In an environment of reduced reimbursements, increased monitoring and regulatory mandates, home health providers have to ask if their business model should include Medicare patients. Unfortunately if a provider decides to go the route of just commercial-insurance patients the apparent drawback is the time it usually takes to be paid. Typically commercial carriers have longer payment profiles and waiting for those reimbursements can cause a strain on cash flow, making payroll and other overhead a weekly challenge.
Many home health professionals are looking to leave the realm of Medicare and have found a way to faster commercial carrier reimbursements. The alternative of medical accounts receivable finance – factoring – is the solution for the dilemma illustrated above. With a modest cost of just a few percentage points on the value of the claims (as the factor’s fee), home health providers can move the reimbursement period from many weeks, to one day following the treatment or service provided. This type of strategy does not interfere with existing billing procedures and generally works smoothly fitting into existing policies and electronic platforms.
Factoring has been providing cash flow solutions for businesses for centuries and has recently arrived in the healthcare community. The special understanding needed to provide medical receivables based finance is not common to all factors so the savvy healthcare provider will seek specialists in this sector. Working with such specialists will make sure that HIPAA and other regulations regarding medical information and reimbursements will be adhered to.
From a business perspective it may make sense to think about a new direction in the business of home health care, and using the tools that are available to make such transition. Xynergy Healthcare Capital is that specialist and can guide any provider through the process of getting started.
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