What comes to your mind when you hear the words… “Funding Company”?
I’ve had attorneys and imaging center owners both use the term “necessary evil” on more than a few occasions. I’ve had other attorneys and imaging centers also call them “vital”.
So, why is there such a divide and a black-and-white view of medical funding companies in our industry?
You can come up with many reasons, but at the end of the day it all boils down to contracts and settlements.
Contracts have been under the microscope for the past few years. Cases against medical funding companies, pre-settlement advance companies, and physicians have been on the rise throughout the United States. And the main reason behind this increase is bad contracts.
There’s a perfect mix when it comes to the formation of a medical contract in personal injury. There has to be room for the case to breathe. There also has to be room for everyone involved to be compensated fairly if the case is valid. What our industry has seen over the past few years is an influx of speculators. A lot of the medical funding companies that popped up do not have a background in finance or medicine. They are strictly groups using our industry like the stock market. Trying to make the quick buck until the market is drained due to their greed. They are only willing to stay in the game until laws change. They are also the ones behind bad contracts that lead to greed that leads to laws being changed.
And this moves us to the second part of this discussion.
Settlements are the final tipping point when it comes to the worth of a funding company. Bad contracts and greed lead to difficult settlements. Difficult settlements lead to unhappy adjusters, pissed off injured clients and frustrated legal professionals. Settlements that are all over the map, because of these bad contracts, also put everyone in the industry under a microscope.
So what do we do to fix this?
First, know your funding source!
Who are the owners? Are they a private equity firm? Are they knowledgable professional who understands their discipline? Are they going above and beyond to care for your client?
Second, know a bad contract!
Is your starting point of negotiations always near 100%? Are they always pushing treatment to a specific location or medical provider? Do they always seem to suggest the same treatment plan? (NOTE: This also goes for In-House Funding and Health Insurance… these can be terrible contracts too.)
There are definitely a lot of other factors that go into testing your medical funding source. But, when you peel back the onion, this is the baseline. This is where you can start your testing to see just how they serve your clients.
I’d love to hear your thoughts on this.
Feel free to comment below.
As we move into our new post-quarantine world, it is vital that we analyze every aspect of our business and our relationships. And one great place to start is with our companies who help or hurt our overall industry image.
Looking forward to a healthy discussion and being of help to you and your clients!