Medical Accounts Receivable (MAR) Funding: How Simple or Difficult Is It?

MAR funding is a process that a provider can participate in with no disruption to the usual routines. The entire process from application to funding can be summarized as follows.

As with all financial processes, an application for funding is the initial task. The application will give the MAR funding source the basic information about the applicant and his/her business (practice). Information on the applicant's receivables is a key component to understanding if MAR funding is the best choice for the applicant.

Looking at the receivables allows the underwriter to determine if the payor is the correct type for this strategy, and if the provider has the ability to bill and collect efficiently. These issues give the funder a comfort level that he will be paid for the claims he purchases. Duplication of claims is a problem that must be evaluated to determine if such events occur infrequently. Denials, and payor requests for more documentation are events that affect the overall decision on whether to move forward.

Following the application process, the claims have to be valued. Determining net collectible value is absolutely essential when purchasing medical A/R. The funding source wants to buy something that is worth the amount of money paid for it! As we all know, providers bill; and then get paid two very different amounts. The funding source must determine the payable amount for each claim to the payor.

Finally, basic searches and filings are done to protect the funder's collateral (which is the A/R). The MAR funding source cannot buy receivables that are pledged to other financial institutions. Legal review of any existing loans or financing facilities is done to make sure that the collateral is free to be sold. The provider's electronic transmission of claims to be sold is then set up so that the funding process can be quick and efficient.

Once all completed, the accounts is opened for business and the provider can change his reimbursement time from 60 -75 days to 24-48 hours by selling any or all of his claims regularly.

A simple process that facilitates an amazing product!