| Factoring is when a business sells its | | | | collectable value from the private |
| receivables for a service or product | | | | insurance |
| delivered to another business. Many | | | | companies or government is too small |
| people in the healthcare industry think | | | | each month for a factor to be |
| that medical receivables can't be | | | | interested. |
| factored because the "customer" is a | | | | These are small chiropractors, |
| person and not a business. But medical | | | | dentists, cosmetic surgeons and Lasik |
| receivables can be factored because in | | | | doctors (often |
| most cases, your payment comes from | | | | not covered by insurance) and some |
| Medicare, Medicaid, Blue Cross/Blue | | | | nursing homes because of credit |
| Shield, Aetna, etc. In other words, the | | | | problems.Medical receivable factoring |
| payment is coming to you from a | | | | companies all have different minimum |
| business, so the receivables CAN be | | | | monthly net |
| factored.In the past, healthcare | | | | collectable amounts, so ask your broker |
| professionals could depend on efficient | | | | for the one that will be able to help |
| operations to keep | | | | your |
| their cash flowing, but that often is | | | | business. Some work with amounts as |
| not enough now. Increased costs and | | | | small as $35,000-$50,000, others have a |
| longer | | | | minimum of $200,000.Once your account |
| times for insurance companies and | | | | is set up with the factor, you will |
| Medicare to pay the bills are making it | | | | receive up to 85% of the |
| impossible for them to keep their | | | | invoices within hours of turning them |
| practices running smoothly.Most | | | | in each week. When the bills are finally |
| factoring companies do not factor | | | | paid, |
| medical receivables, but there are | | | | you will receive the rest of the amount |
| several | | | | owed, minus a small fee. The fee depends |
| that specialize in this niche. They | | | | on |
| fully understand that accounts that are | | | | many things and will probably range |
| paid by | | | | somewhere between 2% and 6%.You will |
| third party payors take more due | | | | lose all the stress of not knowing when |
| diligence and more things have to be | | | | you will be paid for the work you |
| looked at | | | | are doing. You'll be able to pay all |
| than with "regular" factoring. They | | | | your vendors and staff on time, you'll |
| know these receivables are filed and | | | | be able to |
| paid | | | | keep up with all your bills. You will |
| differently by different states and | | | | even be able to hire more staff or buy |
| then have elaborate payment methods and | | | | more |
| computations. There are government and | | | | equipment, because you'll know you can |
| insurance regulations, delayed | | | | accept more business.There have been |
| reimbursements, HMOs, contractual | | | | instances when a medical business has |
| allowances, multiple payors and many | | | | been on the brink of |
| more | | | | bankruptcy and decided to try factoring |
| challenges that are only found in the | | | | as a last ditch effort and it saved |
| healthcare industry. The factors who | | | | them. |
| specialize | | | | They were able to turn everything |
| in your industry know all the lingo and | | | | around and are thriving now.Factoring |
| terminology and will immediately | | | | should be considered as a tool for |
| understand | | | | growth and management, not as a last |
| your needs.The healthcare businesses | | | | resort to save your business. Unless |
| that will most easily be approved for | | | | your practice has very expensive |
| factoring are: Acute | | | | equipment or |
| or Rehab or Specialty Hospitals, | | | | diagnostic devices, your largest asset |
| Physicians, Surgery or Imaging Centers, | | | | is its accounts receivables and these |
| Dialysis or | | | | assets |
| Urgent Care or Rehab Centers, Ambulance | | | | can be used to keep your business |
| companies, Medical Labs, DME/HME, | | | | running smoothly and growing.Donna Poisl |
| Osteopaths, Oral Surgeons, Pharmacies, | | | | is President of Creative Funding |
| Home Health Care and Workers Comp | | | | Solutions. CFS works closely with |
| Healthcare Providers and some | | | | several of the best factors in the |
| Chiropractor groups.There are certain | | | | country, each with different rates, fees |
| types of health related businesses that | | | | and |
| might be more difficult to | | | | requirements and is able to find the |
| factor, mostly because the net | | | | best one for each client. |