One of the many challenges in the healthcare industry is having the working capital available when you need it. You see the patient and bill their insurance company, generating an invoice for services, the insurance company can then take weeks to either approve the charges and pay you, or deny them and send you to the patient for payment. The patient can then appeal the decision, taking even longer for you to get paid for the services provided. With accounts receivable financing, you can get an advance from a factoring company and let them handle the payment of the invoices.
Timely Working Capital
When you factor your medical invoices, you are selling them to a third-party in exchange for an advance of their value. You will usually receive around eighty percent of the invoice in an advance and then any holdback minus fees after the insurance or patient pays. Many medical billing companies work as a factor for hospitals, clinics and labs so those facilities can have the working capital they need without having to wait for payment. This can ensure that your bills and staff are paid on time to reduce late fees as well as help you take advantage of timely deals on purchases of supplies and equipment.
No More Waiting on Insurance Companies
Some insurance companies and claims are faster with payment than others because of how the company itself is structured and because of how various plans are designed. With accounts receivable financing, you will not have to wait on insurance to get paid for your work because the factor will do the waiting, and bill collecting, for you.
Streamline Invoices and Billing
When you turn all your invoices and billing to the factor, you can streamline your practice by cutting back on the accounting department. This takes your accountants out of the collections business to focus more on how to best invest your working capital. Customers will usually not know the difference because their insurance will handle most payments, and the factor will be listed with your practice on any invoice copies they receive.
Accounts receivable financing can offer many benefits to companies in the medical industry, especially the benefit of getting paid quickly for services provided to clients. You will no longer have to wait on the insurance company to approve a payment, or for the long appeals process if declined, to order more supplies, purchase equipment, or pay staff. You can even use a factor to streamline your invoices and billing processes to spend more time helping your patients.