A revenue cycle advisory memo from our VP of Revenue Cycle Management, Samantha Cable.

Every year, physicians expect January to be slow because deductibles reset. That part is predictable. What most practices don’t realize is that deductibles are only one piece of the cash-flow puzzle.

The bigger, more overlooked drivers of the Q1 slump are:

Lost working days and delayed payer activity.

These two factors reduce encounters, stall claim volume, and slow payout cycles, all before your team ever posts a charge. When you understand these patterns, you can prepare for them instead of being surprised year after year.

Here’s what your practice needs to know heading into 2026.

1. Deductibles Reset But That’s Not the Whole Story

Yes, patients owe more in January.
Yes, insurance pays less until deductibles are met.

But even if patient responsibility stayed the same, most practices would still see lower collections. That’s because cash flow in Q1 is driven less by patient balances and more by the operational realities of the calendar.

Fewer days open = fewer encounters = fewer claims = fewer payments.

2. Working Days Directly Control Visit Volume and Revenue Velocity

Every lost working day removes:

• Dozens of appointments
• Multiple procedures
• Thousands in charges
• Tens of thousands in downstream collections

Here’s how 2025 and 2026 stack up:

Working Days Comparison: 2025 vs. 2026

Why this matters:

When January starts with fewer days and specific payer holidays (MLK Day, Presidents’ Day), practices enter Q1 with a smaller pool of claimable encounters and slower payment cycles to match. Even the strongest billing teams can’t overcome the math.

3. Payer Delays Make the Q1 Dip Even Steeper

January and February bring systemic slowdowns across commercial payers and government plans:

• Holiday claim backlogs
• Fewer processing days
• Reduced payer staffing
• Slower posting
• Delays around MLK Day and Presidents’ Day

This means even perfectly coded, clean claims take longer to pay.

Your cash flow in Q1 is a lagging indicator of:

• November visit volume
• December claim submission timing
• Early-January payer behavior

Once you see the pattern, it becomes completely predictable.

3.5. Provider and Staff Vacation Days Add Another Layer of Revenue Loss

PTO taken in November, December, and early January has a bigger impact than PTO in any other months because these visits pay out during the slowest part of the year.

Fewer provider clinic days in these months mean:

• Fewer encounters
• Fewer procedures
• Lower overall charge volume

And holiday PTO for front-office and billing staff often leads to:

• Slower check-in
• Delayed authorizations
• Missed eligibility checks
• Fewer scheduling follow-ups

Together, these reduce the number of clean claims that can go out before year-end, which directly shrinks January and February collections, when payers are already moving slower than usual.

4. Your Q1 Revenue Is Determined in November and December

Our VP emphasizes this point: “If you want a strong Q1, you have to prepare in Q4.”

That includes:

• Pushing claims out before holiday slowdowns
• Tightening authorization workflows
• Running early eligibility checks
• Improving point-of-service collections
• Filling schedule gaps before the holidays
• Planning staffing coverage proactively

Practices that prepare see stable Q1 revenue. Those that don’t feel the downturn for 8–10 weeks.

5. How Peregrine Helps Practices Protect Q1 Cash Flow

For more than 20 years, Peregrine has helped practices anticipate seasonal swings instead of reacting to them.

Our team supports:

• Working-day and payer-cycle forecasting
• Deductible-reset planning
• Strengthening December verification + authorization workflows
• Increasing year-end claim velocity
• Monitoring payer delays in real time
• Training teams on high-deductible patient collections
• Planning for 2026 coding, regulatory, and payer rule changes

Plus an overlooked factor:

2026 has two “three-payroll months”: May and October.
Practices with biweekly payroll will feel higher cash outflow in those months… something to plan for when forecasting and budgeting.

You can’t change the calendar but you can change how well your practice is prepared for it. 

Want a clearer forecast for 2026?

Request your complimentary revenue cycle audit: 877-463-1110
Peregrine Healthcare. Trusted by Physicians Since 2001.