New practice? Insurance pays slow. You don't have to wait.
You got the NPI, leased the space, hired the front desk, and started seeing patients. Then you discovered the part nobody dwells on in the business-plan template: insurance companies pay in thirty to a hundred twenty days — if the claim clears the first time. Meanwhile credentialing with some payers takes months, which means early visits can bill even slower. Your receivables pile up beautifully on paper while payroll clears every other Friday.
Medical receivables factoring exists for exactly this. A factor advances you most of the value of your outstanding insurance claims — typically 75–85% — and settles up when the payer pays. The practice gets cash on a weekly rhythm instead of a quarterly trickle.
A full schedule and an empty account is the defining experience of a new practice. It's optional.
How medical factoring differs from regular factoring
Standard invoice factoring deals with invoices to businesses — one customer, one amount, one due date. Medical factoring deals with claims to third-party payers: commercial insurers, HMOs, PIP, workers' comp. The "customer" never agreed to your invoice; the payer adjudicates a claim, applies fee schedules, denies a percentage, and remits what it decides to remit. Medical factors underwrite your billing history and payer mix, not a single debtor's credit — which is why a young practice with clean claims and credible payers can fund even when its own financials are three months old.
What to have ready
New practices that get funded fast walk in with the same short file:
- Bank statements — three months, or however many you have. Deposits prove the practice is real and seeing volume.
- A receivables aging report from your billing software — claims outstanding, broken into 0–30, 31–60, 61–90, 90+ buckets.
- Payer mix — the percentage of billings by insurer. A heavy commercial mix reads better than a pile of small, slow payers.
One light caution: Medicare and Medicaid receivables come with assignment rules that restrict how those claims can be sold or pledged. They're not automatically factorable the way commercial claims are, and the details matter. If government payers are a big slice of your mix, ask us before you assume either way — it's a five-minute conversation, not a dealbreaker.
The practice that survives year one isn't always the one with the best medicine. It's the one that never had to choose between making payroll and waiting on a remittance. Keep the money moving.