| > | | | | tried that and have been surprised to find that the |
| Medical Receivables Funding: The Rx for Ailing Cash | | | | average practice may not have sufficient credit and |
| Flow | | | | assets with which to secure adequate working capital. |
| The current adverse financial structure of the | | | | Additionally, the traditional banking loan application and |
| healthcare industry has placed hospitals, medical | | | | approval process is long and involved. Debt is created |
| groups, private practitioners and other providers in a | | | | for the practice to repay, and personal guarantees are |
| perilous position. Cumbersome and bureaucratic third | | | | required. The practice becomes less desirable for |
| party billing systems with long time-to-collection waiting | | | | resale or acquisition. |
| periods have resulted in inconsistent cash flows and | | | | Unlike bank lines that can tie up all of your assets, |
| limited capital for growth. Nationwide, two-thirds of | | | | factoring involves only your third party medical claims |
| physicians work in practices that are set up as small | | | | No collateral other than accounts receivables |
| business. Payment cuts 18% over four years, together | | | | No financial guarantees |
| with soaring malpractice premiums and other overhead | | | | Unlimited amount of dollars |
| costs, have threatened to put such practices out of | | | | Factoring provides working capital without adding debt |
| businesses. More than 50% of doctors have deferred | | | | to your balance sheet. There is no predetermined |
| plans to purchase much-needed new equipment, and | | | | maximum limit. This working capital arrangement is not |
| 30% either have laid off staff or are planning layoffs in | | | | limited in amount as many bank products are nor is it |
| the near future. | | | | subject to banking "regulations." |
| What is medical receivable funding? | | | | Surveys of physicians have identified the following |
| Medical receivable funding is a means by which health | | | | immediate needs: |
| care providers (Hospitals, Doctors, Outpatient Facillities, | | | | The creation of solid dependable cash flow |
| Physical Therapists, Dialysis Facillities, MRI Centers, | | | | Decrease in the reimbursement interval between the |
| Durable Equipment Suppliers, Rehab Centers, Medical | | | | time service is provided and payment is received |
| Labs, & Substance Abuse Clinics) receive immediate | | | | Increase in the overall percentage of claims collected |
| cash for their billings to third party payors (i.e. | | | | Reduction in administrative costs |
| commercial insurance companies, HMOs, Blue Cross | | | | Ready availability of cash for new equipment, |
| Blue Shield, Medicare and Medicaid). | | | | expansion of office space, the addition of new |
| What Factoring "Is Not:" | | | | partners, and practice marketing |
| A Loan - Factoring is the sale of your medical | | | | This wish list would be complete if access to |
| claims for services already delivered | | | | this working capital could be created debt-free. The |
| Offered By Banks - Factoring is not an | | | | physician practice would then have the financial |
| asset-based loan, nor is it a debt facility similar to those | | | | freedom to focus on business growth and patient |
| offered by banks. | | | | satisfaction, instead of focusing on how to meet the |
| Why not simply pick up the phone and call a bank for | | | | next payroll or malpractice premium payment. Is such a |
| a loan to get through the crisis? Many of you already | | | | solution possible? Fortunately, the answer is YES! |