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| Medical Factoring |
How does medical receivables factoring function?
 The procedure is quite straightforward. As soon as a contract is signed with a factor company, it works in the following way:
• Your office presents your every week (day or month) billings to the insurance company and to Medicare/Medicaid. (note: every now and then this job may be done by the factor company on your behalf).
• Your office forwards a copy of the billings to the factor company.
• The factor company reimburses you up to 85% of net collectables within 48 hours. Money is sent by wire or direct deposit. The rest of 15% is termed a “reserve” and employed to resolve billing variances at time of payment. This is returned to you as soon as the invoices are compensated.
• The factor company waits to be reimbursed by the insurance company or Medicare/Medicaid.
• As soon as the factor company is compensated, they settle out the contract and rebate you the rest of 15%, less their fee.
The benefit from medical receivables factoring
Factoring is preferably suitable for medical offices and testing centers that are rising rapidly and don’t have enough money to wait the standard 30 to 90 days that it takes to be compensated by insurance companies or Medicare. It may give you continuing financing, improve your cash flow, and especially, and you may relax as you know when you’ll be reimbursed.
How does medical factoring function?
Medical receivables factoring (or just medical factoring) is a business instrument that let you to convert sluggish paying invoices into definite cash, by factoring them to a medical factor company. The medical factor company reimburses you for them and waits to be compensated by the insurance companies. It reduces the sluggish payment cycle, eliminating the payment time from 90 days to two days. This gives the medical office the required funds to cover expenses, such as paying rental fee and salary. Furthermore it frees up resources to raise the business into new areas.
The medical factoring procedure is rather straightforward. As soon as a factoring financing contract is signed, your office forwards its weekly accounts receivable to the factor company for instant financing. The factor company will evaluate the definite sum paid by insurance companies (termed the net collectibles) and advance you up to 80% of that sum. The rest of 20% is termed the reserve, and is employed to settle billing variances. As soon as the insurance company pays the medical bill, the rest of 20% is rebated, less the financing fee. The financing fee depends on how long the invoices were financed.
Even though being eligible for medical invoice factoring is comparatively easy, most financing companies will only co-operate with medical offices that have net collectibles of at least $50,000. Conditions typically get better as the practice rises. Medical practices, testing centers and medical supply companies that have over $200,000 monthly in net collectibles are in the best place to get the best conditions. This is because insurance payment processing may be extremely compound and there are numerous efficiencies that can be reached with high amounts.
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