Medical Receivable Funding dramatically reduces the inconsistent cash flow created by the insurance industry
and other third-party payors and provides you with operating capital
48 hours after submitting claims and it puts no debt on your books!
Doctors and Hospitals around the country are finding out that this is
the preferred way to stabilize cash flow, get access to unlimited working
capital and reduce income that is written off or sent to collections.
The current
adverse financial structure of the healthcare industry has placed hospitals,
medical groups, private practitioners and other providers in a perilous
position. Cumbersome and bureaucratic third party billing systems with
long time-to-collection waiting periods have resulted in inconsistent
cash flows and limited capital for growth.
Nationwide,
two-thirds of physicians work in practices that are set up as small
business. Payment cuts 18% over four years, together with soaring malpractice
premiums and other overhead costs, have threatened to put such practices
out of businesses. More than 50% of doctors have deferred plans to
purchase much-needed new equipment, and 30% either have laid off staff
or are planning layoffs in the near future.
Q. Isn’t Medical Receivables Funding similar
to a bank loan?
No. Unlike
a bank loan, Medical Receivables Funding provides debt-free immediate
access to unlimited working capital.
Q. If Medical Receivables Funding is so effective in producing
solid, dependable cash flow, why haven’t I heard of it before?
Factoring
(advance funding of receivables) is one of the world’s oldest methods
of increasing working capital for business, but has only recently been
available to Health Care Providers.
Q. Are collateral and personal guarantees needed to secure
Medical Receivables Funding?
No. The
funding source only requires a security interest in the provider’s receivables.
Q. Isn’t it risky to turn my receivables over to a funding
source to collect them?
No. Many
providers who may have initially felt this way, now find the funding
source successful in improving their bottom lines by increasing overall
percentage of claims collected, decreasing the reimbursement interval
and reducing administrative costs.
Q. Am I required to draw cash advances
every week?
No. The
client can factor as little or as often as he or she needs to, depending
on working capital requirements.
Q.
Besides smoothing out my cash flow, what other benefits are there to
Medical Receivables Funding?
Access
to unlimited working capital improves the credit rating of the provider.
Practice creditors may offer cash discounts for early payment, sometimes
up to 25%. The provider’s balance sheet improves making the practice
more attractive for buy-out or acquisition. Capital is available to
reliably meet payroll and malpractice premiums. Funds can be easily
drawn to cover practice expansion, adding partners or purchasing/leasing
new equipment.
Q. What if my cash flow doesn’t improve with the factoring
arrangement with the funding source?
The provider
can terminate the arrangement at the end of the trial period, usually
1 year, without penalty. Unless the productivity of the provider in
generating receivables falls precipitously, we have found that this
is extremely unlikely to occur.
Q. Do I need to generate a certain level of monthly receivables
to qualify for Medical Receivables funding?
Different
funding sources have their own criteria for whom they will and will
not fund, based partly on net monthly receivable levels. A Certified
Cash Flow Consultant is expert at introducing the client to the correct
funding source in order to meet his individual needs.
Call our office today to find out if Medical Receivable Factoring is right for you!!!
