Richard Geller – Managing Member
Medical Capital Solutions (MCS)
Richard Geller is the Founder and CEO of Medical Capital Solutions, among the most trusted names in medical receivable funding in the USA. His company’s prime responsibilities include funding medical receivables throughout the US, including providing pre-settlement funding, acting as a personal injury case referral service and handling PIP suits in Florida.
His rich experience of 25 years in personal injury includes invaluable time spent as a trial attorney, and as a business owner in funding medical receivables and pre-settlement/surgical. In a detailed interview with me, Richard opens up about his professional journey while also offering key insights regarding the future of the medical funding industry.
Starting out as a trial attorney
Before he founded Medical Capital Solutions, Richard was a trial attorney in New York City for 20 years, including many other states. During these years, he tried almost 200 cases all over the country including Florida, New Jersey, Texas and California, enriching his expertise in the field and garnering widespread recognition.
In 2012, Richard sold his practice and raised nearly $100M to create a Pre-Settlement funding Company called Fast Trak Legal Funding where they funded approximately $2 to $3 million every month. As the owner, he was tasked with the build-out, capital raise, funding process/tracking, and business generation, among others.
In 2015, Richard sold his interest in the company and moved to Florida where he started his current business, Medical Capital Solutions. In his new role, a prominent aspect is cultivating new funding opportunities throughout the US. His business offers three critical services which he describes as the “triad” of funding: providing pre-settlement/surgical funding, funding personal injury law firms and funding medical receivables throughout the US. Richard is also involved in Florida personal injury and Florida PIP suits.
Richard believes that a core component of his success lies in his ability to connect and network with the stakeholders. These include RCM people, medical practices, physicians, and law firms, among others.
Inspiration for shifting to funding medical receivables
‘It’s nice to be able to help people by providing an essential service at a reasonable rate.’
Through the length and breadth of his career, Richard worked with hundreds of doctors in New York wherein he noticed a huge discrepancy between the billing, the receivables and the collections.
He realized that even though doctors would bill out a million a month, they were only collecting 20 cents on the dollar. Thus, despite the high billing, the Providers were always cash short, always looking to borrow money and always stressed out. Ultimately, due to their cash-flow problems, they would negotiate with the insurance companies for $.30/dollar because they needed the money so desperately and they would make bad financial decisions.
Looking for a way to bridge this gap and help doctors with cash flow, risk mitigation, stress reduction, and the overall revenue cycle management of the practice was a huge motivator for Richard to shift fields.
Recollecting his first account, Richard says he had a doctor in New York who billed $2 million/month, and by the end of the year received only 5% (about $1,200,000) which was barely enough to keep his family and practice afloat. Richard bought his receivables for $.25/dollar and handed him approximately $6,000,000.
He realized that even the highly skilled doctors that attend the most prestigious institutions fall short when it comes to the complicated world of medical billing and collections.
Now, with his experience in the field, he can look at both sets of parties to negotiate a reasonable return. This is particularly important in stressful times such as now, during the COVID pandemic, where people are relying on every dollar they get for basic necessities such as rent, food and the continuation of their practice. With low interest rates and low risk investments, Richard is able to help people with the right funding strategies.
Organization structure and process at MCS
Since its inception, MCS has funded hundreds of physicians all over the US and is generally working on 10-15 new deals a month. The company, run by three key personnel operating a staff of 4-6 members, works with chiropractors, orthopedists, radiologists, pain management, MRI centers, surgery centers, etc. Overcoming the stigma attached with funding, which is wrongly associated with the Provider “needing” capital, the company has strict NDA rules. Typically, MCS works with Providers that have outstanding liens between $300,000 & $50,000,000.
The organization’s collection process is well-regulated and consists of both an out-source team that simply tracks the attorney by phone-call and email to follow-up on the claim information, and his in-house staff that tracks the out-source. In situations where the attorney is looking for major reductions to settle a bill, Richard gets personally involved to remedy the situation. With over 25 years of experience in the field, Richard is able to be empathetic to the attorney’s plight and often resolve the repayment without any further animosity.
Achieving new heights of success
One of the key attributes that Richard assigns to the success of MCS is their keen understanding of the personal injury process, and taking the time to understand each individual practice. This affords MCS the opportunity to provide the most competitive pricing. According to Richard, the focus isn’t on making a killing off every provider or taking advantage of them. Instead, the focus is on offering a fair price along with the expertise of having a personal injury attorney and a personal injury physician on their side.
Regarding marketing and growing the business, Richard once against credits networking and connecting with each stakeholder (brokers, surgeons, doctors) on an individual and personal basis. He tries to expand each contact by connecting to every center they are involved in. While this process may be slow, Richard believes it holds merit in the long run. He also spends a lot of time on social media such as LinkedIn.
Formative moments in the medical funding journey
‘You know it’s a living breathing thing, the practice of medicine and so you really need to understand all perspectives.’
Having spent multiple decades in an industry is likely to offer you several formative moments. While there have been numerous success stories, Richard recalls a deal that could have turned hugely negative but instead turned into a learning experience.
The company was offered a wonderful portfolio that was about $50 million. The Provider wanted 20 cents on the dollar, but MCS viewed the portfolio much lower owing to the responsibility of protecting their investor’s money. Ultimately, the deal didn’t go through and several negative factors were uncovered about the practice. Richard believes they walked away from a potential negative deal because of their instinct that comes from experience.
There have also been several instances where after a year of funding the doctors, they are able to manage their cash flow on their own due to MCS setting up a regulated practice. However, rather than looking at this as a drawback, it is a great source of pride for the company to streamline the process in such an efficient manner that it helps doctors be independent while ensuring their billing isn’t suffering.
Additionally, Richard prides his organization having “old-school” values: honesty, integrity, fairness, and a handshake. He and his physician partner have been on the other side of the desk during their initial professional careers and can empathize with the struggles of the people waiting to get paid, allowing them to resolve situations with maximum efficiency for both sides.
‘I have been working with some Providers for 20 years and still are close friends, and that’s a win.’
Improving collections and overcoming challenges
At MCS, collections are handled by the back office or in some cases the Providers themselves owing to the mistaken negative connotation that a Provider needing a collector may reflect a business in trouble.
Here the challenge is in getting the right price while also maintaining a positive relationship with the attorney. In these situations, MCS works with the Providers to protect them during their collections.
In other cases, Richard is personally involved in collections. Here, his advantage as a personal injury lawyer comes into play which helps him relate to the attorney and understand the situation for a better resolution.
Another challenge Richard mentions is understanding each portfolio at a micro-level. For instance, a payout in Texas will be impacted based on the particular city within the state. Every angle of the portfolio needs to be analyzed at an individual and granular level to be effective and efficient.
Currently, with the COVID pandemic still raging on, Richard is looking at outsourcing certain aspects of his work. One of his key aspects at MCS is always visiting the doctor, but due to the pandemic, this isn’t always possible impacting the way business was traditionally conducted.
Business plans moving forward
Moving forward, Richard has new plans for MCS to grow, but at a rate that is comfortable and valuable to the team and clients. He is looking at online advertising in a magazine as well as a combination of pre-surgical and LOP funding for doctors.
Here, the doctors receive a pre-settlement funding from the plaintiff that is a portion of the actual claim and the rest is funded by MCS at a reasonable interest. This way the doctors have the funding in hand for surgeries by receiving the entire amount at a fixed price. Ultimately, the physician receives a much higher funded amount.
Top philosophies and core values
‘You have to take it seriously, and understand that we are dealing with a person’s livelihood.’
The core value is really to take time to understand the practice, the depth of knowledge and also just being nice guys. Personally connecting with a physician to understand their location, their practice history, collection history, type of procedures etc. go a long way in helping the understanding and analysis of each case.
Advice for newcomers entering the funding domain
For people with medical contacts in the field, Richard advises entering the field as a broker. Here, one can find a funding source like MCS and make millions of dollars a year with good clients. Here, networking is important. You must understand the business, and communicate to that you can provide a reasonable rate of return.
Two key learning experiences
- Price things correctly
When it comes to succeeding in the funding industry, Richard strongly believes in offering a fair price. A lot of people tend to become greedy and take advantage of the situation. This can negatively backfire in the long run.
- Operate with integrity
There may be a lot of people in the funding business, but the successful ones are those that do it right. Operate honestly and with integrity and this will help you get more referrals, repeat customers and build a credible name for your business.
Vision for the future of the funding domain
Richard looks at the next 5-10 years as being good for medical funding. The main differences arise based on changes in state reforms. For instance, changes in the unlimited No-Fault at Michigan or PIP in Florida are going to impact business. Similarly, the New York model, provides more insurance benefits for automobile accidents called No-Fault, which allow for funding opportunities outside of the LOP model. Based on the policies enforced by the senate and the reforms, the business policies may change but will continue to grow.