Who is Eligible
In general, any healthcare provider being paid by medical insurance companies, Medicare, Medicaid, governmental entities or other health care providers billing at least a volume of $75,000 per month and 6 months in business is a potential healthcare factoring client. However, here are specific targets with which we’ve been very successful.
Hospitals Regional or Community:
A specialized hospital service in the NHS which is more complex than that which is offered at a district general hospital—e.g., transplantation, management of rare cancers (mesothelioma, sarcomas), diagnosis of rare hereditary conditions. This type of facility continues to have very expensive overhead.
Long Term Acute Care Hospitals Known as LTAC’s:
These are smaller hospitals limited to patients who require extended care of usually 45 days or more. Normally the bill is summited until the patient is discharged.
Skilled Nursing Facilities (Nursing Home):
These facilities have two different payment profiles. Medicare pays using a pre-determined fixed amount. This method of reimbursement is the PPS (Prospective Payment System) which is not a target for factoring, however some private facilities are strictly fee for service.
Home Healthcare Companies:
A patient requiring care in their home, primarily elderly people as a means to keep them from entering a nursing home. The cash flow issue with this type of provider is keeping up with weekly payroll demands when the provider may be paid by the insurance up to 45 days of billing submissions, that’s the challenge.
Imaging Centers:
Facilities that perform MRI, CAT scanning, X-Rays, PET scans and other imaging services for the most part lease their hugely expensive equipment. As the equipment itself is the most vital part of their service, it is very costly to lease and maintain. Cash flow issues can significantly affect their business.
Private Practice and Specialty Physicians:
Doctor’s offices including specialties such as cardiology, orthopedics and others are in need of cash flow to maintain their costly overhead and malpractice insurance. Many of them run their practices with their credit cards financing supplies, utility bills and other expenses.
Medical Transport:
Non emergency medical transportation is provided for patients to and from doctor appointments and hospital visits. The overhead includes drivers who wish to be paid daily. The state generally reimburses the transport company at the beginning of the month for claims made the previous month, thus creating cash flow issues.
Group Homes/Adult and Children:
Individuals with physical or developmental disabilities who need to be in a controlled environment. State and Federal payments to these centers are always too slow for these providers and factoring usually proves to be the best solution to keep operations running.
Outpatient Surgical Centers:
Facilities that perform surgical procedures that the patient will be released from generally the same day. Some insurance companies tend be slow paying on higher medical bills. These centers have a very high overhead and factoring can ease the cash flow issues by not having to depend on longer reimbursement times.
Physical Therapy and Rehabilitative Medicine:
These therapists treat patients who have suffered a stroke or have spinal cord injuries or other disabling physical disease. Sometimes these patients need extensive therapy several times per week. The billing will group visits together generally weekly and then wait to be reimbursed. Sometimes that process is slowed because the insurance companies often demand additional documentation from the provider thus holding up the payment process.
Compound Pharmacies:
The compound pharmacy produces specific medications in a controlled environment and is not considered a retail pharmacy but more of a laboratory. Many of these pharmacies work with sales reps who demand payment within a week which can be difficult as reimbursements can take several weeks.
Behavioral Health:
This provider offers counseling services to individuals as well as family. There are also therapists who provide comprehensive treatment for autism and children with developmental disabilities. These providers generally take most insurance plans and at times payment can be slow due to continual authorizations required as most patients are long term.
Hospitalists:
A new term for a physician who works caring for patients solely within the hospital environment is called a hospitalist. They bill each patient’s insurance for a daily visit, separate from the hospital billing. The challenge to them is most facility bills are paid by insurance first, so the reimbursement time can be a little longer.
Substance Abuse Centers:
These rehabilitation centers are either outpatient or inpatient live-in facilities. They provide medical and psychological services to its patients. Depending on the type of facility, insurance payments are limited and patient pay could be the majority of payment. These centers are sometimes a great fit for factoring, especially if they are a Medicaid facility where the patient is mandated to a program. These centers can’t be generalized because of the different type and payment structure.
Vendors to Medical Providers and Facilities:
Although this type of financing opportunity would seem to be a traditional commercial factoring transaction, it is also the type of situation that a traditional factor would not entertain, with a medical provider being the payor. These businesses however, need cash flow to survive the long payment profile found in the medical industry.