Buy and Bill Reimbursement Explained: How Independent Infusion Centers Can Maximize Net Cost Recovery

For independent infusion centers and specialty providers delivering high-cost, high-touch therapies, the buy and bill model presents a complex mix of opportunities and challenges. Providers purchase specialty drugs upfront, administer them in-office, and then bill payers for the medication and its administration. While it grants greater control and potentially better margins, this approach demands precision, robust data, and expert pharmacy operations to ensure strong financial performance.

Pros and Cons of Buy and Bill

Advantages:

• Supply chain control & drug integrity: Providers oversee procurement, storage, and administration—key for biologics and sensitive medications.

• Higher reimbursement rates: Medical benefit drug payments typically exceed pharmacy benefit rates.

• Improved patient experience: Infusions are coordinated in-office, ensuringquality care and adherence.

Disadvantages:

• High upfront capital & cash flow demands: Drugs must be purchased pre-administration, potentially tying up significant working capital.

• Inventory waste risk: Dosing adjustments or missed appointments may result in unused medication.

• Administrative burden: Managing claims, inventory, prior authorizations, and appeals requires asignificant back-office staff commitment.

According to a 2022 NICA survey, 91% of providers consider prior authorization processes to have a “highly negative” or “somewhat negative” effect on patient care.

Infusion Center Challenges in the Field

Independent infusion providers face unique operational and financial challenges under the buy-and-bill model:

1. Prior Authorization Hurdles
   High-cost specialty drugs often require complex, repeated prior authorizations. Providers work with multiple brands and payer policies that create a complex web of requirements and demands for robust data consistency.

2. Slow & Variable Reimbursement Timelines
   It may take weeks or even months to receive payment, creating cash flow pressure and risk for centers relying on drug inventory financing.

3. Formulary Restrictions & Benefit Variability
   Payers can shift coverage between medical and pharmacy benefits (i.e., “site-of-care” restrictions), impacting provider reimbursement.

4. Maintaining Margin Amid Policy ChangesRecent reforms like the Inflation Reduction Act could lower reimbursement margins by replacing ASP with Maximum Fair Price (MFP) for physician-administered drugs, potentially reducing profitability.

Understanding Net Cost Recovery in Buy and Bill

Net Cost Recovery (NCR) represents the difference between what a provider pays to acquire a drug and what they receive in reimbursement, including patient contributions and any eligible rebates. When executed properly, a positive NCR ensures the infusion service generates sufficient income to cover the costs of storage, administration, and operational risk.

The challenge is that reimbursement structures are based on the Average Sales Price (ASP) plus a narrow margin. This leaves little room for error or administrative inefficiency. If claims are denied, delayed, or underpaid, providers may fall short of breaking even.

Robust tracking of net drug costs helps infusion centers:

• Identify which drugs yield the best margin

• Quickly flag payer discrepancies and denials

• Optimize purchasing decisionsLength of Stay and Medicare Rates

As specialty drug costs rise, achieving net cost profitability has become essential for infusion center operators. Achieving this positive balance, however, requires expertise.

How to Optimize Buy and Bill Outcomes

To succeed under this model, independent infusion centers must invest in these key areas:

• Data-Driven Analytics & NCR Monitoring
  Use tools that track ASP trends, payer rates, denials, claim cycles, and rebate eligibility. Tracking NCR by payer and therapy line helps prioritize revenue-positive protocols.

• Intelligent Inventory Management
  Match supply levels to appointments to reduce waste. Monitor usage patterns to minimize spoilage and avoid unnecessary reorders.

• Prior Authorization Centralization
  Unify prior auth workflows across payers to capture data on approval times, first-time denials, and typical causes of rejection. This helps preempt denials and accelerate revenue.

Benefit Strategy OptimizationDevelop benefit-aware workflows: detect drugs shifting between pharmacy and medical benefit channels. Early alerts improve billing accuracy and timing.

Vista’s Capabilities for Independent Infusion Centers

VistaRx partners with infusion centers to streamline buy-and-bill operations and maximize NCR through:

• Dedicated Buy and Bill Solution: Integrates contract pricing, proven adjudication processes, and PBM benefit tracking to improve margins and streamlines claim submission. This supports data-driven decision-making during procurement and billing.

• Professional Advisory Services: VistaRx supplements tech workflows with specialized pharmacy expertise that helps partners in the pharmacy value chain unlock better outcomes. We help infusion center operators secure medical benefit rebates and beneficial manufacturer relationships.

Infusion Center Market Snapshot

• U.S. specialty drug spending reached $285 billion in 2021, with spending dominated by intravenous biologics often administered via infusion centers

• U.S. specialty drug spending is projected to represent almost 44% of total drug expenditures by 2030.

• Infusion volume growth across centers is expected to rise between 4%–21% over the next decade.

Final Takeaway

The buy and bill model enables independent infusion centers to control supply, enhance revenue, and improve patient delivery, but requires operational precision. A data-backed approach to net cost recovery, coupled with systems for prior authorization, inventory tracking, and rebate capture, is essential.

VistaRx’s technology and professional pharmacy integration give infusion centers the tools to thrive under buy and bill and the flexibility to adapt in a changing reimbursement environment.

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