Healthcare Factoring vs. Third Party Medical Receivables Factoring
There is misinformation about what funding is available for suppliers and professionals in the Healthcare industry. Let’s talk about the two types of accounts receivable medical funding available- Healthcare Factoring vs. Medical Receivables (Third Party Payee) Factoring.
First there is one common denominator about everyone doing business in healthcare, you receive payments on outstanding invoices very slowly!
Healthcare Factoring: Like Trucking Factoring, Manufacturing Factoring or Staffing Factoring, Healthcare Factoring describes expertise in buying Invoices in a certain industry by the Invoice Factoring Company. Some Invoice Factors only specialize in one or two industries. For example, there are many trucking only factors. So if your business provides nurse staffing, medical supplies, transcription services or other products and services to the healthcare industry, a Healthcare specific Factor is a good choice to partner with. However, most Factors are generalists, their expertise lies in collection and credit and they will buy invoices from most industries as long as there is not a THIRD PARTY PAYEE. But to be matched with factors that specialize in your specific industry and will be able to give you the most help and most aggressive deal -it’s recommended that you use Factor.bid to get a few offers from factor finance companies to buy your invoices, before making your final decision.
Third Party Medical Receivables Factoring: When you buy goods you as a consumer you’re the end user and typically end up paying for those goods. However, there are some industries where the consumer does not directly pay for services received but the provider of those services are reimbursed by third party payees. Healthcare is the primary example of this in the US as Healthcare is 19% of total GDP. In healthcare those third party payees could be Medicare, Medicaid, Commercial Insurance, Private Insurance, HMO/PPO, and Managed Care. The average time to collect for these types of Accounts Receivables can range from 90 – 180 days.
Third Party Medical Receivable Factors focus specifically on financing the healthcare and medical community and understand the pressures providers and facilities face on both the cost and revenue sides of business. With their experience they have a good understanding of the complexities of billing, monitoring, and collecting medical receivables, as well as the cash flow challenges of managing a healthcare or facilities organization.
Billing and coding expertise is ultra-critical. A Doctor, Hospital or clinic bills $2000 for a procedure under one code and subsequently Medicare or the Insurance carrier changes the code and only remits $400. As a healthcare professional you know the billing dance and the risk to your business. That is why it is best to partner with a Factor finance company who has a deep understanding and years of experience in third party payees and is up to date on recent healthcare legislation.
If you’re in the healthcare industry and looking for a way to increase your workflow capital, research all of your options: the different companies available, the services they offer, pricing, terms, etc. The easiest way to get a few offers from specific factors that specialize in your industry is to visit www.factor.bid and submit your invoice (takes about 2 minutes). Within the hour, you’ll have a few offers from the top factor finance companies competing to buy your open receivables.