A great many medical practices have found that it is extremely difficult to maintain positive cash flow, primarily because payments are often late in arriving. That fact makes medical factoring an ideal solution for a great many practices, so they can obtain immediate cash for business and operating expenses, without having to wait for insurance carriers to eventually reimburse them for services.

How Medical Factoring Works

Any medical practice could improve its cash flow by submitting its medical claims for payment to a factoring company, for which it would receive a cash advance. This advance is generally in the neighborhood of 75% to 85% of the value of the medical claims themselves. Once the insurance company pays the amount of the claims, the remaining 15% to 25% would be remitted to the medical practice, after the factoring company subtracts its fee for the service.

The way the process works is as follows: your medical practice would submit a batch of claims to the factor, then an advance amount of cash would be deposited to your practice’s bank account, claims would then be paid by insurance companies within 120 days, and the remaining amount of money would then be deposited to the bank account of your medical practice.

Improving Your Cash Flow

As opposed to other financial solutions which might be available, medical factoring can provide the absolute ideal solution. It is as flexible as possible, because it’s based on the claims you actually submit each month. Qualifications are relatively easy to meet, and the whole process can be set up and carried out very quickly. This will immediately improve your cash flow and allow you to have predictable monthly revenues. You’ll probably also have lower expenses, and will generally have more cash on hand for operating expenses and for future growth.

Will Medical Factoring Work for Your Practice? 

Factoring can be a godsend to many medical practices, since they are obliged to wait for insurance payments somewhere between 30 and 90 days. By factoring some of your medical invoices, you can have cash in hand for operating expenses. Contact us at DAL Commercial Capital to learn more.