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93 out of 100 doctors surveyed said they have had to personally cover payroll and other business expenses due to slow paying receivables.

As you know, cash flow is the lifeblood of any practice. The first step to any solution is making sure the claim is clean, error-free and submitted correctly. The challenge for most providers begins when practice expenses need to be paid or payroll covered. The challenge continues when those insurance payments have not arrived in time to cover these expenses.

This is known as a cash flow gap and is illustrated as follows:

• The patient is seen on day 1.
• It takes 9 days before a claim is submitted to the insurance company.
• The insurance company takes approximately 40 days to pay; Patients take approximately 80 days to pay.
• You must pay for your supplies, payroll and other office expenses and are running short on cash to cover the expenses by day 30.
• Your cash flow gap is 20 days and 60 days respectively.

This familiar scenario shows that your practice expenses will need to be paid before cash is actually received from the insurance company. In our simple illustration, a 20-day cash flow gap is created from the time the patient is seen until you are paid by the insurance company and a 60-day cash flow gap until the patient portion is received.


The doctor is then faced with covering this cash flow gap. So, how do you cover the cash flow gap? There are many creative ways to cover this gap, but the following are the most common methods used among the doctors surveyed.

• Delay making payments. While certainly covering the cash flow gap, this method creates credit problems and eventually increases supply costs or even worse, gets you on COD terms with your suppliers.
• Get a loan from the bank. This is a great idea but may tie up collateral needed for long-term financing projects.
• Reach into personal checkbook (many doctors have even had to put a 2nd mortgage on their house). This causes undue stress to the doctor and the doctor’s family.
• Draw from cash reserves on hand. This, of course, is the best solution if cash reserves are adequate to pay practice expenses, thus allowing the doctor to cover the gap internally until payment is received from the insurance company. Unfortunately, however, this is not always the case.
• Turn down new patients and stop growing your practice because of insufficient cash to expand. This is very disastrous because it prevents the practice from growing and reaching its potential.

In a perfect world, this cash flow gap would never be a problem because everyone would pay exactly on time and terms would always match. In the real world, however, this cash flow gap is a reality.

With malpractice insurance at an all time high and staffing expenses on the rise, medical practitioners are beginning to feel the squeeze. They are no longer content to wait 30–60-90 days for the insurance companies to pay.

Finally, a way to cover payroll and other practice expenses without having to refinance your home (again).

Many practitioners are now turning to the program to convert the biggest asset they have — accounts receivable — into cash to be used for:

• Advertising
• Inventory
• Staffing
• Expansion
• Equipment purchases
• Marketing
• Taking advantage of supplier discounts

provides working capital solutions for medical practitioners nationwide. has helped hundreds of medical practitioners eliminate their cash flow gap and expand to reach their full potential.

: Here's how it works