Senex Expands Footprint, Buys $200 million in Debt

Senex Services Corp., a large buyer of healthcare receivables, announced today that it purchased charged-off receivables during the last three months in excess of $200 million from seven hospitals. The deals include a long term “forward flow” provision with five of the seven providers.

Indianapolis-based Senex also reported it added two new states to its service area, stretching its client footprint to 17 states from Texas to Florida and into the Northeast, John A. Torr, vice president of business development, tells insideARM.com. Torr declined to list the states that Senex covers.

Since its inception in 1998, Senex has purchased well over one billion dollars in receivables, originating from nearly 100 hospitals and healthcare providers. Torr said the value of the receivables that Senex bought in 2006 was about equal to its total purchases from 1998 through 2005.

Senex’s debt purchases so far this year are about 10 percent ahead of the same time in 2006, according to Torr.

Senex President Phil Roberts said in a statement, “We closed a record volume of transactions in June, and recently acquired a new multi-million dollar credit facility that will give Senex access to sufficient capital and the flexibility to continue our growth.”

Senex buys healthcare receivables on a non-recourse basis, meaning it can collect on the debt but can’t sell it back to the hospital or resell it to a third party. Generally, healthcare debt is cheaper than comparable credit card debt. In addition, credit-card credit grantors typically have more information on their cardholders, while hospitals treat many patients that may be unable to pay their debts.