Medical Accounts Receivable Financing
In the medical accounts receivable financing industry, which is also known as “medical factoring” the funding company provides to the facility a credit line or outright payment of money that is asset backed. What this means is that the credit line or payment is based on the net realized value of the billings to insurance companies, HMOs, Medicare or Medicade. Depending on the value of these assets, different programs that are available through medical factoring companies will provide options ranging from loans and lines of credit against the assets to outright purchase of the receivables at a discount.
Med-Care Solutions provides our clients with the option of the purchase of their medical accounts receivables, as this option is far more advantageous and secure than programs which are credit-line based. Credit-line types of programs will bear the additional expenses of up-front fees and monthly interest payments, which can become overwhelming if the case takes months or years to settle. Additionally these types of programs are “with recourse,” which means that the principal and interest must continue to be serviced and repaid regardless of the outcome of the case. If no settlement is made in the favor of you or your client, the interest on the load as well as the loan amount itself still must be repaid. This type of program is not advantageous to the medical provider since they shoulder all the risk. Med-Care Solutions is different, and our programs assume 100% of the risk, even in the event of no recovery of the debt. This diverts the risks associated with collections and aging of accounts away from your practice and onto us, as we pay you directly for the assets and then assume ownership over the accounts. These types of programs allow practices to continue providing services without being affected by the long time-frames associated with payment progress. There should never be a need for the practice or surgery center to not have enough cash on hand to continue daily functions while having companies owe money for services you have already provided. Med-Care Solutions assumes all the risks, and you get the rewards of prompt payments.
The financial juggling act of having enough revenue coming in to a practice to sustain the operations that are providing services to those in need at the current time is a delicate one, and will many times become a nightmare as the medical accounts receivables show more than enough revenue to continue operations, yet the timeframes that go by during the collection process create financial difficulty that is unnecessary. No matter what, you need the staff, supplies and building that is going to provide the services to patients today to be covered at all times, because if they are not able to be paid for then you cannot provide services that bring in revenue in the future. Literally a bad month of slow collections on the accounts receivables can put your operation in the position of not being able to cover its own expenses, even though there is plenty of revenue on the books. This is where a bridge is necessary in the form of an outright purchase of the debt, bringing in the crucial immediate funding necessary to keep the doors open and removing the risks of never collecting what is owed to you.
Your practice is not unique in facing the challenges of financial juggling. The long delays between the times you provide your medical services and the time you actually receive payment, coupled with the nightmare of third-party billing and bureaucracy associated with the process creates cash-flow problems in thousands of practices nationwide every day. Businesses just like yours, along with hospitals, nursing homes, durable medical equipment providers, radiology centers, surgery centers and a multitude of other medical businesses face these same issues every day, with medical accounts receivables providing a false picture with regards to success of the practice or business as a whole, simply because it takes longer to collect the debts than you have to pay your own expenses. Medical factoring firms like Med-Care Solutions can give you the peace of mind you need in order to do what you do best, provide medical services to patients. Contact us today to inquire about the programs we offer related to medical accounts receivables.