentations. The rest were one MGMA poll write-up, one KFF survey, two financing company pages, and one vendor comparison site. Each data point stays with the publisher that reported it, and no number combines data points from two publishers.

HFMA's 2025 survey polled more than 200 healthcare finance professionals at providers. The Louisiana chapter presentations date from 2022 and 2023: one is a PayZen model, and the other is a worked example for a made-up hospital. MGMA's poll asked practice leaders in February 2021. The KFF and Los Angeles Times survey covers US adults with employer-sponsored insurance in 2019. The Sunbit, Cherry, and Practice Signal pages date from 2026.

Fractional Aesthetics is a growth strategy practice for aesthetic medical businesses.