Medical Finance Line of Credit Based on Billing - Here’s How it Works:
You submit your bills to us
If Medical-Billing.com is doing your billing, we arrange for a courier service or prepaid envelope with which to forward your bills and encounters to us. We also provide you with our electronic claims system whereby your office staff can provide us with the information.
We then code the claims and bill them out to the respective insurers. We then have one of our professionals review the claims and post our evaluation of what the Net Realizable Amount or NRA is.
Net Realizable Amount (NRA) - the amount that we evaluate will be the amount paid on the claims submitted.
This amount varies depending on the way it is coded, the contracted reimbursement amount, the payer mix, payer history, and other variables that require professional evaluation.
So here is how the Line of Credit works
On January 1
- NRA Receivables 100,000
- Line of Credit 80% 80,000
- Amount Outstanding 40,000 (that you have already borrowed under the Line)
- Amount available 40,000
- If you want to draw on your line of credit, simply fax or email the amount required.
We wire the funds into your account on file within 24 hours.
Your Line of Credit varies as new billing gets incorporated into the number, and payments made by the insurers get posted thereby reducing the NRA number.
For example, if on Jan. 2, you billed out 10,000, then the NRA Receivables value is 110,000, and your Line of Credit is 88,000. If on Jan. 3rd you receive payments of 20,000, then the NRA receivables is now 90,000, and your line of credit is 72,000.
You can always borrow up to the amount of the Line of Credit on that day, as payments that will lower the amount you can borrow also lower the balance as they are applied to the outstanding amount as per the following formula.
On Jan. 4th you would get a statement from us that looks like this;
