Receiving payment for services rendered by medical and healthcare facilities is normally a painfully slow process. Unfortunately, in the wake of the COVID 19 pandemic, receiving payment may take even longer. Third-party providers are operating with a reduced staff and patients required to pay out of pocket may already be struggling to make ends meet. This can leave many facilities, especially smaller medical practices, with insufficient cash flow to meet the demands of everyday operations. Healthcare receivables financing can be the perfect solution to bridge the gap between billing and receiving payment.
What is Healthcare Receivables Financing?
Simply put, healthcare receivables financing is a form of invoice factoring. This type of alternative business financing allows facilities to sell their invoices to a factoring company and receive a majority of the face value without waiting for payments from patients and third-party payers. Payment is then due to the factoring company. They will send the facility the balance of the invoices once they are paid minus a previously agreed-upon fee. Utilizing Healthcare receivables financing can be beneficial for medical and healthcare facilities.
Consistent and Predictable Cash Flow
Nothing is more distracting for any business owner than to be unsure from one day to the next if there will be enough capital to cover their operating expenses. Providing a consistent and predictable cash flow is the best benefit of healthcare receivables financing. It allows facility and practice managers to focus on providing quality care to their patients rather than worrying about receiving payments. They will know how much revenue they can count on and budget accordingly.
Facility and practice managers are often dealing with inconsistent cash flow issues. In addition to creating a distraction from patient care, it can prevent growth. It is impossible to take on new patients or offer additional services when their income is constantly fluctuating. Not only can it inhibit planned growth, but it can also prevent the ability to take advantage of an unexpected opportunity.
Medicare and Medicaid
Along with private insurance companies, Medicare and Medicaid make up a significant portion of the income received by many medical practices and facilities. These agencies are normally slow to pay claims and working with a reduced staff due to pandemic may only impede the process. Healthcare receivables financing can be used to receive the amount owed to facilities and practices without the long wait.
No Additional Debt
Another advantage of factoring healthcare receivables is it’s not a loan. It is simply an advance on money that is already owed to your facility. Instead of waiting weeks or months for insurance claims to be paid, you can receive payment in as little as a few days without taking on any additional debt.
Healthcare Receivables Financing with CapFlow Funding Group
Maintaining a consistent cash flow can be a challenge for many small businesses. However, it can be particularly difficult for medical and healthcare facilities who are at the mercy of private and federal funded insurance providers. Healthcare receivables financing can be a great alternative funding option that can prevent the slow payment of insurance claims from interrupting your cash flow.
Not sure if factoring healthcare receivables is the best choice for your practice or facility? Then it’s time to consult with business funding professionals. CapFlow Funding Group specializes in factoring for a wide variety of industries with a variety of different funding needs, including medical practices and healthcare facilities. We will work with you to find the best funding solution to provide you with immediate working capital. Stop waiting for insurance companies and other agencies to pay medical claims. Contact us today and find out how invoice factoring can help grow your business.