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Medical Account Receivables And The Default Problem

Medical Account Receivables And The Default Problem

All medical providers who deal with patients and billing understand that there must be a certain percentage built into the predictions and estimations of revenue each quarter that will never be collected due to default.  What this means is that a certain percentage of the patients that are treated and receive medical help will never pay their bills for one reason or another.  The reasons for the default on payment may vary from a case against another individual being lost to personal bankruptcy, but the end result is always that the medical provider is not paid for their services, and may even lose money due to supplies and treatment costs that were provided.  The majority of medical providers will attempt to minimize these default percentages by picking and choosing to treat patients who have riskier circumstances than others, which ultimately reduces the pool of potential patients significantly, thus making it difficult to sustain operations in some cases as there are simply not enough patients who can pay out of pocket and up front for services.  In order to gain more patients to treat, medical providers inevitably must take on more and more risk of default by treating patients who have less and less likelihood of paying.  While a certain amount of default can be compensated for, the “perfect storm” situation always looms present, where multiple patient defaults happen causing the practice or facility to fall short of available cash and a difficulty in paying their own expenses.

Figuring out ways to expand the patient base into riskier situations while still maintaining an acceptable level of default percentage is a balancing act that requires an accounting and billing team that spends much of it’s time in collections activities.  The ultimate answer would be to somehow increase the ability to guarantee payments for accounts, allowing the staff to concentrate efforts on things other than collections, reducing the exposure to the “perfect storm” and allowing new patients to be treated without having to consider their ability to pay out of pocket quite so closely.  Accepting a new patient should not require this much consideration, and now Med Care Solutions is providing exactly that, guarantees of payment for services and an ability to reduce collection risks and defaults.  Through their “medical account receivables financing programs” Med Care Solutions purchases existing accounts receivable that are currently aging on the books and requiring time and effort to be collected, as well as allowing for the future accounts receivable associated with approved accounts to be paid for within days.  There is no repayment penalty if the accounts that are purchased by Med Care Solutions end up in default, thereby allowing the provider to treat patients without first considering if they “fit the risk profile.” Med Care Solutions assumes the risks associated with collections and brings the default percentage that is built into your books down to zero, meaning that the “perfect storm” of too little cash flow to cover your own bills is never experienced.  The default problem has been solved.