Where there's a will. How to finance Medicare receivables--legally.
Although factoring transactions involving Medicare (and, in some states, Medicaid) receivables are prohibited by Medicare regulations, a healthcare organization can allow a lender to finance its Medicare receivables and still retain "ownership" of accounts until they are paid. An organization can convert Medicare receivables into cash if: A lender finances between 65 percent and 80 percent of certain "eligible" accounts receivable and takes a security interest in all (or some) of the organization's receivables; Payments on eligible accounts are sent to a designated lockbox account; An amount equal to the amount deposited in the lockbox account is regularly swept into another account (the collateral account); and Legal agreements are drawn up among the healthcare organization, the lender, and any other depository involved. An organization pursuing this financing method should understand the risks involved and prepare legal documents to offset these problems.
Reiss
J B
JB
Di Cioccio
S J
SJ
D000067:Accounts Payable and Receivable; D002202:Capital Financing / Q000331:legislation & jurisprudence*; D014487:Centers for Medicare and Medicaid Services, U.S.; D004282:Documentation; D005377:Financial Management, Hospital / Q000331:legislation & jurisprudence*; D006278:Medicare / Q000331:legislation & jurisprudence*; D010350:Patient Credit and Collection / Q000331:legislation & jurisprudence*; D012306:Risk; D014481:United States