Medical receivables factoring allows medical professionals to get an advance on their outstanding accounts. This allows the professionals to continue their practices without the hassle of waiting for incoming payments from patients. The cash advance and qualified service enables medical facilities to spend more time on service and less time worrying about how to receive their needed compensation.
How Does Medical Receivables Factoring Work?
Medical professionals can sell their outstanding accounts receivables to a factoring company in order to receive advance payment. This payment is usually a high percentage of the actual invoices. When payment is received from the clients, the factoring company returns the remaining balance to the medical professional, minus a fee. The fee for using this service is generally around 2 to 3%.
What Are the Benefits of Factoring?
Much of the income medical professionals rely on is often tied up in slow processing agencies such as Medicare and Medicaid, as well as dependence upon the individual patient paying an outstanding invoice. By turning invoices over to a factoring company, the company then handles all the necessary time and energy that goes into receiving payment on the invoices. This frees up the medical professionals to spend more time an energy treating existing and new patients without having to worry about complex administrative processing and the hassle of calling for payment.
Medical receivables factoring also allows the medical professional to pay suppliers more quickly and enables the facility to have steady revenue when the service is utilized on a regular basis. This in turn means that accounts payable becomes more streamlined and less dependent upon unknown factors outside of the facility’s control.
What Types of Medical Professionals Qualify for Factoring Services?
Many types of medical facilities can utilize accounts receivables factoring, such as hospitals, clinics, hospice centers, imaging facilities, nursing homes, and suppliers of durable medical equipment. As the healthcare industry expands, so do the needs of both the patients and those who treat them. When professionals see multiple patients for a variety of services, all with different insurance providers, forms of payment, and reliability, keeping up with the intricacies involved in billing and seeing returns outstanding invoices can seem daunting. Factors are skilled professionals whose job it is to acquire outstanding payments. No matter what type of medical facility or company, utilizing these services can help systematize the process.
Medical receivables factoring is a solid option for many medical professionals. Anyone wanting to use this service should research various financing companies in order to find the option. Factoring has been in existence for many years, and an increased number of businesses are utilizing this helpful service.