Businesses that bill insurance or Medicaid face a hard timing problem: they deliver care and pay staff now, but reimbursement arrives 30, 60, or 90-plus days later. That gap can strangle cash flow even for a busy, profitable provider. This guide covers how these businesses bridge the reimbursement gap.
Who this affects
The reimbursement gap hits medical practices, home health and home care agencies, physical therapy and ABA clinics, dental practices, behavioral health and addiction treatment centers, labs, durable medical equipment providers, and ambulance and EMS services — any business that gets paid by a third-party payer rather than the customer at the point of service.
Why the gap is so hard to fund
Payroll, rent, and supplies are due on a fixed schedule, but claims must be submitted, adjudicated, and paid — a process that takes weeks or months and can involve denials and resubmissions. Banks are slow to fund against pending claims, and providers often hold little hard collateral, so growing agencies run short despite strong billing.
How providers bridge it
Revenue-based funding advances a lump sum against the deposits flowing through the business and is remitted as a share of revenue — useful for covering payroll and operations through the reimbursement lag. Medical receivables financing works against the value of your pending insurance and Medicaid claims specifically. Both are approved on your revenue and receivables rather than your credit score, so a provider with steady billing can be evaluated quickly.
The bottom line: if you bill insurance or Medicaid and wait months to get paid, funding can keep payroll covered and the doors open while reimbursement catches up. Y Millennial Funding is a direct funder of revenue-based funding for providers doing $25,000 or more in monthly revenue — a small business loan alternative, not a loan. Not all applicants qualify.