What is Medical Factoring? How Can Your Business Benefit?
As the owner or administrator of a medical facility, you are probably waiting up to ninety days, or even longer, to receive payment from your medical claims. Slow payments from insurance companies and Medicare/Medicaid can adversely affect your cash flow and make it difficult to run and grow your healthcare business. However, there is a solution to your cash flow dilemma – medical factoring.
How Does Medical Factoring Work?
When you are enrolled in a medical factoring program, you receive 75-85% of the value of your medical claims almost immediately. The remainder is paid to you when the claims are paid to the factoring company, minus the factoring company’s fee for their services.
What Will Medical Factoring Cost Me?
The cost of factoring your medical receivables is based on several criteria including the amount being factored and the creditworthiness of the insurance companies. Generally, you are looking at costs ranging from 2% to 3.5% of the total value of your medical receivables.
What are the Benefits of Medical Factoring?
• Easy qualification requirements.
• Fast setup times.
• Improved cash flow.
• More predictable revenues.
• Flexibility – the factoring line grows with your growth.
Who Can Benefit From Medical Factoring?
Any healthcare facility that bills private insurance companies and/or Medicare/Medicaid can use medical factoring. Some examples include:
• Medical offices
• Surgery facilities
• Diagnostic centers
• Imaging centers
• Nursing providers
• Medical staffing companies
• Nursing homes
• Home healthcare agencies
• Medical equipment providers
• Medical supply companies
Choosing a Medical Factoring Provider
It’s essential to work with a factoring company that understands the healthcare business. Desert Star Commercial Consulting has helped all kinds of healthcare facilities improve their cash flows by making use of medical factoring. Contact us today to see how we can help you overcome your cash flow problems.