Medical Accounts Receivables are payments owed to health care providers and manufacturing companies by insurance companies, Medicare, or Medicaid.
Description:
-The process of transacting accounts receivable in the secondary market (financial cash flow industry) is the purchase of accounts receivable from a business at a discount. Factoring allows business to collect money they are owed immediately by accepting a discounted (reduced) amount of the invoice from a third party such as the funding source company.
Factoring:
-In a factoring transaction, a business sells one or more invoices to a factor. A factor is a funding source (funding company) that specialized in funding accounts receivable.
Medical Accounts Receivables involve factoring accounts receivables specifically for health care-related businesses.
Benefits of Receivables Factoring:
Medical Accounts Receivables factoring is rapidly growing because of high health care-related practice costs, while reimbursement rates to health care providers are decreasing.
In the medical industry, repayment can take anywhere from 60 to 120 days to get medical receivables to be paid, but factoring will only take less than 30 days to get your money from medical receivables.
The delays in receiving payment create cash flow problems for physicians and other health care providers. They often use up their bank lines of credit and have no other option to obtain additional financing.
