Healthcare Factoring vs. Medical Receivables Factoring
When it comes to factoring in the healthcare industry, there are two different kinds of companies that can benefit from what’s commonly referred to as healthcare factoring and/or medical factoring. Both types of healthcare companies make ideal invoice factoring candidates because both routinely bill creditworthy slow-paying customers.
How Does Invoice Factoring Work?
- The application process takes 3-5 business days to process.
- Once approved, submit the invoices you’d like to factor to your factoring company.
- The factoring company will verify the invoices, and then advance you up to 90% of the total invoices amount.
- You can continue work as usual, and once the factor collects the invoice amount from your client, your specialized account manager will remit the remainder back to you, minus a small fee for utilizing invoice factoring services.
The first variation of the medical factoring model involves entrepreneurs who own a service-oriented business within the healthcare industry. Specifically, medical transcription services, medical supply companies, medical staffing agencies, temporary nurse registries, outsourced medical coding companies, medical billing services, etc. can all benefit greatly by factoring their invoices.
Furthermore, the healthcare vendor factoring process is as follows:
- A healthcare vendor sends invoices to a medical provider (i.e. physicians’ office, medical clinic, hospital, nursing home, etc.) for services rendered or goods provided.
- The healthcare vendor then submits a copy of those invoices in addition to any supporting documentation (i.e. signed time sheets) to their invoice funding company (PRN Funding, LLC).
- At which point, PRN Funding purchases those invoices and advances 80-90% of their face value. (Funds are typically deposited directly into the vendor’s bank account within 24-48 hours).
- PRN Funding will use the remaining 10-20% (reserve) as a buffer in case some of the vendor’s bills do not get paid or if they had billing errors.
- The reserve, less the factoring fee, is then released back to the vendor upon receipt of payments from the medical providers.
Healthcare factoring can be extremely beneficial for vendors hoping to maintain a positive cash flow when their customers (medical providers) take weeks or months to pay them for their services or goods. Click here to learn more about PRN Funding’s healthcare factoring solution.
Medical Receivables Factoring
On the other hand, medical receivables factoring includes a third party payer (i.e. Medicaid, Medicare or private insurance company) within the medical invoicing process. PRN Funding works with Factor Finders, LLC, a leading factoring broker that pairs healthcare companies with factors that specialize in funding medical deals. By factoring medical receivables, the medical provider is the one who benefits. Moreover, the medical factoring process is as follows:
- A medical provider submits bills to a third-party payer (i.e. Medicaid/Medicare, HMOs, private insurances, personal injury lien settlements, or worker’s compensation insurances, etc.) for the medical services performed.
- The medical provider sends a copy of the invoices to their invoice factoring firm.
- The factor then purchases the medical provider’s invoices and advances up to 80-90% of the expected net collectable value. (Funds are typically deposited directly into the medical provider’s bank account within 24-72 hours).
- The medical factor uses the remaining 20% (reserve) as a buffer in case some of the provider’s bills do not get paid or if they were billed incorrectly.
- The reserve, less the factoring fee, is released back to the medical provider after payments are received.
Medical receivables factoring is a great way for medical providers to bridge the cash flow gap that is oftentimes created by slow payments from insurance carriers and other third-party payers. PRN Funding works with Factor Finders, LLC, a leading factoring broker that pairs healthcare companies with factors that specialize in funding medical deals.
Why Choose PRN Funding?
First and foremost, we listen to what your goals are and want to help you succeed. PRN Funding specializes in the healthcare and medical field and can help your company go from good to great. You’ll be set up with an expert account manager that can answer all of your questions and guide you through the entire process. You’ll be set up with an online client account for easy and effortless access to your reports. Why wait any longer to get started? Let us help you regain complete control over your business!