Because of the risky nature of the Health industry, service providers get mixed up when the time comes to acquire extra funding. So far, Healthcare Factoring and Third Party Medical Receivables Factoring are the two common forms of account receivable commercial funding available for the medical industry.
But what are the differences between these two products
Medical factoring works just like Trucking Factoring or Staffing Factoring; it involves an Invoice Factoring firm buying a health facility’s Invoices. Some of these Invoice Factors are explicitly meant for one or two industries— like you will find many “trucking only” factors, which cannot assist you if you offer medical supplies, transaction services, nurse staffing or medical supplies, to the healthcare industry. Only a Healthcare only Factor can be of assistance in this case. Though you’ll find that most factoring firms take all these problems in general; they specialize in credit will gladly buy invoices from any health company as long as it does not involve a THIRD PARTY PAYEE.
But why are third-party payees considered an exception? Find out below
Third Party Medical Receivables Factoring
Unlike in other industries where the buyer directly pays for the good, consumers in the health sector do not directly pay for the service they receive. Therefore the provider receives payment from third-party payers.
Some third-party payers in the in the healthcare sector include Commercial Insurance, Medicare, Managed care, Medicaid or Private Insurance. You can collect these forms of Accounts Receivable in 90 – 180 days. These Third Party Medical Receivable Factors focus are specifically designed for healthcare and the medical community; therefore they and understand the trouble medical service providers face regarding cost and revenue. In fact, they have a deeper understanding of the complicated nature of billing, monitoring, and collecting funds in the health sector, as well as the difficulty in managing cash flow changes.
Having served in the healthcare industry, you know the billing changes and wouldn’t want to put your micro-business at risk. For that reason, you are safer when your work partner with a Factoring Company that has a deep understanding and extensive experience with these third-party payees and is up-to-the-minute with healthcare legislation.
It is not easy to acquire funding in the healthcare sector, but one of these two alternatives can give you the money you need to get back on your feet.
Author bio:As an account executive, Michael Hollis has funded millions by using alternative funding solutions. His experience and extensive knowledge of the industry has made him a Medical Factoring expert at First American Merchant.