Medical receivables
Nobody pays the billed charge. Fund against it and you are funding a number that was never real.
For the factor or specialty lender funding healthcare receivables. The provider is your client. The payer is your debtor, and the payer decides what the invoice was worth after you have already advanced against it.
Every other receivable arrives with an agreed amount. A medical claim arrives with an asking price.
The three numbers
Billed charges, expected reimbursement, and what actually arrived.
A medical receivable has three values and only one of them is a fact. Billed charges are what the provider asked for. Expected reimbursement is what the contract with that payer says the service is worth. Net collectable value is what the provider will actually receive after adjudication, contractual adjustment, denial, appeal and recoupment. Advance rates in this industry look low to an outsider for exactly this reason, and a factor who computes them off billed charges is not conservative. They are exposed.
Net collectable value is a measurement, not an assumption. FactorFox measures realisation against the provider’s own history, by payer and by claim type, in the same way dilution is measured on a commercial book. A provider whose commercial payers realise well and whose workers compensation claims realise poorly is a different credit from one with the same gross aging and the opposite mix, and the aggregate rate hides that completely.
Claim aging starts at the date of service. Not at the date the invoice was generated, which in this industry can be weeks later and is partly within the provider’s control. A provider whose billing lag is stretching is a provider under operational strain, and that shows up in the interval between service and submission long before it shows up in collections.
Handling posture, stated plainly
We describe controls rather than claim a certification. Tenant isolation is enforced at the database level rather than in application code. Audit records are immutable at the database level. Integration scopes are least privilege and revocable per tenant with one call. Connector tokens are encrypted at rest, never logged and never returned by any interface. Outbound communication passes the delivery wall.
Your compliance officer will want the control list and their own assessment, not a badge on a marketing page. The list is on the security page and it is written for the person filling in the questionnaire.
Payer mix
The single most important line in a healthcare credit file.
Two providers with identical aging and identical volume can be entirely different risks, and the difference is who owes the money.
| Payer class | What it changes for the funder | What the platform holds |
|---|---|---|
| Commercial and managed care | Contracted rates, predictable adjudication, denials that follow published rules | Realisation by payer against the provider's own history, denial reasons grouped by code, and appeal outcomes |
| Government programmes | Assignment of the receivable is restricted, so the structure is a lockbox and control arrangement rather than a purchase in the ordinary sense | The arrangement, the account control documents and their dates, held as facts about the relationship. Your counsel decides the structure. The platform holds you to what they decided |
| Workers compensation | Long tails, state fee schedules, and disputes that suspend payment entirely | Aging from date of service with the suspension recorded as its own state rather than as slow payment |
| Personal injury and letters of protection | Payment contingent on a case resolving, on a timescale nobody controls | Held as a contingent receivable with its own eligibility treatment, so it cannot quietly sit in the same pool as an adjudicated claim |
| Self pay and patient responsibility | The weakest realisation in the mix, and the portion that grows quietly as plan designs change | Tracked as its own share of the mix, with movement in that share reported as movement |
Concentration is aggregated under one payer name across every provider you fund, which in healthcare matters more than it does anywhere else, because a handful of payers sit behind most of a regional book.
Operationally
What the funding desk works with.
Remittance advice as evidence
An electronic remittance or explanation of benefits becomes a cash application proposal with the original document preserved. Nothing is posted silently, and the adjustment and denial reasons are carried through rather than netted away.
Denials grouped by reason
A denial is not a slow payment. Denials are grouped by their stated reason so a provider generating the same coding failure every week is visible as an operational problem rather than as deteriorating aging.
Takebacks and recoupments
A payer recovering a prior overpayment out of a current remittance is the specific event that breaks naive cash application. It is treated as its own condition, attributed to the claim it reverses.
Billing lag
The interval between date of service and submission, measured per provider. Stretching lag is an early operational signal, and it is one of the few in this industry that arrives before the money does.
Reserve against realisation
Reserves are set against measured net collectable value by payer rather than against a single blended advance rate carried on the client record since onboarding.
Controls at the record level
Tenant isolation at the database level, immutable audit, least privilege integration scopes, encrypted tokens, the delivery wall on anything outbound, and revocation per tenant with one call.
Related
Bring a provider whose aging looks fine.
We will break their book down by payer against a demonstration set, measure realisation by class, and show you what the blended advance rate was hiding.