Medical Receivables Financing
Medical Receivables Financing
Funding medical receivables instantly reduces inconsistent cash flow created by the insurance industry and third party payors such as HMO’s, Medicare, Medicaid, Blue Cross/Blue Shield and other insurance carriers. Cash is advanced by the funding source (Medical Factor) to a provider of health care services (typically, a physician group or some type of medical center). The funding source then collects payment from third-party payors such as insurance companies and government insurers.
The business of financing implies offering the required cash to a company in order to improve capital. It is a dangerous job in the sense that it is like a loan. Financing might or might not include collateral. A financing set-up without any collateral is riskier than one which has collateral to back-up the money given. When it comes to financing medical receivables, this set-up is in the form of financing with collateral. The collateral for the money offered is the medical accounts receivable.
Like any business, medical institutions need liquidity and a reputable capital to sustain the business. A typical cycle of a medical company would require the payment of wage, purchase of supplies and payment of operating expenses. Given that incurring accounts receivables are inescapable in the business, medical institutions require other sources of funding to support their liquidity. Financing medical receivables is generally the major source of funds of medical institutions. The funding business is crucial to enable these institutions to avoid interruption of their typical business cycle.
One problem in financing medical receivables is that accounts receivables, by nature, varies. Some might originate from the client itself, or an insurance business, or a private business, not always in the insurance company. There is a need to classify the nature of the receivables due to the fact that, in this manner, the funding business can examine the risk it will take in handling the medical institution.
Let s suppose you possess a little to medium company and you depend upon clients paying invoices within a 45-60 day period for your working capital. In essence, you are extending credit like a bank to your consumers. For that time period your cash is tied up in your invoices- your receivables. This restricts development and might produce issues regarding conference payroll and paying your suppliers. Accounts receivable financing is the procedure of offering your invoices for cash as soon as they are provided which enables you to make more effective use of your possessions. Purchase order funding is the process of acquiring a 3rd party’s dedication to pay your suppliers as quickly as clothing are getting from your customers (in advance of payment by you or your customer), based on the surety of an accounts receivable funding plan.
Medcare Solutions can help you with your medical receivables financing. Call 877-909-3111 Today!