Pennsylvania Home Healthcare Factoring

Looking for a Steadier Source of Working Capital?

Don’t let slow-paying customers keep you from serving your patients. PRN Funding’s Pennsylvania home healthcare factoring program will give you the security you need to thrive. Home healthcare factoring is a business-friendly alternative to traditional financing. By selling your invoices to PRN Funding, you will gain access to immediate cash that you can use to meet your everyday expenses, such as payroll and operating costs, as well as to begin working with new patients and agencies. The homecare factoring process is easy, and you can do it as often as you need to maintain a steady flow of working capital.

What is Medical Factoring?

Medical factoring, also known as medical invoice factoring or medical accounts receivable (A/R) financing, is a financial solution designed to help healthcare providers and medical businesses manage their cash flow and working capital needs. It involves selling outstanding invoices or receivables to a factoring company, which then advances a significant portion of the invoice value to the healthcare provider. This allows medical businesses to receive immediate payment for their services, rather than waiting for payment from private insurance companies, Medicare, or Medicaid. By leveraging medical factoring, healthcare providers can maintain a steady cash flow, ensuring they have the necessary funds to cover operational expenses and invest in growth opportunities.

How Medical Factoring Works

The medical factoring process is straightforward and hassle-free. Here’s how it works:

1. A healthcare provider submits their outstanding invoices to a factoring company.
2. The factoring company reviews the invoices and verifies the creditworthiness of the account debtors (i.e., the private insurance companies, Medicare, or Medicaid).
3. The factoring company advances a significant portion of the invoice value (typically up to 90%) to the healthcare provider.
4. The healthcare provider uses the advanced funds to meet their cash flow needs, such as paying employees, bills, or rent.
5. The factoring company collects payment from the account debtors and returns the remaining balance to the healthcare provider, minus a small factoring fee.

This process ensures that healthcare providers can access the funds they need without waiting for lengthy payment cycles, thereby improving their cash flow and financial stability.

Eligibility for Medical Factoring

To be eligible for medical factoring, healthcare providers typically need to meet the following criteria:

• Have outstanding invoices or receivables from private insurance companies, Medicare, or Medicaid.
• Have a stable business with a consistent revenue stream.
• Have a good credit history (although some factoring companies may consider businesses with poor credit).
• Be willing to sell their outstanding invoices to a factoring company.

These criteria ensure that the healthcare provider can benefit from the immediate cash flow that medical factoring offers, regardless of their credit history, as long as they have reliable debtors.

Common Cash Flow Challenges in Healthcare Billing

Healthcare providers often face cash flow challenges due to the slow payment cycles of private insurance companies, Medicare, and Medicaid. Some common cash flow challenges include:

• Slow payments: Private insurance companies, Medicare, and Medicaid often take 30 to 120 days or longer to pay healthcare providers.
• Extended payment terms: Healthcare providers may need to extend payment terms to patients or clients, which can further exacerbate cash flow problems.
• High administrative costs: Healthcare providers often incur high administrative costs associated with billing and collections.

These challenges can strain the financial health of healthcare businesses, making it difficult to cover operational expenses and invest in growth.

Solutions to Cash Flow Issues

Medical factoring is a viable solution to cash flow issues in the healthcare industry. By selling outstanding invoices to a factoring company, healthcare providers can receive immediate payment for their services, which can help to:

• Improve cash flow and working capital.
• Reduce administrative costs associated with billing and collections.
• Increase revenue and profitability.
• Enhance business stability and growth.

By leveraging medical factoring, healthcare providers can overcome cash flow challenges, ensuring they have the necessary funds to maintain and grow their operations in the competitive healthcare industry.

How the Invoice Factoring Process Works:

• Once you bill, submit your invoices to PRN Funding
• We will verify your invoices and advance you up to 90 percent of their value within 24 hours of receipt
• Continue providing work and billing your patients while we wait to collect
• When your customers pay their open invoices, we will send you their remaining value minus a small factoring fee