Healthcare Factoring: A Medical Transcription Success Story

What is Medical Factoring?

Understanding the Basics

Medical factoring is a financial solution specifically designed to help healthcare providers and medical businesses manage cash flow challenges caused by delayed payments from private insurance companies, Medicare, and Medicaid. This process involves selling outstanding invoices to a medical factoring company, which then advances a significant portion of the invoice value. This advance provides immediate working capital, allowing healthcare providers to maintain smooth operations without waiting for insurance payments.

Key Components of Medical Factoring

The key components of medical factoring are straightforward yet highly effective:

• Invoice Purchase: A medical factoring company purchases outstanding invoices from healthcare providers or medical businesses.
• Advance Payment: The factoring company advances a percentage of the invoice value, typically between 80% to 90%, providing immediate funds.
• Operational Use: The healthcare provider or medical business can use these advanced funds to cover operational expenses, invest in new equipment, or expand services.
• Collection and Balance Release: The factoring company then collects payment from the insurance company or patient. Once the payment is received, the remaining balance is released to the healthcare provider, minus a small fee for the service.

By understanding these components, healthcare providers can see how medical factoring can be a reliable solution to their cash flow issues.

Patrick’s Medical Transcription Success Story

Things were going well for Patrick, the owner of a profitable medical transcription service. Like many healthcare businesses, Patrick faced challenges regarding cash flow due to delayed payments from clients. What’s more, Patrick had an opportunity to expand his medical transcription service by taking on a brand new high volume client. Although this was a huge chance for growth, Patrick was concerned about balancing his cash flow as this new client would take longer than his current clients to pay. He was faced with a choice–turn down the new business or come up with a way to increase his working capital.

In the medical industry, businesses and professionals can leverage financial solutions like medical factoring to address cash flow issues associated with slow payments from clients and insurance companies.

Healthcare Providers in Need of a Capital Solution

Convinced that there was a way to satisfy his customers’ medical transcription needs and fill the cash flow gap simultaneously, Patrick started researching different business financing options. After speaking with some of his medical transcription colleagues and reading about various funding alternatives on the internet, Patrick found his solution–accounts receivable factoring with PRN Funding, LLC. He discovered that medical invoice factoring could be used when billing both private and government insurance programs, highlighting its applicability to a range of healthcare providers. Medical receivables factoring emerged as a crucial financial solution for healthcare businesses facing cash flow challenges due to slow invoice payments from insurance companies.

Medical Transcription and Medical Receivables Factoring Expertise

Patrick learned that PRN Funding had a specific factoring program dedicated to medical transcription service owners (MTSOs) when he went to its Web site. Medical coding companies also benefit from funding that addresses cash flow issues, allowing them to maintain operations and serve healthcare providers effectively. He completed an online application and received a phone call from PRN the same day. Medical staffing agencies also need financial services provided by healthcare invoice factoring to address their cash flow needs. After the initial conversation, Patrick was convinced that PRN Funding was the right choice because of its expertise in medical transcription factoring and its high level of professionalism. In as little as nine days, documents were exchanged, Patrick was advanced cash on his invoices, and he was able to take on the new medical transcription client without having to worry about his company’s cash flow.

Invoice Factoring: Teamwork Makes the Business Dreamwork

Factoring his medical transcription accounts receivables has enabled Patrick to consistently meet payroll, while extending credit terms to his clients. Factoring services for healthcare facilities help stabilize working capital needs, supporting various operational expenses such as technology upgrades and payroll. Today, Patrick’s business is one of Inc. Magazine’s Top 500 Fastest-Growing Private Companies. Healthcare invoice factoring also benefits medical supply companies, providing financial services to various commercial vendors and service providers who supply goods and services to the medical sector.