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