Medical Accounts Receivable
Medical accounts receivable are defined as the inventory of billed services that currently exist on the books of a medical provider. These accounts represent services and treatments that have been performed through the facility, and have been billed through the accounting department to the person or entity that is responsible for payment. Although medical accounts receivable represent money that will eventually be paid to the facility in most cases, the majority of traditional lending situations will not consider these types of accounts as assets that can be borrowed against, due to their uncertain nature. In a percentage of cases the accounts will be remain unpaid and uncollected upon due to default, a negative judgment in a legal case, or a bankruptcy. Because of the lack of certainty that they can be collected, they are generally not able to be utilized as assets that can be borrowed upon as collateral, the way fixed assets like equipment can. This poses a problem for many medical facilities and providers who need expansion capital, due to the fact that they represent a large portion of the cash flow on a month to month basis. A large portion of cash is tied up in medical accounts receivable at any point in time, causing an imbalance many times between the cash on hand and the cash that is owed. Because medical providers cannot usually borrow against what may represent their greatest pool of money, they find it difficult to secure financing in order to expand to the levels necessary to grow their businesses. Alternative sources of funding through firms like Med Care Solutions is the answer to this dilemma.
Med Care Solutions provides medical accounts receivable funding options that utilize only these types of accounts as consideration. Where a traditional loan involves collateral, a medical accounts receivable financing option involves the purchase of the actual rights to collection of the money owed for the past services. As the risk is shifted to the financing firm completely, many medical providers find this type of financing option to be exactly the solution they were seeking in order to secure cash on hand. The medical accounts receivable are purchased outright by Med Care Solutions, who assume all responsibility for collections from the moment of purchase. The payment for the account is transferred directly to the medical provider immediately, working the exact same way as if the payment for the account had been received from the patient themselves. The medical facility is able to utilize this cash for any purpose, and is in no way responsible for repayment if the account is defaulted upon. This type of security in guaranteeing payment is not even available on standard accounts that are paid directly through the patient, as there are always the potentials for default. This guarantee of payment without attached collateral or responsibility beyond the point of signoff allows medical providers to not only access cash, but also structure plans that will guarantee specific amounts of ongoing revenue through reduced risk. Contact Med Care Solutions today to find out more about their medical accounts receivable financing options.