Medical Factoring

In a typical factoring arrangement, the factor advances a percentage of the claim, often 80 to 85 percent, holds the rest in reserve, and releases the balance minus its fee once the payer pays. The factor usually steps into the collection process, contacting payers directly and sometimes patients, and the provider's account is redirected to the factor.

Most medical factoring is done with recourse. That means if a claim is denied or goes unpaid, the provider has to buy it back or repay the advance, so the risk of non-payment stays with the provider. The reserve and the chargeback together are what protect the factor.

Recourse and the collections takeover are the two features that define traditional factoring, and they are the two features practices most often dislike: the money can be clawed back, and someone else starts talking to their payers.

For a practice, factoring can free up cash, but the recourse and the collections takeover carry real cost. A denied claim months later can become a bill back to you, and a factor contacting your payers or patients changes a relationship you have spent years building. Knowing which features apply before you sign is the difference between predictable cash and a liability in disguise.

Copay is not factoring. There is no recourse, so a denied eligible claim is Copay's loss, not yours, and there is no chargeback. Copay does not take over your collections and does not contact your payers or patients. You submit claims exactly as you do today, Copay purchases the eligible ones, and you are paid the next business day.

See how Copay is different.