Why is Medical Factoring So Hot Now?

Managing a medical office is difficult, especially from a financial perspective, and this situation has been made much more of a challenge due to the Affordable Care Act.

Fortunately, one of the most significant – and most common – sources of cash flow problems can be fixed with the right solution.

Slow-paying medical claims

The most common source of cash flow problems for medical offices is slow payments from insurance companies with payments taking anywhere from 35 – 120 days or longer. Furthermore, these problems can really impact a medical practice when it’s growing quickly and doctors least expect it. Expenses can and often due get ahead of revenues creating additional cash flow concerns.

To make matters worse, the massive billing changes mandated by the Affordable Care Act aka Obamacare, the switch to ICD-10 medical billing codes, resulting in an increase from 13,000 to nearly 70,000 codes, has caused a slowdown in collecting accounts receivable and a decrease in the amounts received due to incorrect coding. In addition, implementing ICD-10 codes is estimated to cost medical practices anywhere from $83,290 to more than $2.7 million.

Medical factoring can finance medical insurance claims in just a few days, after account setup, providing funds to pay employees, suppliers, and rent. More importantly, it provides predictable cash flow to facilitate running your medial offices and can provide the money needed for expansion and expensive equipment acquisition.

What is Medical Factoring?

Medical factoring helps companies that bill private insurance companies, Medicare, or Medicaid, and have cash flow problems due to slow payments or reduced payments due to miscoding. This type of financing is commonly used by healthcare providers and medical professionals of all specialties.

How does medical factoring work?

Our programs finance slow-paying claims in two installments. The first installment, the advance, is deposited to your account soon after you submit the claims for financing. The advance ranges from 75% to 85% of the expected claim payment. The second installment, the rebate, provides the remaining funds and is deposited to your account as soon as the claims are paid by the insurance company and the transaction is settled.

Most medical factoring companies structure transactions as follows:

  1. You submit a batch of claims to the finance company.
  2. The finance company deposits the advance to your bank account.
  3. Claims are paid on their regular schedule in 30 – 120 days.

Medical factoring improves cash flow

Medical receivables factoring has advantages over other solutions that make it an ideal solution for small medical offices:

  • It adapts and grows with your revenues
  • It has simple qualification requirements
  • It can be deployed quickly

The cost of factoring your medical receivables varies based on the size of the financing facility, the creditworthiness of your insurance providers, and other criteria. Our solution provides a number of benefits, including:

  • Better cash flow
  • More predictable revenues
  • Reduced expenses
  • Can free up cash for expansion
  • Flexibility – the line can grow with your business
  • Quick setup times

Our solution can help healthcare providers that bill private insurance or Medicare/Medicaid for medical services and need to get paid sooner. Some examples include:

  • Easy qualification requirements
  • Medical offices
  • Imaging centers
  • Hospitals
  • Nursing providers
  • Surgery facilities
  • Diagnostic centers
  • Home healthcare agencies
  • Durable medical equipment providers
  • Nursing homes
  • Pharmacies
  • Hospices
  • Medical supply companies
  • Medical staffing companies
  • And more…

Qualifying for medical factoring is relatively easy. Your company must:

  • Bill medical insurance providers, Medicare, or Medicaid
  • Bill at least $40,000 per month
  • Follow good medical billing procedures
  • Be free of liens
  • Not have serious tax problems

Financing your medical receivables usually helps your business if the following apply to your company:

  1. You work with private insurance companies, Medicare, or Medicaid
  2. Your cash flow problems are due to slow-paying claims
  3. You need money to pay operational expenses
  4. You invoice at least $40,000 per month.

Can Medicare and Medicaid Provider Payments Be Financed?

Unfortunately, the problems with collecting medical accounts receivable do not just involve insurance patients and claims alone: Medicare and Medicaid claims have not fared any better.

However, using factoring can be a challenge because factoring companies require that the providers assign the financial rights of their insurance claims to them but Medicare and Medicaid often forbid medical providers from assigning claims to third parties. For many healthcare providers, this problem may seem insurmountable.

When factoring your Medicare or Medicaid claims, the financial rights of the claim must be assigned to the medical factoring company. The problem is that this type of assignment is not supported by most Medicare or Medicaid programs, as they only pay the provider of the service – without exception. Often, this is a stumbling block in the financing process.

Fortunately, there is a way to handle this situation.

Solving the problem

This problem can be solved by keeping the bank account information as is but changing its operation model to a sweep account, sometimes referred to as a managed account. This type of account preserves ownership but gives the factoring company full operational control. Since the medical provider still owns the account, Medicare/Medicaid can still remit payments to it.

Since the factoring company has control, they can sweep the account on a regular basis to collect payments and settle invoices. When done correctly, this strategy allows the factor to secure their position and allows you to finance your Medicare and Medicaid receivables.

For more information on medical factoring or to start the approval process, please contact us.



Tips for Creating a Business Plan

Over the years I have seen a number of business plans. The quality of those plans range from a sketch on a napkin to a professional presentation. I love the author’s tips on putting the plan together. Also, make sure you cater the business plan to the audience that you are presenting. Whether it’s an internal road map, financing presentation or looking for investors, the audience is important for a targeted plan.

If you are looking for financing from a traditional lending source you need to focus on the financial projections. The numbers must be realistic for your specific market. Large leaps in revenue that cannot be reasonably explained are going to raise concerns. Make sure you know the details of your product cost. For example, to make a widget, it cost X dollars, and the margin is Y.

Your experience level in the business is going to be a large factor in bank financing. If you are a CPA working for a large firm and you want to start your own practice, you will be looked at in a positive light. In contrast, if you are a CPA wanting to open up a pizza parlor and have never worked in a restaurant before, well…. You get the point. If you lack the experience but you have an experienced manager that you are going to hire, then you are on the right path.

For the full article click here: http://www.entrepreneur.com/article/241537


More Facebook Algorithm Changes

Facebook continues to make changes to their algorithms which affect businesses that use it as a way to connect with their market. It is important to understand the changes so you can fine tune your company’s social media marketing plan. Here is what Facebook had to say:

“As part of an ongoing survey, we asked hundreds of thousands of people how they feel about the content in their News Feeds. People told us they wanted to see more stories from friends and Pages they care about, and less promotional content. We dug further into the data to better understand this feedback. What we discovered is that a lot of the content people see as too promotional is posts from Pages they like, rather than ads. This may seem counterintuitive but it actually makes sense: News Feed has controls for the number of ads a person sees and for the quality of those ads (based on engagement, hiding ads, etc.), but those same controls haven’t been as closely monitored for promotional Page posts. Now we’re bringing new volume and content controls for promotional posts, so people see more of what they want from Pages.”

To summarize, if you are posting simply to push your product, install an app, or anything of that nature, it is not going to be seen. Your posts should be about driving customer value such as sharing an article or story that your prospects or clients would want to read. Social media is a powerful communication tool that allows you to interact directly with your customers. Manage it well or hire an outside firm to do it for you.


Is the US Stock Market Rigged?

Is the US Stock Market Rigged?  Michael Lewis’ new book Flash Boys comes out today. It’s all about the confusing world of high-frequency, algorithmic trading. The first 45 seconds are the key part, wherein he explains the mechanism by which high-frequency traders get ahead of retail orders so as to inflate the price you have to pay for a stock.  What do you think?


Vendor Love: 24/7/365

Every business needs vendors who can supply them with what they want and need. Why, then, are so many customer/vendor relationships often adversarial, or non-complementary? It is puzzling, yet true. Changing this oppositional approach is a matter of deliberately redefining the customer/vendor relationship.

Your message to your vendors should be that you need their help to succeed. It starts with the value your company places on business relationships, and realizing the necessity for establishing clarity regarding what is important. Quite simply, it is a matter of integrity, honesty, trust, loyalty and respect.

Get to know your vendors, as you would your customers. Ask your vendors to help you improve your business by suggesting additional products or services they can provide to assist you in reaching your goals. Demonstrate your respect, trust and loyalty to your vendors by including them in your company’s plans for growth and development.

Invite your vendors to your company meetings. If you are a small company with just a few employees, it works the same way. Ask your vendors to kick around some new ideas with you, and get someone from your team to work directly with someone from theirs.

Learn as much as you can about the array of products or services your vendors offer, and not just the ones you have historically purchased. Visit their production, warehousing or training facilities and become familiar with their process. Try to gain an understanding of their challenges in providing the products or services you use.

What happens when you do business in this manner is that people begin to develop relationships which promote consideration for understanding one another’s capabilities and limitations.

Collaborating and sharing ideas strengthens common objectives and invites creativity. When vendors and customers work together, it facilitates moving forward and discovering new avenues for mutual growth. Make it a relaxed and enjoyable experience to communicate with your vendors.

Turn the tables of the traditional customer/vendor relationship. Love all of your vendors, all of the time, in all interactions. Let them in on your company’s goals and dreams. Show them you believe in their contribution to your company’s success, and trust their judgment.

Make it easy for your vendors to be your vendors. It just might prove to be one of the best business decisions you have ever made. 

Douglas Crotty is a business consultant and freelance writer. His business writing interests include: customer/vendor/competitor relationships, organizational continuity, and core values in business relationships. He writes about topics within and outside of the business arena.  Contact Doug @ 352-213-2555 or doug.crotty@gmail.com.

As the Year Winds Down

As the year winds down, and the momentum of the holidays takes over…and the days seem to fly by faster than ever, it’s a good time to reflect on the past year and look ahead.

While you are filling your calendar with visiting family and friends and attending holiday gatherings, take this time to also do some planning for your own growth and development. Resolve right now to review your personal and business goals. Look closely at your goals to get a feel for where you are with accomplishing them.

Is your action plan still relative? Does it need a fresh focus? Make the time to examine your physical, mental and fiscal health. What have you learned over the past few months that you would like to continue applying in your daily life? Are you reading enough, and taking time to appreciate your surroundings? How about physical exercise? Are you concentrating on that with the same vigor and purpose as your mental exercise?

Make a special effort to understand and embrace any changes that you know are going to occur in the next few months, whether they are personal, professional or family related. Relieve yourself of the “change frustration” and approach it positively. You might be pleasantly surprised how your attitude toward change can actually affect the impact it has on you.

Allow yourself some down time…everyday and outside, if possible. Unplug, and go for a walk; or, sit in a comfortable chair in the sun, or in the shade and feel the breeze. Visit a park. Feel alive. Appreciate whatever landscape interests you. Open your mind and heart and regenerate your energies.

Think of ways you can give back, whether you are a young business person, an artist, a banker, or a semi-retired executive. Find ways to help in the community. Get involved in sustainability efforts through your local learning institutions and civic organizations. Increase the scope of your knowledge by attending lectures, films and workshops about those subjects which are part of your world. Help organize something, offer to speak to a group of children or adults about a particular subject in which you have some background and experience. In addition, do something for someone who is less fortunate, someone who would benefit greatly from a good, warm coat, or that extra pair of gloves you rarely wear. Donate some other clothing items you’ve outgrown, or that sweater you got a few Christmas’ ago that never fit right. Visit a local center that accepts these kinds of items and ask them what other items they need.

Prepare to start the coming year rested, refreshed and ready for living everyday with clarity and purpose. Some call it “spirit;” others call it “focus,” or “vision.” Some just call it “planning.”

The point is, whatever YOU call it, know that your preparation for the coming year is an advantage you will appreciate once you start the new calendar. You will thank yourself, and come through the busy holiday season with your feet on the ground and your mind on your goals.

And finally, remember that all of life, including business, is about relationships. Nurture your relationships in every part of your life.

Douglas Crotty is a business consultant and freelance writer in Gainesville, FL. He has had an extensive career in business management, sales & marketing and organizational leadership.

Doug’s passions are developing customer/vendor relationships, strengthening organizational continuity, and helping businesses grow. His column pieces and articles have appeared in numerous business publications, community magazines, social media websites and blogs. He can be reached at 352-331-8849 (O), 352-213-2555 (C), or doug.crotty@gmail.com.

What Instrument Do YOU Play in the Band?

Whether we’re talking about an orchestra, quintet, or a duo…it is all music, played by each member of the band. In a business sense, I like to think of the various positions in an organization as being very similar to that of a band. With a band, each instrument has a certain sound or purpose, and requires specific skills, much like the different positions and departments in an organization. When everyone in the organization is in sync, the “music” flows, and the different instruments blend like a band.

What instrument do YOU play in the band? Do the owners, board of directors and shareholders truly know the scope of the company’s customer involvements?

Are Operations and Customer Service really linked? What percentage is spent on each of those departments, and why? How about Sales and Marketing? Does what they do accurately match the goals of the organization? What percentage of expenditures is allotted to areas like Advertising? Sales? Marketing? Why?

Emergency Preparedness: Is there a budget for it, and is there a Disaster Recovery plan in place in the event of a physical or weather related catastrophe? Who is responsible for developing, executing and monitoring the plan?

Employee Selection: Does the company seek and hire the right people for the job? What are the specific performance expectations for employees? Are they trained to do their jobs? Is there ongoing training and development for new and older employees? As part of their training, does the company empower employees to skip the “Act of Congress” approach in solving customer problems? Are employees trusted to resolve mistakes and problems without waiting until the boss returns from vacation, or from a meeting out of town?

Conceptually, all of the above is so simple and basic; yet, it is almost revolutionary and is rarely done in many potentially good organizations. Even though many companies think they do it, they clearly don’t. It requires the crystallization of everyone in the “band” looking at the same sheet music, being on the same page.

It is doing what really matters, what everyone wants to be and do at work, and how every customer wants to be treated. With that consciousness, with that culture in an organization, there is no “music” that resonates as loudly and as melodiously throughout the different departments.

To keep our companies growing, developing and prospering, we must blend the music among departments. We must play our instrument in the band, and make a concerted effort to do our part in making the music of the organization flow.

Douglas Crotty is a business consultant and freelance writer in Gainesville, FL. He has had an extensive career in business management, sales & marketing and organizational leadership.

Doug’s passions are developing customer/vendor relationships, strengthening organizational continuity, and helping businesses grow. His column pieces and articles have appeared in numerous business publications, community magazines, social media websites and blogs. He can be reached at 352-331-8849 (O), 352-213-2555 (C), or doug.crotty@gmail.com.

Customer Love

Your relationship with your customers is the key to everything you do in your business. It determines the growth, development and ongoing health of your company, whether you are a large corporation, or a small, closely-held start up. I like to call it, “Customer Love.”

What really is Customer Love? It is the consciousness of being 100% customer-committed and customer-focused … every day, every interaction. There simply is no reason that you should not be officially and undeniably dedicated to the success and well being of your customers.

Sometimes, people can get in the way of their own good judgment, and they might think their customers are a pain in the neck, or that they are too demanding. Or, they get aggravated by last minute requests from their customers. Some people fail to appreciate how important it is to love their customers, and to realize that they would not have a job without them. As a young Sales Manager, the VP of Sales gave me a piece of advice which I practice to this day. He said, “Never, ever make your customer work hard to be your customer.”

So, call your customers, rather than emailing them. Make an appointment to sit down with your customers and ask them to help you by offering their thoughts on what else you can do for them. Ask them about their goals for the coming quarter, or season, or next year…and what’s on the drawing board, and how their planning could alter the services or products you presently provide for them. Tell your customers you are interested in their company’s history and its beginnings, and that you are proud to be a part of their ongoing development. If you haven’t already done it, request a tour of their facilities to better understand their product or process. Ask about any proposed changes in their operations that could possibly require your company to make adjustments in scheduling and manpower.

Let your customers know you appreciate and respect the opportunity and the privilege to have their business. Make a pledge to yourself to prove your loyalty to them, daily.

Is there more to Customer Love than that? Of course there is; yet, it is especially important to note that it suggests an attitude that every employee should have as they walk through the door each work day. It must be a 24/7/365 awareness.

If you are in a leadership position in your company, put a program in place to train everyone who is affiliated with your organization to be on board with this thinking, including investors, partners, shareholders, directors and all new hires.

If you are a one-man shop, or a two-woman show…make it your style, your motto, your mantra: “Customer Love.” Get to know your customers and nurture those relationships.

Make it easy for your customer to be your customer.

Douglas Crotty is a business consultant and freelance writer in Gainesville, FL. He has had an extensive career in business management, sales & marketing and organizational leadership.

Doug’s passions are developing customer/vendor relationships, strengthening organizational continuity, and helping businesses grow. His column pieces and articles have appeared in numerous business publications, community magazines, social media websites and blogs. He can be reached at 352-331-8849 (O), 352-213-2555 (C), or doug.crotty@gmail.com.

Financing A Start-Up Business

You’ve done all your market research, completed a business plan, and now you are trying to fund your business. Then, you take your business plan over to the local bank to pick up your check.

The banker takes a look at the business plan and says we will let you know. A few days go by, and the banker calls you and says they are not interested. Now what?!

The percentage of start-up businesses that a bank actually finances is extremely low. It’s estimated between 10-20%. Banks base their underwriting standards on historical information. So, when you walk in the door to ask for money for a start-up, you are already behind. Banks can overcome the lack of historical numbers with a solid business plan, experienced management team, good equity in the business, and a proven idea. If your idea is “out of the box,” then your likelihood of getting traditional bank financing is extremely slim.

What are your options for financing a start-up? Do you have cash in Savings, Investments, or Cash Value in a Life Insurance policy? Do you want to borrow money from your friends or family? Do you have any untapped equity in your home? Do you have availability on your credit cards? Do you have someone interested in partnering with you? How about getting a grant?

Finding the proper financing for your business can be difficult. There are a few things to consider before moving forward. Your product/service that you are offering is going to match the type of financing that you receive. What I mean is, is that the higher the perceived risk, the higher the interest rate. In addition, know what the cost of borrowing does to your bottom line.

There are several sources of Capital you should explore: Traditional Bank Loans, SBA Loans, USDA Loans, Venture Capital, Retirement Plans, Angel Investors and Crowd Funding. All of these have upsides and downsides, so research them, thoroughly.

In the end, if your belief in your product and service is strong, then the cost of financing is all relative. Again, just because a traditional bank cannot provide financing, it does not mean that you have a bad idea.

Douglas Pratt is the President of Modern Capital Solutions, Inc.

Modern Capital Solutions, Inc. is a national commercial finance company that provides financing for all types of businesses. Visit us at: www.moderncapitalsolutions.com.

Franchise Financing Starts with a Good Business Plan

Franchise financing is a very important beginning of starting your Business plan. Do you really need to make a business plan? The short answer is yes. The importance of a comprehensive, thoughtful business plan cannot be overemphasized. Many factors critical to business success depend upon your plan: franchise financing, equipment leasing, commercial real estate finance, outside funding, credit from suppliers, management of your operation and finances, promotion and marketing of your business, and achievement of your goals and objectives.

Some people assume that if they are not going to seek franchise financing support from lenders or investors to open their business that they don’t need to prepare a business plan, but every business should have one. Writing a business plan serves as a road map for your venture when you’re starting out. It can help you figure out many key business elements, including:

  • What you will need to do to get started and what resources (time, franchise financing) you will need to expend
  • What it will take for your business to make a profit and how long that will take…will you need a commercial real estate finance loan?
  • What information potential customers, vendors and investors will need to know in order for you to market your business effectively

Writing your business plan also forces you to think about your business objectively. When you’re done, you will have a more realistic idea of the effort it will require and whether it’s a venture you want to pursue at this time.

Even if you are starting a business from scratch or looking at a franchise you want to create that road map on how you’re business will be executed. A plan will help determine projections of profits, expenses, and if you need financing to start. Franchise financing is just one solution we offer our clients.

When it comes to franchise financing, we have the ability to get the financing you need. Financing a new business or purchasing an existing business can be challenging and lenders look at a new venture as risky, especially if you are a first time business owner. Lenders however like franchisers because there is a history of sales and a corporation to back you up.

It’s best if you can obtain the credit you need using business credit instead of personal credit so that your personal assets are not at a full risk. Also lenders are apt to loan more money to a business than to an individual.