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Everything you need to know about Medical Lien Funding if you are a healthcare professional


PART 1: What is Medical lien funding? Is it the right call for you?


If you are a healthcare professional in the Personal Injury space who owns or manages a medical practice, you might be familiar with the struggle of collecting on your third-party personal injury cases, or even end-up battling with the insurance companies over unpaid claims that are not being paid promptly or getting paid at all. Rarely, healthcare facilities can absorb some of the cost or wait to get paid. The Washington Post recently reported that “19 percent of practices surveyed had temporarily closed due to financial struggles, and 42 percent had to lay off or furlough staff”. In today's era with rising costs, it's imperative to get paid promptly. This is where Medical Lien Funding comes in to play as your partner.


In this new Blog Article, Surgical Capital Solutions will explain Medical Lien Funding for Personal Injury Medical Service Providers. Note that medical lien funding is also referred to asAccounts Receivable Factoring”, “Accounts Receivable Financing”, “Alternative Financing”, “Invoice Factoring”, “Medical Factoring” or “Invoice Financing”. Let us explain how it works, if it’s the right call for you, and how you can start selling your aging receivables for an immediate boost of your cash flow without getting into debt.


What is Medical Lien Funding?


Short answer is, Medical Lien Funding is a financial plan to help healthcare businesses get paid faster for work they have already delivered (think medical procedures and treatments in chiropractic, orthopedic, physical therapy, neurology, as well as many other specialties). The funding process is structured through the sale of your aging medical receivables (outstanding/unpaid invoices) for a percentage of the face value of the invoice. This structure is individualized to meet the physician’s needs to provide immediate cash flow for working capital enabling you to pay employees, suppliers, etc. This also allows you to grow your business effectively, whilst the Funding Company is now responsible for collecting on the invoices. This also means you won’t have to wait for your patients to pay and for their cases to be settled.


How does Medical Lien Funding work?


Most Medical Lien Funding transactions have two installment payments. The first installment covers 70% to 90% of the invoice. It is deposited in your account as soon as your client gets invoiced. Note that the invoice must be for completed services or a delivered product. Once your client pays the invoice in full, the factor deposits the second payment in your account. This installment covers the remaining 10% to 30% that was not advanced initially, less the fee.


Surgical Capital Solutions is different from any other Medical Lien Funding companies because we pay for the LOPs (Letters of Protection) on full upfront, and then we wait for the settlement to be reimbursed. We take all the risk and purchase the complete amount of your invoices (minus fee for collecting) upfront and immediately. You can sell your receivables, weekly, monthly, quarterly, etc. Whatever suits your practice's financial needs.


Not only do we pay for your aging receivables for already performed procedures/treatments, but we can also pay for patients’ receivables as they are being treated. Always in full.


Is Medical Lien Funding a loan?


Medical Lien Funding is not a loan. On the contrary, you sell your medical aging receivables at a fair discount to a Medical Lien Funding company in exchange for prompt cash flow. The Funding company then owns the invoices and gets paid when it collects on the balance due.


Also, unlike loans, which often come with stipulations about how you can spend the money, your cash from selling your aging receivables can be spent with no restrictions.


Read our full take on Bank Loans -vs- Lien Funding in our blog article: Medical Lien Funding -vs- Bank Loans. Which one is best for you?


Benefits of Medical Lien Funding


Medical Lien Funding has a number of advantages for medical practices. The obvious benefit is that cash flow is released shortly after invoices are purchased and is available for capital investment. This may be very valuable for businesses that are short of working capital for monthly payments and obligations or wish to grow and invest in equipment, remodeling, hiring more staff, etc.



Here are some examples of how Medical Lien Funding has assisted Medical Practices and Healthcare Providers:


· Collect funds faster for unpaid invoices

· Save valuable time spent collecting unpaid invoices

· Save money on hiring staff for collecting unpaid invoices

· Manage payroll in time

· Hire new employees for core activities

· Invest in Marketing & Advertising

· Invest in business growth

· Pay rent and reoccurring bills

· Pay vendors, suppliers, or secure better deals

· Buy more inventory to increase margin

· Buy supplies and materials for new projects

· Buy new assets and/or equipment

· Cover high overhead costs

· Repair equipment

· Remodel your practice

· Cope with unexpected expenses

· Jump on unexpected opportunities that require cash in hand, fast.


Is Medical Lien Funding the right option for you?


Healthcare professionals who work within the personal injury space can experience collection problems due to slow-paying customers, and those cash flow gaps continuously restrict the growth and operation of their healthcare businesses.


If these statements sound familiar, then Medical Lien Funding is definitely the best option for you:


· Are you tired of waiting around for payments to come through?

· Are you not able to immediately collect on the bills you currently have as un-paid?


When this becomes an ongoing problem and may no longer be a feasible option for your practice, often getting an extra source of cash to sustain/expand operations or to take advantage of new market opportunities takes the pressure off.


Briefly put, Medical Lien Funding is the right solution for your business if:


1. Your cash flow problems are due to slow-paying claims

2. You need money to pay operational expenses and/or grow your business

3. Your business has experienced some setbacks due to the pandemic


If you or your business are struggling due to some or all of the reasons listed above, Surgical Capital Solutions can help! We can finance your unpaid medical receivables up to 4 years old. Our Medical Lien Funding solution can provide you with immediate funds in exchange for your AR, fully paid upfront so you can pay for all your operational expenses and focus on running your business.


At Surgical Capital Solutions, we are healthcare industry veterans with more than $600 million dollars purchased in AR and over 30 years of experience in personal injury claims, healthcare, and legal affairs. We take pride in offering highly competitive rates, prompt service, and fast turnaround. You may contact our team directly at 1-844-784-3500 or fill out our contact form here.



To learn more about the Washington Post Article "Small medical practices struggle to survive amid coronavirus pandemic" click here.


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