Which entity is compensated based on a percentage of payments received from patients?

The collection agency is compensated based on a percentage of the payments they successfully collect from patients or other entities on behalf of medical providers or facilities. Their primary role is to follow up on outstanding debts and ensure that amounts owed are recovered. Their compensation structure typically hinges on a percentage of the amount they collect, incentivizing them to recover as much as possible.

In contrast, health insurance providers operate on a fixed premium model or negotiate fees with medical providers, which does not directly correlate with collecting payments from patients. Medical providers themselves receive payments based on services rendered, usually predetermined by insurance agreements or patient fees, rather than a percentage of individual payments. The billing department, while essential for managing claims and payments, is typically part of the healthcare provider's operations and does not receive compensation based on collections; they are compensated through salaries or hourly wages. This distinction outlines why the collection agency is the correct choice in relation to being compensated on a percentage basis.