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When healthcare professionals, medical facilities, pharmacies, hospitals, hospitals, therapy groups, and medical equipment and supply companies render their services, they typically send an insurance company an invoice to collect payments owed. Invoices that have not been paid are called medical accounts receivable. (Note that this term typically does not apply to payments owed by patients.)
Many insurance companies do not pay their bills within 30 days, and providers often have to wait 60, 90, or even 180 days to get paid for services or goods. Meanwhile, the healthcare providers needs cash flow to pay staff and suppliers, and to meet other overhead costs.