Richard A. Moore | Financial and Insurance Advisor | Business Consultant
HomeAbout UsServicesThe Risks Facing Medical ProfessionalsCommercial Insurance ProductsMedical Accounts Receivable Management (MARF)Asset MonetizationMergers and AcquistionsHUD Government ProgramsStructured Installment SalesLife SettlementsArticlesBlogContact Us
Medical Accounts Receivable Management (MARF)

Medical Accounts Receivable Funding (MARF): An Alternative Funding Approach For Working Capital


Medical Accounts Receivable (MARF) A Cash Flow Solution for Healthcare Providers. Accounts Receivable is possibly one of a healthcare services or medical providers single largest balance sheet assets, after their real estate.
Unfortunately, due to current inefficiencies and bureaucratic nightmares in our healthcare system a medical provider can wait 15-150 days, or more, to monetize this asset. 

A provider/facility with third party payers has the ability to accelerate the power of this otherwise dormant asset into a powerful tool that will meet current cash needs including practice or service growth and development.

Medical Accounts Receivable Funding is a financing method that has significant benefits when compared to traditional bank financing.

You can meet the challenges of rising costs, diminishing reimbursements, increasing demands caused by the "baby boomer" population and changing technology.  Rising costs which can threaten the facility/practice's income and future stability, can be mitigated.  Growing patient/resident demand will require the most up-to-date services and facilities.  Access to additional working capital will overcome all of these challenges.
Traditional financing program inefficiencies hinder the provider's ability to conduct business, pay staff, order supplies, pay overhead expenses and grow the business.
Most providers turn to their local banks for working capital loans, but due to recent banking regulations/lack of ability to lend to small and medium sized business organization make it difficult to obtain these loans. Additionally the complexity of medical receivables requires an understanding of the medical arena to properly values this asset.

Medical accounts Receivable Funding is based on one of the oldest forms of financing in existence today. Factoring dates back to the 1600's in colonial America.  It is not fully understood consequently some business managers/providers think it is a new form of financing or only for enterprises that are in financial trouble.  Others think the cost is prohibitive, but the facts are...none of these assumptions are correct.

Medical factoring is determined solely by the provider's ability to generate medical bills, there are no limits--you grow, you factor. Most importantly, you the provider now have a clear understanding of when you will have access to your cash flows and can finally concentrate on treating patients. 

 By removing the Medical A/R from the balance sheet it may discourage a frivolous medical malpractice lawsuit.

A Liquidity Squeeze is far worse than a Profit Squeeze. A key management function is to make sure that a practice/facilities receivables and working capital position are managed efficiently.

With high liquidity, a provider/facility can take advantage of price discounts, take early payment discounts, reduce short-term borrowing, benefit from a top commercial credit/bond rating and take advantage of market opportunities only offered by vendors to their very best customers. The Covid supply chain problem has taught many the suppliers deliver to their best paying customers first.

Short Term Debt should be matched to Short Term Expenses and Long Term Debt should be matched to Long Term Expenses.