Medical Factoring Companies

Medical Factoring Companies Provide Fast Cash to Healthcare Providers

Factoring companies have become a popular source of financing for businesses of all kinds. Some factoring companies specialize in a specific industry or two while other companies serve basically any and all professions and industries. There are companies specializing in medical or healthcare factoring, which get a lot of business in today‘s complicated medical world.
The point of medical factoring companies is to maintain a consistent cash flow, increase in the amount of paid accounts, and to receive much faster payment as well as freeing up resources because all of the billing and collecting are done by the third party, which is the medical factoring company.
Why Would Medical Providers Need Factoring Services?
Medical providers often have to wait for payment from their patients. It is standard practice to wait anywhere from 60 to 120 days in order to receive payment from private insurance, Medicaid, Medicare, or HMOs. Sometimes the amount that is not paid by insurance is paid by the Medical Factoring Companiespatient by making small payments, which could make the payment process run into several years. There is also the chance that any uninsured patients or those with large co-pays and deductibles won’t contribute anything toward their portion of the cost, so a lot of time and effort must be put into collecting accounts.
Medical providers, whether a hospital, medical supply company, outpatient facility, or a physician in private practice needs money to stay in operation. Medical providers need to pay utility bills, provide payroll checks, and purchase the needed supplies for day to day operations. Medical factoring allows the medical facility to have fast access to cash.
What is Medical Factoring?
Medical factoring companies don’t offer a loan, but is buy unpaid invoices to a third party. The amount received is dependent upon when the account is due and payable. Basically, that means decreased reimbursement intervals between when medical services or treatment is given to the patient and when payment is received by the business owner.

Medical Factoring Companies are Usually Fast

Most medical factoring companies say it takes 10 to 14 days for preliminary approval and to set up an account. Funding arrives shortly after the account has been set up. From that point on, the process should be much easier dealing with the factoring company, and funding could be received for subsequent invoices within a day or two of their submission.
Once an account has been set up and your business has been approved by your  medical factoring company, the ongoing process is fast and simple. Invoices, or claims, are sent to the third party company. In return, the factoring company will pay your medical company anywhere from 70 to 90 percent of the face value, or the expected receipts of your outstanding invoices within a few days. Most medical factoring companies hold a portion of the invoice value in reserves to handle any charge backs.

What Kind of Business Qualify for Medical Factoring?

There are a variety of businesses eligible for medical factoring. Some businesses eligible for medical factoring are medical laboratories, rehabilitation centers, nursing homes, healthcare facilities, physician offices, doctors, physical therapists, optometrists, hospitals, outpatient centers, surgery centers, durable equipment suppliers, medical testing centers, MRI centers, dialysis facilities, and chiropractors.
Medical Invoice Factoring is an Alternative to Loans
Medical factoring of accounts receivable is a fast alternative to the traditional loan process. It provides cash much faster, and leaves the medical provider debt free. The disadvantage of medical factoring companies compared to traditional loans is that factoring is more expensive than traditional loan rates. Medical factoring can cost 15 percent or more of your invoices, while loans have a set rate, usually less than 10 percent.