Medical Receivables Financing

Medical receivables financing converts adjudicated and pre-adjudicated healthcare claims into immediate working capital. A funder advances a percentage of the expected net collectible value of a claim, then settles with the provider once the payor remits.

Unlike standard B2B factoring, the underwriting model accounts for payor mix, denial rates, contractual adjustments, and the time it actually takes for Medicare, Medicaid, commercial insurers, or third-party administrators to pay.

Home health agencies, durable medical equipment suppliers, behavioral health groups, infusion providers, surgery centers, and physician practices that carry payor receivables longer than their payroll cycle.

It is most useful when the practice is growing faster than payor remittances refill the operating account, or when census, case volume, or staffing is expanding ahead of cash collection.

Advance rates typically run 70 to 85 percent of net collectible value. Total cost is a function of the discount rate, the days the advance is outstanding, and the actual collection performance of the payor mix.

Strong documentation, clean billing, and disciplined denial management materially reduce effective cost.