Funding for New York Medical Practices

The claim cycle drives cash

A medical office treats a patient, codes the visit and files a claim. The payer reviews it, may pay in full, in part or ask for more documentation, and sends payment later. A denied or pended claim restarts the clock. During all this, the practice's costs continue: front-desk and clinical staff, malpractice coverage, rent and supplies. The cash gap tends to be largest for a new practice, which is building its patient base and its payer enrollments at once, and for a growing practice adding providers.

Owners who track their accounts receivable closely can estimate the size of this float. If it is near a month of payroll, a buffer can make a big difference.

Equipment, space and technology

1. Exam room equipment. Tables, diagnostic tools and basic monitors.
2. Imaging and lab equipment. Office-based imaging or in-house testing adds revenue but demands large purchases and trained staff.
3. Electronic health records and billing software. Setup and subscription costs, with staff training time.
4. Office build-out. Reception, exam rooms, accessibility upgrades and signage.
5. Staff. Medical assistants, nurses, billing staff and front-desk employees, whom you may hire before the added visits arrive.

Buying a practice or adding a partner

Some physicians use funding to buy into an existing practice or take over a retiring doctor's office. This often includes equipment, a lease and staff, and the revenue starts only as patients transfer. A transition period with lower volume and continuing costs is common, and it is useful to have cash for it.

Solo versus group

A solo practice has fewer people to pay but a single point of failure: if the physician is out, income stops. Group practices spread this out but have more overhead. In either case, planning a cash buffer for a few weeks of slower income makes sense.

Credentialing, enrollment and the first months

When a physician joins or opens a practice, insurance enrollment can take time. During that period, the doctor may see patients while some payers have not finished processing the enrollment, and claims may be held or paid late. New practices should plan for a ramp-up in which expenses are at full level but collections are partial.

It is also worth noting the effect of a payer mix. A practice with a high share of patients paying through slower payers will carry a larger float than one that collects more at the time of service. Understanding your own mix helps you size the cash buffer you need. Funding that is sized to your actual cycle usually works better than a round number.

Illustration and application

For illustration only: a practice adding a provider may face $20,000 a month in additional payroll before that provider's schedule fills and claims are paid. If it takes three months to reach a full schedule, the practice needs to carry that cost for the whole period plus the claim lag. Funding sized for that period keeps the practice from draining reserves.

We offer $25,000 to $5,000,000, funded in as little as 24 hours. FICO 500 and up considered, about three months of business bank statements and no tax returns. The application takes five minutes and uses a soft credit pull. Sole proprietors can apply. Start your application.