What are the boundaries of our recent economic catastrophe? Unfortunately, the answer tells us the boundaries are endless and there is no immunity to this financial holocaust.
Medical providers have seen (or very shortly will see) payment intervals begin to extend from all carriers. Starting with government payors, we see California and Illinois not paying for services or equipment already rendered. Other states will undoubtedly follow in the same pattern. State revenues are coming to a screeching halt with decreased tax collections, no ability to borrow in the short term and increased demand for municipal and governmental services. The federal government just committed to a $700 billion bail out of our financial institutions. One must immediately assume that, as in the past, federal reimbursements will decrease in dollars paid, and become significantly protracted.
Commercial carriers have significant exposure to the current financial woes through their investments in mortgage backed securities and derivative instruments. Logic tells us that delayed payments provide "float income" which can offset, although minimally, some of their losses. Not a pretty picture for the medical community. Solutions are few, as conventional lenders are not in that business as of now!
Medical Accounts Receivable (MAR) funding is truly the only solution. The modest discount paid for this service is worth the expense. MAR funding provides a predictable steady cash flow and up-front capital to fund infrastructure additions designed to generate additional income through additional services or products. It is the only game in town...and....coincidentally the best solution for the medical community.
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