What is buy and bill?
“Buy and bill” refers to the process by which providers get reimbursed for drugs that are administered to the patient in the office. As the name implies, a provider purchases the drug on their own and keeps the inventory on site until a patient needs it. At that point, they would administer the drug to the patient and then bill the insurance company (typically under the medical benefit) for the drug price plus the administration fee.
Medicare reimburses these drugs with a stand ASP + 6% formula (average sales price plus 6%).
There has been a general trend (especially in non-oncology spaces) towards white-bagging models in which some insurers are requiring providers to get their drugs from specialty pharmacies rather than buying them directly due to the high cost associated with buy and bill for insurers. In a white bag model, a specialty pharmacy would buy the drug and bill for it under the pharmacy benefit- the pharmacy would then ship the drug to the provider’s office for a given patient and the provider would administer it and get paid only for the administration. Brown bagging also happens sometimes in which a patient gets the drug from a pharmacy and brings it to the provider’s office for administration rather than it being shipped directly from the pharmacy to the provider’s office.