Ozarks Capital Funding

There are far fewer companies that provide medical receivables factoring services than do funding for manufacturers, distributors, and service companies.  Healthcare factoring is a specialized niche that requires a tremendous amount of insight about the intracacies of medical billing and how it relates to third party payors.   At the onset of a medical factoring relationship, an estimate is made of the provider’s net collectible receivables, which provides a basis for the amount to be advanced on invoices submitted.  This percentage takes into account the mix of revenues from insurance companies, Medicare, Medicaid, state programs, and other third-party payors. 

The net collectible receivable percentage estimated is derived by a due diligence audit conducted by a representative of the factoring company.  This cost is the burden of the healthcare provider and can be expensive (typically a minimum of $5,000), which oftentimes causes the deal to come to a screeching halt.  But in many circumstances,  billing irregularities and mistakes are brought to light by the audit.   In these situations, making the recommended changes can more than pay for the audit. 

Once the audit is completed and terms are agreed upon, a contract is drawn up just like a traditional factoring situation.  Invoices are submitted for advances and fees are charged when the amounts are paid in full by the third-party payor.  Note that self-pay billings can’t be factored.  Medical accounts receivable factoring is becoming a widely-used form of acquiring working capital for medical providers.

Are you a healthcare provider in need of working capital?  Click here to get started.