GPA Capital recently updated its “assessment of threats to physicians’ independence” we now share the results of our Physicians’ Independence Research Update.
The bottom line… most physicians are finding it hard to compete in the current healthcare environment and at the same time, they would rather “not” go to work for someone else, retire, or worse yet, sell their practice for pennies on the dollar because it’s not generating the income it should be. Not only is our survey revealing, but so are the comments gleaned from our team of experts.
Consistent with debt coverage and additional cash available at the end of the month, GPA Capital has put together a program which specifically addresses the concerns of today’s independent physicians.
Looking forward to serving your capital needs for your new office, acquisition, expansion or refinance. Complete this short form [Express Loan App] and get it back me, (confidentially, of course). 24 hour loan approval in most cases.
Written by: Jim Tate
We have reflected in earlier posts the critical importance of achieving a high MIPS score. Reimbursement, practice value, and professional reputation are all directly impacted by a MIPS score. Here is yet another collateral impact of a MIPS score: the ability to obtain and maintain a loan. A tip of the hat to my friends in the healthcare finance business over at Grice, Pope and Associates who alerted me to this pearl of wisdom.
First, a little financial loan lesson from Wikipedia on the infamous debt service coverage ratio:
“The debt service coverage ratio (DSCR), also known as “debt coverage ratio” (DCR), is the ratio of cash available for debt servicing to interest, principal and lease payments. It is a popular benchmark used in the measurement of an entity’s (person or corporation) ability to produce enough cash to cover its debt (including lease) payments. The higher this ratio is, the easier it is to obtain a loan. The phrase is also used in commercial banking and may be expressed as a minimum ratio that is acceptable to a lender; it may be a loan condition. Breaching a DSCR covenant can, in some circumstances, be an act of default.”
So there you have it. The DSCR is based on the documented ability to have enough cash flow to repay a loan. Although there is variation among lenders, a DSCR greater than 1.2 is good enough to obtain a loan. Many providers and practices will find if they are below 1.2 they will have difficulty getting a loan. If your cash available to service a loan should drop, as might occur when a low MIPS score suddenly triggers a reduction in Part B reimbursement, you might be in trouble. You could face difficulty in obtaining a new loan. Even worse, if you have an existing loan with DSCR covenant, you could immediately be in default. In 2019 potential Part B negative adjustments can be up to 4% and will increase 9% in 2022. Forewarned is forearmed.
The reasons to make a priority of achieving a high MIPS score continue to mount. Next week I’ll have another one for you.
High deductibles with increased co-pays are making Working Capital (cash flow) harder to come by. We see this at GPA Capital by the increased number of calls looking for long-term loans. However, many times we are able to help practices with a debt free solution that provides – and even increases – their cash flow.
In the past, Medical Factoring has only been available to hospitals and other large facilities. However, GPA Capital and our investors have created a Factoring Program tailored to small and medium healthcare practices. [1 minute video].
For clarity of the problem and multiple solutions, we dove tailed the summary above with this family physician’s actual case study. Next week we will give you some pointers on how to compete with the “big box” national dental chains moving into your area.
We look forward to serving your capital needs through our wide range available options. Simply complete this short Working Capital Form to get started.
CMS estimates that 58% of Medicare Part B billing comes from providers who will be subject to the MIPS program. What you do the remainder of 2017 will affect your reimbursements in 2019 and very well can cause increase or decrease in your patient population. GPA Capital announces its MIPS web page for our readers and clients. As financiers, it’s critical not only to provide capital by loans, but also revenue enhancements, reduced costs and revenue boosters.
Get started here: [Learn]
Considerations often overlooked when financing, particularly when planning your exit:
1. Direct access to the decision maker. 24 hour approval capability.
2. Obtain a practice analysis to maximize to your business value.
3. Survey the capital markets to assure the best rate/terms and loan structure.
4. Make sure you are using all revenue sources available for your specialty.
5. Make sure you are compliant and paying zero for merchant fees
GPA Capital recently arranged a $375,000 loan for the acquisition of a 30-year-old dental practice in South Florida. The operating Dentist was retiring and the existing office manager of 20 years purchased the business. The Manager partnered with one of the existing 1099 employed Dentist. GPA Capital arranged 90% financing on the purchase of the business and provided an additional $40,000 in operating capital to the new owners. Prior to the practice valuation GPA Capital implemented a strategy for cost savings, patient growth and revenue enhancement. Here is a white paper worth your reading [CLICK]
We look forward to serving your capital needs through our wide range available options. Simply complete this short Telephone Appointment Request to get started.
Announcing the GPA Capital Blog where GPA will be bringing you news on Financing, Revenue Enhancements, Compliance and other topics that are important to you, our physician clients. As our loyal readers and followers, we will share with you our global and proprietary access to state-of-the-art Financial Solutions to meet your challenges.