As a medical practitioner you will generally see that it takes about 90 days to get the payments back from the insurance companies or HMO’s or even the Medicare and Medicaid. Now that is quite a wait considering that you need to pay your suppliers, employees and also pay for rent for the facilities and also will need money for the equipment that you have leased. 

You can actually have that money raised in 2 days as against to wait for three months. And how? The answer lies in medical factoring. Medical receivable factoring is what we are talking about here. Medical receivables are the ones which you are to receive as payments as the name suggests that these are receivables and these are due to you by customers who are paying you via the insurance companies. Now these insurance companies generally will pay you after 90 days and what happens to the cash position in between. Of course you need cash to survive and that is where medical factoring and financing companies come into play. 

If you are still debating whether to go for the medical factoring then you think about a whole lot of benefits that you can get from the factoring and that instant supply of money. Let us look at other option and the option that you have is that you can get a line of credit and this line of credit has a fixed limit whereas in medical factoring you can actually have as many insurance claims factored as you want. You can try to get bank finance but that is also generally not available to very new medical establishments.

 The reason it is good as a medical practitioner to have the medical receivables factoring is that you can have the finance right now. You first submit the claims to insurance companies, HMO’, medicare/Medicaid. Then you send the claims to the factoring company. Factoring will pay you 85% of the claim amount reserving the 15% for any sort of discrepancy. Then after you get the claims settled you will get the balance 15%. It is very simple.The first time around I am sure it will take time to set up the factoring with a factory company with all sorts of forms etc to be filled but later it will be easy with  arrangements already made. 

What are the medical receivables factoring costs?

Nothing comes for free and you will need to pay the cost of getting money upfront and most companies charge about 1.5% to 3.5% per month. That is each month based on the total amount of the transaction you will be charged between the above given percentages. Now that will mean for three months you will be charged till the time the claim is settled by your insurance company. The rates charged can also vary because of the volume as well as the business reputation. A lot of companies generally will only do the medical factoring till a certain limit of net realized value which means that if you own a big hospital with a million dollar revenue then you will probably not be eligible but then you can go for regular business factoring on the asset base.

Here is the list of type of medical facilities that can receive the factoring services

Specialty Hospitals

Physicians,

Imaging Centers

Dialysis Centers

Ambulance companies

Medical Labs

Osteopaths

Oral Surgeons

Pharmacies

Home Health Care

Rehab centers