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1.
What types
of Healthcare Receivables can be funded?
Invoices from:
Physicians and Surgeons
- individual and group practice
Medical staffing services
Physical therapy clinics
Hospitals
Dialysis facilities
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Out-patient
clinics
MRI centers
Rehab centers
Pharmacies
Medical labs
DME companies |
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Sectors not
funded: Dental, optometry,
chiropractic, Workers Comp, personal injury and veterinary
are typically excluded.
Additional sectors may be
funded depending on the funding source's requirements.
Please contact us if you do not see your specialty listed.
2.
Do the new HIPAA
regulations allow me to sell my invoices?
HIPPA has a special
provision written into it that allows the release of
information for the purpose of reimbursement.
Click here to view the document on the
Health and Human Services web site. When the window opens,
browse to the bottom of the form and select "Uses and
Disclosures for Treatment, Payment, and Health Care
Operations". Then open the document format of your choice.
3.
Is there a minimum
amount of invoices that I have to factor each month?
Fifteen
thousand dollars, net collectable per month, is the
minimum amount that can factored. Net Collectable
is the amount that you actually receive as payment for your
invoice, as opposed to the gross amount that you have
billed. The difference is usually due to subtracting
non-covered charges and contractual limits to how much you
can bill the insurance company, Medicare or Medicaid for a
covered charge.
4.
What fees
are charged and how much are they?
There are two
types of fees that a funding source will typically
charge. There will be a one-time initial origination fee to set up your account
and a fee, or discount, for each invoice purchased.
The specific fees and
discounts that will be charged can only be determined after
the funding source has examined your application information
but, in general, the discount charged for funding each
invoice will vary depending on the monthly volume to be
financed and on how long it
takes for your invoices to be paid.
5.
Do I have to pay the
fees in advance?
No. All fees can be
deducted from the funds remitted by the insurance companies.
This keeps you from having any large out-of-pocket expenses
that will make your cash flow situation even worse. The
solution to your cash flow problem should not be more
painful than the problem itself.
6.
Is there a minimum term
or commitment?
Twelve months is the
typical minimum term. After the commitment period is over,
you can continue to factor your invoices, discontinue your
funding, or leave and come back at a later date. Many
clients frequently fund for three to five years.
7.
Why do I have to send an aging
report and my financials with my
application?
Even though the primary
issue that most funding sources will look at in determining
whether they will fund the account is who pays you and how
long they take, this additional information will help them
to more accurately assess whether factoring is a good fit
for your facility.
8.
Medicare invoices
aren’t assignable, are they?
Not directly, but the
funds derived from them are assignable. Medicare invoices
are typically handled like this -The funding source will set
up a lock-box account at your bank. When your Medicare
invoices are paid, the bank will deposit the checks into the
lock-box account on your behalf and the funding source can
then be reimbursed with these funds for the invoices they
have purchased.
9.
Will I still receive
payment for my invoices from the insurance
companies and Medicare?
No, you will not. Since
the funding source has purchased the invoices from you, the
insurance company should send the payments directly to the
funding source. In the event that a check is inadvertently
sent to you instead of the funding source, all you need to
do is endorse the check, make it payable to the funding
source and send it to them.
10.
Is factoring a loan?
No. Your invoices are
purchased from you by the funding source. Factoring provides
you with almost unlimited funds without requiring you to
make payments for several years and your balance doesn’t
keep increasing because of compound interest like it would
with a loan.
11. I use a
Billing Service, can I still use
factoring?
Absolutely! Actually,
factoring and using a billing service can work hand-in-hand
to provide you with the best of both worlds. The net effect
of using a billing service and factoring together is that a
billing service can significantly reduce the fees charged by
the funding source when factoring.
For example, if the
billing service, through their efforts, is able to reduce
the time it takes for your invoices to get paid from four
months to three months, the discount that the funding source
will charge you will be less than it would have been with a
four month payback. The big difference is
that by also using factoring you will already have your
money and will not have to wait even the three months to get
it.
12.
Can I sell invoices that are aged
or are already charged off?
Yes, but charge offs and
aged receivables have specific requirements.
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