MEDICAL ACCOUNTS RECEIVABLE FOR HEALTH CARE PROVIDERS

2007-05-02 10:04:19

( Insurance )



Financing of medical accounts receivable is the best resource for health care providers having cash flow problem to finance short term expenses. Collection of these account receivables is handled by a separate company financing the medical accounts receivable. Thus, health care providers transfer the responsibility of tracking their medical accounts receivable to this company.

Medical accounts receivable financing is a credit line based on the net value of accounts receivables of health care providers from their clients. Most health care providers usually await payments from insurance companies and the government for medical services rendered to their plan holders. Thus, potential cash flow from these deferred collectibles is not available to finance their operations.

Health care providers need effective financial management to sustain their respective operations thereby provides continuity of service to their respective clients. Accounts receivable financing is one option where health care providers can effectively manage their finances by observing the time value of money. It gives them the opportunity of immediately payment for the services they provide and not await to collect payments from insurance companies or other medical facilities to make their scheduled payments.

Advantages of Medical Accounts Receivable Financing

There are other benefits of medical accounts receivables financing aside from sourcing immediate funds for operations. It does not add additional debt to the health care providers’ balance sheet since it is not a loan but payment of accounts receivables. Thus, they do not have debt liability to the company they source out accounts receivables financing.

Medical accounts receivable financing is easier to access compared to traditional loan since health care providers already have proof that the money owed to them are legitimate, well documented and has highest probability of collection. Also, it provides regular cash flow helping health care providers avoid applying for short term loans since there are funds available for its operation. Thus, they maintain financial control of their operations.


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