In general, any healthcare provider being paid by medical insurance companies, Medicare or Medicaid with at least a volume of $100,000 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.
Durable / Home Medical Equipment Companies – These providers bring medical equipment to patients recently discharged from the hospital, patients who have had an injury, patients who require breathing assistance with oxygen equipment, individuals who need mobility assistance such as canes, walkers, wheelchairs and many other scenarios. Cash flow is critical for these providers, as they must have inventory on hand when hospitals, doctors or therapists call them to deliver equipment to patients.
Home Health Care Companies – A patient requiring post-surgical care such as change of dressing, wound care, I.V. care or other home medical treatment will call (or the attending physician will call) a home healthcare company. The cash flow issue with this type of provider….all week nurses go out and do their jobs and on Fridays they submit their time sheets for payment. The home health care company will be paid in 30 – 40 days that’s the challenge.
Drug / Substance / Alcohol Abuse Centers – These rehabilitation centers are usually live-in facilities that provide medical and psychological services to its patients. Payments are never timely enough to fully fund their expenses. These centers are usually so busy that growth capital is always needed.
Imaging Centers – Centers that perform MRI, CAT scanning, X-Rays, PET scans and other imaging services for the most part lease their hugely expensive equipment. Missing a lease payment can close them down, as the equipment itself is the most vital part of their service. Cash flow issues can significantly affect their business.
Individual and Group Medical Practices/Walk-in Clinics – Doctor’s offices of all specialties are in need of cash flow. Many of them run their practices with their credit cards financing supplies, utility bills and other overhead expenses.
Medical Transport (Ambulance) – These types of services move patients from point A to point B, not necessarily under emergency conditions. Very high overhead in salaries, lease payments, fuel expenses, ambulance maintenance and liability/malpractice insurance literally eat up the sporadic cash flow received by these providers.
Group Homes (Adult and Children) – Adults and/or children in distress require a safe healthy environment to get back on their feet. Group homes are quite often the answer. State and Federal payments to these centers are always too slow for these providers and factoring usually proves to be the best (and maybe the only) answer.
Advance Rate: 70%-80% of Estimated Collectable Value (“ECV”), determined by using industry standards and collection history.
Factor Fee: 1.5% – 2.5% of ECV for the first 30 days and a daily prorated rate thereafter. This fee depends on the procedures performed, monthly billing and strength of the client.
Please note that additional setup fees may apply and a sweep agreement with Provider bank may be required so winning buyer can take our portion of the proceeds out first. Provider submit a claim to winning buyer that is estimated to collect $100. Within 72 hours Winning Buyer will advance provider $75 (75% advance rate) on this claim. If the claim is paid by the insurance provider within 30 days, winning buyer will be entitled to our advance ($75) plus our factor fee (2% of $100 = $2.00) and send the remainder ($23) to Provider