Factoring is a popular solution for diagnostic centers, medical practices, and other healthcare facilities. In this blog, we’ll explain some of the benefits of factoring in medical receivables.
7 Benefits of Medical Factoring
Medical factoring can help with cash flow and revenue for medical practices. Below we will look at 7 benefits of medical factoring.
Improves cash flow
The main benefit of factoring in medical receivables is that your cash flow is dramatically improved. Medical insurance claims are paid within a few days instead of 30 to 120. This is important for healthcare providers with few resources.
Makes it easy to predict cash flow
Claims payments are often unpredictable. Some will pay out quickly and others take weeks or months. This creates issues for medical providers because they don’t know how much they will get in a month. Therefore, it’s impossible to forecast cash flow.
Medical factoring fixes this and allows you to predict your cash flow. You can use your discretion to determine the providers you wish to finance and when claims are submitted. This keeps your practice’s finances under your control.
Factoring lines are flexible and are tied to the volume of medical claims you submit to insurance companies. You can increase the line as you need to, which makes it ideal for medical practices that are quickly growing.
Allows growth plans
One of the long-term benefits of medical factoring is that you can plan for growth. Your cash flow is improved, and revenues are predictable. This means that you can expand your services, hire more employees, and even open new locations. Since you know that you have the cash flow to cover the expense.
Can be used with Medicare & Medicaid
One of the advantages of using medical factoring is that you can use it for Medicare and Medicaid claims. This is critical for providers that have a large patient base.
Used by small/growing healthcare businesses
Medical factoring is not just for large healthcare practices. It can be used by small practices and physicians that are just starting and don’t have significant assets. It’s also available for practices that are growing and running low on resources.
Easy to set up
Most medical factoring programs can be set up in 1 to 2 weeks. Additionally, you are in control of how long the due diligence and setup take. This makes it perfect for those that have a shortage of cash flow and need a solution.
Keep in mind that medical factoring for a large medical facility may take longer because the due diligence process is more complex.
If you are interested in medical factoring for your practice, contact Achieve Capital Advisors. We will be happy to work with you and show you how it can help you.