Medical Receivable Factoring vs. Healthcare Factoring

When it comes to factoring in the healthcare industry, there are two different kinds of companies that can benefit from what’s commonly referred to as healthcare factoring and/or medical factoring. Both types of healthcare companies make ideal invoice factoring candidates because both routinely bill creditworthy slow-paying customers. The Marketing Manager at PRN Funding took the time to explain the differences in the video below:

The first variation of the healthcare factoring model involves entrepreneurs who own a service-oriented business within the healthcare industry. Specifically, medical transcription services, medical equipment providers, medical supply companies, medical staffing agencies, temporary nurse registries, outsourced medical coding companies, medical billing services, etc. can all benefit greatly by factoring their invoices. Healthcare factoring can be extremely beneficial for vendors hoping to maintain a positive cash flow when their customers (medical providers) take weeks or months to pay them for their services or goods. Click here to learn more about PRN Funding’s healthcare factoring solution.

On the other hand, medical receivables factoring includes a third party payer (i.e. Medicaid, Medicare or private insurance company) within the medical invoicing process. In this instance, the medical provider is the one who benefits from factoring.

Medical receivables factoring is a great way for medical providers to bridge the cash flow gap that is oftentimes created by slow payments from insurance carriers and other third-party payers.

As experts in the healthcare factoring marketplace, PRN Funding has developed relationships with credible medical factoring companies that specialize in helping hospitals, nursing homes, physicians’ practices, etc. maintain a positive cash flow.

Click here for more information on healthcare factoring vs. medical factoring.

Aging Workforce is Straining Social Security

Did you happen to see the Associated Press article on Monday entitled: Aging workforce strains Social Security, Medicare?

If not, the healthcare factoring specialists at PRN Funding summarized the startling findings below:

Social Security and Medicare, the government’s two largest benefit programs, are in worse shape than previously thought due to the increasing aging population and the slow-rebounding economy. Moreover, Medicare is in the worst shape because of rising health insurance costs.

The predictions from last year was that the Medicare hospital insurance fund for seniors would run out of money in 2024, and Social Security’s retirement fund would run out in 2038, with the disability fund running out of money by 2018.

The latest projections from March indicate that the disability fund would run out of money two years earlier in 2016.

New Medical Billing and Coding Professional Association

The APMBA (Association of Professional Medical Billers and Administrators) officially opened this week, and they’re accepting memberships to the organization.

What’s more, the new association is offering ½ off the Platinum and Gold memberships until 05/31/2012.

    1. Platinum Membership: $199.00 covers 1 year membership benefits including the CMBA and CMBA-D exam.
    2. Gold Membership: $159.00 covers 1 year membership benefits includes the CMBA exam
    3. Silver Membership: $99.00 membership only does not cover exam (not eligible for ½ off discount)
    4. CMBA-Certified Medical Billing Administrator
    5. CMBA (D) – Certified Medical Billing Administrator (DME)

      Find out more details here.

      CDIA (formerly MTIA) Closing its Doors

      Did any of our medical transcription invoice factoring blog readers see the letter that the board members of the Clinical Documentation Industry Association posted on their web site?

      If not, here’s a copy of what’s on the site’s home page:

      Dear CDIA Members and Supporters,

      The Clinical Documentation Industry Association (CDIA) has weathered many financial challenges over the past few years from the significant contraction in the marketplace and overall unhealthy economic conditions. In response, we rebranded the association to expand our reach beyond medical transcription, editing, voice, and speech recognition to encompass every touch point in the clinical documentation continuum. Our flagship event, the CDIA Annual Conference, had broadened the educational program to bring together these complementary audiences.

      Unfortunately, the external factors have become too strong for the association to overcome and this is why we are writing to you today. On behalf of the CDIA Board of Directors, we regret to inform you that the association is closing and the annual conference planned for April 2012 in Baltimore, MD has been cancelled.

      This has been a very difficult decision that the Board did not take lightly. The association’s finances could no longer sustain the organization to serve the members and support the annual conference. Over the next several weeks, CDIA representatives will be winding down the association and information will be sent regarding recent payments made to the association.

      Thank you for your support of CDIA and participation in the association. We encourage you to continue to promote the spirit of CDIA’s mission, values, and advocacy platform as you continue your involvement in other associations, including the Health Story Project ( and AHDI (


      The Clinical Documentation Industry Association

      The medical transcription invoice funding specialists asked the president of PRN Funding, Phil Cohen, what his thoughts were on the CDIA’s closing, and this is what he had to say:

      First and foremost, on a personal level, I’m saddened by the announcement. I’ve either exhibited or attended the annual CDIA show since 1992! However, I don’t believe that the association’s closing is any indication that the medical transcription (or clinical documentation industry) is hurting. Rather, it just shows how the amount of mergers and acquisitions have been affecting the industry. To date, there are fewer smaller MTSOs in the industry and there are also fewer large players in the industry. For an association to remain active, viable and financially sound, it needs more contributing members, not fewer.

      QUESTION: What are your thoughts on CDIA’s closing?

      PRN Funding’s 2012 Trade Show Schedule

      Curious about PRN Funding’s healthcare factoring services?

      Check out our 2012 Trade Show schedule. We’d love to see you if you’re planning on attending any of the shows below:

      Trade Show Location Dates Booth #
      NAHC Leadership Summit Las Vegas, NV Jan 23-25 303
      ACE12 Indianapolis, IN Aug 8-11 108
      NPDA Orlando, FL Sept 12-14 TBD
      Decision Health Las Vegas, NV Nov 2-4 TBD

      2011 Medical Coding Salary Survey Results Are In

      Last month, the American Academy of Professional Coders (AAPC) announced the 2011 results for its annual salary survey of health care professionals on the business side of medicine. Participants included medical coders, medical billers, auditors, and physician practice managers.

      Some of the survey’s findings include:

        1. The average salary for a Certified Professional Coder (CPC) was approximately $46,800.
        2. Approximately 62% of respondents said they work primarily in physician-based coding; 10 percent are hospital coders; and 16 percent said they do both types of coding.
        3. Respondents work in every specialty, with the greatest number in family practice (10.3%) and internal medicine (5.7%). Others include emergency medicine (5.2%), general surgery (4.5%), and obstetrics/gynecology (4.3%)—rounding out the top five specialties.
        4. The average wage in 2011 for a Certified Professional Coder (CPC®) was approximately $46,800 (up $1,400 from last year)

          Click here to see all of the 2011 Medical Coding Salary Survey’s results.

          Fraud Allegations Surrounding Medical Billing Company: JJ&R to Pay Millions

          The medical billing factoring and medical coding invoice funding specialists at PRN Funding came across an interesting article that we believe is important to share with our Medical Billing and Medical Coding readers. We summarized the article below. You can read the article in its entirety on, Ca Medical Biller to Pay $4.6M to Settle Fraud Allegations.

          Federal prosecutors alleged that Janzen, Johnston & Rockwell Emergency Medicine Management Services Inc. inflated claims that it had coded on behalf of emergency room physicians in Louisiana and California, and as a result of the fraud allegations, JJ&R agreed to pay the federal government $4.6 million.

          From approximately 2000 through 2007, JJ&R used a coding formula that tended to generate claims for a marginally higher level of evaluation and management service than physicians had actually provided. In addition, JJ&R allegedly often failed to comply with Medicare’s coding rules governing claims for teaching physicians, resulting in claims that were not properly payable.

          Factoring for Medical Billing Companies – FAQs

          A lot of questions can come up when a business owner starts researching medical billing funding solutions—the idea of selling their invoices to a factor or medical billing funding agency.  This article addresses some of the more frequently asked questions:

          What differentiates a factoring firm who funds medical billing companies from a bank?

          First and foremost, since medical billing factoring is not a loan, there is no debt on your medical billing company’s balance sheet. Moreover, factoring firms have the ability to make a quick decision regarding your medical billing funding options, while banks may take weeks—even months—to approve a loan.

          Furthermore, factors determine lines of credit based on the creditworthiness of your customers, while banks focus on your company’s financial history and cash flow. In other words, a medical billing funding agency looks to your company’s future while banks place emphasis on your company’s past.

          How long does it take to be approved for medical billing funding solutions?
          In general, a medical billing funding agency will begin its due diligence process after receipt of a signed contract. This process can last anywhere between 1-5 business days, and money is moved at its conclusion. Thereafter, a medical billing service can receive funds in as little as 24 hours within verification.  See our medical billing factoring process and learn our medical billing funding options can benefit your medical billing business.

          Click here to read more Frequently Asked Questions and Answers related to factoring for medical billing companies.

          How Medical Billing Companies Can Avoid the Double Credit Crunch

          In this economy, many service-oriented small businesses are struggling to obtain cash on two fronts – (1) Acquiring or extending a line of credit and (2) Getting their customers to pay in a timely manner.

          Outsourced medical billing providers are just one type of business that is being affected by the “double credit crunch.” On the one hand, banks have tightened up on their lending criteria, and most are slashing credit lines instead of extending them, which means the likelihood of a medical billing provider securing bank funding is slim-to-none. On the other hand, even though an outsourced company’s main job is to bill insurance companies correctly so physicians (their customers) get paid quicker, those same physicians are oftentimes notorious for stretching out their payables.

          Fortunately, there is an alternative financing option that can help speed up the payables process.

          Medical billing accounts receivable factoring is the conversion of receivables into cash by selling outstanding invoices to a factor. A viable option for medical billing companies in the early stages of business development and /or during rapid growth, accounts receivable factoring is a financial solution that gives medical billers immediate cash to manage operations more efficiently. Here are some additional key concepts about this practical financing alternative.

          Medical Billing Accounts Receivable Factoring is:

          • A way to fill the gap between when your company provides outsourced billing services and when the physicians pay. Simply put, medical billing invoice factoring can turn weeks into hours or days.
          • Based on your customers’ credit history, not yours. If your company is providing billing services to a creditworthy physician’s office or medical facility, then your business is a good candidate for accounts receivable factoring.
          • A simple, fast method to sustain your “business as usual” relationship with your customers. Your company can continue to provide medical billing services to your customers with a set-term payment; but with accounts receivable factoring, you no longer have to wait to be paid. By working with a factoring firm, your company can easily obtain cash advances of 80% of the invoiced amount. Cash can be obtained within hours and as often as needed.
          • One of the oldest methods of providing working capital. Dating back 4,000 years, receivables factoring has long been used as a feasible and easy way for businesses to obtain cash flow in order to cover expenses while experiencing growth.
          • A chance to obtain cash without providing personal collateral or increasing interest expense. Invoice factoring is not a loan and does not “muddy up” your medical billing company’s balance sheet. You do not accrue interest or penalties. The medical billing factoring fee is clear and objective; it is based on the size of the invoice, the length of time it takes to collect the payment, and the creditworthiness of your customers.
          • An opportunity to build your outsourced medical billing company’s credit: With adequate cash flow, you can use money from accounts receivable factoring to clean up your debts as well as pay overhead, salaries and invoices. This will improve your credit history and make it easier to obtain credit from vendors and other financial institutions in the future.

          By working with an accounts receivable factoring company, your company’s cash flow problems can be solved. In most cases, a medical billing company can receive the majority of what’s owed to them within hours of selling their invoices to a factor. Factoring for your medical billing company will help you avoid falling prey to today’s “double credit crunch” that so many other small businesses are enduring as a result of the current economic climate.

          **NOTE: This article is a re-printed version of what was also published on

          How Groupon Makes Factoring Invoices Look Cheap

          Tracy Z wrote an interesting post on comparing and contrasting the cost Groupon vs. the cost of invoice factoring.

          Rightfully so, Tracy defined the marketing lure of Groupon as “marketing with no upfront fees.” For cash-strapped business owners looking to make more sales, free advertising sounds like a good deal–That is until you break down the numbers:

          • 50% discount to customer
          • 25% fee to deal provider
          • 25% net to business owner

          In essence, the business owner only makes 25% AND they have to wait to get their portion, in installments, over time.Tracy outline a simple example, where 1/3 of the business owner’s profits was paid in 5 days, 1/3 in 30 days and the balance within 60 days:


          -$50,000 discount

          -$25,000 fees

          =$25,000 received by business owner (33% or $8,333 immediate advance, with the remaining $16,667 paid out over 60 days.)

          Then Tracy used the same scenario as though the business owner were factoring:


          -$5000 factoring fee (average 5%)

          =$95,000 received by business owner (80% advance or $ 80,000 upfront, with the balance less the fees received once debtor pays in full).

          Pretty interesting comparison, huh?

          Click here to read the article Tracy referenced in her post: Why Groupon is Poised for Collapse.