In addition to pre-settlement funding, Fund Capital America specializes in medical receivables financing (factoring). Personal injury clients benefit because it helps work around the financial challenges of paying for medical care while awaiting a settlement. For hospitals and healthcare providers, a lack of reimbursement creates cash flow problems. Rising costs are also problematic. Medical receivables financing has many benefits for providers that we will explain below.
What Is Medical Receivables Financing?
Medical providers that treat personal injury patients, rather than receiving upfront payments, often find themselves with a collection of medical liens. These liens are paid out of future settlement proceeds that can take months or years to arrive. A medical facility cannot wait that long to receive revenue.
But it can sell its personal injury lien invoices to a third party. Accounts receivable are usually a medical practice’s biggest asset. A funding company can purchase personal injury liens from hospitals, clinics, medical offices, physicians, surgery offices, rehabilitation centers, and long-term care facilities. In turn, the healthcare provider receives a cash advance and immediate access to a financial reserve. This is called medical factoring.
Benefits of Medical Receivables Financing
Accounts receivables financing has a wide range of benefits that include:
Immediate Access to Cash
Younger medical practices often don’t have cash reserves to cover overhead, payroll, and other costs until medical liens get paid. When a provider’s application is approved, they usually receive payment quickly. The immediate cash flow can be used to cover payroll and hire new personnel. It can also help purchase new equipment or open a new office.
More Favorable Terms than a Bank Loan
Banks are often stringent about approving financing for younger practices and those with debt or credit issues. A bank also prefers to see a history of strong performance. A financing company bypasses the hurdles of obtaining a bank loan and takes less time to approve funding.
An Understanding of Medical Receivables
A bank usually has limited knowledge of medical receivables, so it is reluctant to issue loans secured by them. It’s best to work with a finance company that understands the pressure medical businesses face. Lenders like Fund Capital America understand the complexities of billing, revenue cycle management, and monitoring and collecting medical receivables.
Available Funding Can Increase
A higher volume of invoices can qualify the provider for more funding. Therefore, medical receivables financing is available as needed to build the facility’s staff, buy new equipment, and cover marketing costs while a medical practice is growing. Cash flow is also more predictable, so a provider knows how much money is available from month to month. Medical factoring is flexible and allows a medical practice to plan for growth.
Medical Practices Can Focus on the Patients
The legal system often imposes delays that make an administrator’s job challenging.
These include delays in collecting on medical liens. With medical receivables financing, a practice can focus on improving the patient experience and making the healthcare environment more productive. Medical factoring helps providers concentrate on tasks such as maintaining certifications, adapting to changes in billing coding systems, and staying on top of copays and deductibles.
Fast Turnaround Time
Medical receivables factoring can be set up quickly. Once the provider submits the invoices with supportive documentation, the funding company (factor) enters the data into their records. It then verifies each invoice and issues an immediate advance to the medical provider.
Choose Fund Capital America for Medical Receivables Financing
We use the latest technologies and a streamlined digital process to speed up turnaround times. Our clients receive frequent updates on the status of invoices and payments, along with consistent and accurate reporting. Data are encrypted to ensure the privacy of information. Fund Capital America ensures HIPAA compliance throughout the process. To apply or learn more about medical receivables financing, submit our online form or call (855) 870-2274
