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Medical Accounts Receivables

Medical Accounts Receivables

One of the most sensitive areas of any business is ongoing cash flow, and the availability of funds in order to continue operations in a streamlined manner.  The business of providing medical care, although one based on compassion and the mission to improve the lives of patients through access to the procedures that both save lives and also improve the quality of life, faces the same financial challenges as all other businesses in that if it cannot receive payments for services that have been provided in a timely manner, it cannot continue to provide services to future patients who need it.  The aging of debt that is due for collection is an ongoing problem that medical providers face, and the collection process itself is usually not a positive experience.  Medical accounts receivables are viewed as an asset to a business in that it can be used as collateral to secure loans and financing, provided the accounts receivable themselves are not in bad standing which in most part is determined thru average days out or ADO. An increase in ADO could negatively impact the overall collection ration or Bad Debt ratio since most institutions consider an account uncollectable after 180 days.  .  The medical accounts receivables that are currently on your books have the ability to provide your practice, facility or surgical center with access to much needed immediate cash through their purchase by Med-Care Solutions.

Let’s face it, the longer that a debt is owed the more difficult it becomes to collect, the more it impacts all your  most important assets which is your account receivables and  the more risk is associated with it never being paid at all and ending up in default.  Smart businesses employ provisions that minimize their risk and maximize their upside by partnering with companies like ours who purchase the outstanding debt and provide you with immediate payment, allowing you to no longer wonder if the balances will ever be paid to you, free up your staff time to be placed on more important immediate tasks, and keep your doors open and providing the quality care that is your primary goal.

The most obvious question that is asked by facilities who are exploring alternative funding solutions is “how does this “medical accounts receivables financing” service work, and what can I expect if I decide to participate?”  The process is very simple and involves contacting our representatives in order to find out more specific information regarding the process, but can be simplified by defining “medical factoring.” Factoring is the process of converting outstanding accounts receivable of a medical facility into immediate cash by selling the outstanding debt invoices to a “factor” like Med-Care Solutions at a discounted rate.  Through our purchase of your debt, you no longer bear the risks involved with defaults as that risk is shifted to us.

As outstanding medical accounts receivable age, it becomes more difficult to collect them.  Although they are considered an asset of your business, many medical providers fail to consider factoring as a method of streamlining cash flow because they do not understand how it is differentiated from conventional loans.  When a medical facility needs money to cover payroll, buy new equipment or expand to provide better treatments, they will typically only consider a business loan to do so, which is a difficult process because equity financing is generally harder to find than debt financing.  Even if access to this type of financing is available, the process is invariably a lengthy one that is quite confusing, frankly most financial institutions don’t understand it.  The medical factoring process assesses the strength of your accounts receivable instead of your financial statements, and gives you the ability to not take on more debt as a business in order to get access to that much needed financing.  You are simply selling your medical accounts receivable as you would any other asset of your business.

Exploring alternative financing methods is a wise move for any small business, and in the medical field access to financing options is crucial to the prolonged success of the facility.  Providing services that save lives at the time when patients need it is your main objective, and providing payments to you for those services that you have provided is ours.  As your financing partner, we understand your business and the risks associated with it.  As your source to funding, we view your business just like you view your patients, as an entity with needs that cannot wait, and should be available when they are needed.  Contact Med-Care Solutions today through our website or by calling our representatives directly, and find out about the programs that can provide you with the capital you need.

Dr. Kamran Abdo