Navigating buy-and-bill: What every practice should monitor and how data analytics can help

In the buy-and-bill model, physicians are responsible for the upfront costs of purchasing products for in-office administration. Practices then bill payers for both the products and their administration, which alleviates the burden on patients to manage their own therapies—but ensuring cost recovery remains a critical concern. 

The importance of data in buy-and-bill 

The provider solutions team at AmerisourceBergen provides business coaching and analytics to assist practices in monitoring their business operations and revenue cycle processes. Practices must receive enough reimbursement on administered drugs to cover the acquisition cost.  Failure to do so can impact the financial stability of the practice, especially in an oncology practice where reimbursement for buy-and-bill products represents 85 percent of the annual revenue. The InfoDive® business intelligence tool provides easy-to-use reports to monitor billing and collection processes associated with buy-and-bill services.

 

Assessing net cost recovery

The most important financial measurement for buy-and-bill services is the net cost recovery.  This compares the cost of the drug to the total amount paid, including payer payments, patient assistance, and patient responsibility. InfoDive calculates this by summarizing all payments posted in the practice’s billing system to the amount paid for the drug. When the amount paid is below the cost, it is referred to as “underwater.” However, some drugs are eligible for rebates which can prevent a drug from going underwater. Because of this, InfoDive reports both the net cost recovery with and without rebates.  

Changes in drug pricing 

Medicare uses the average sales pricing (ASP) to determine payment rates for each drug.  These schedules are updated quarterly and posted typically three to four weeks before the quarter changes. Our staff monitors the release of the ASP file and within a day, we publish reports for each practice to show the impact on reimbursement for the next quarter, specific to the drugs they administer. For many drugs, our reports show a steady decline quarter over quarter.

Paying for drugs using ASP is common among commercial payers as well. However, they often lag a month to six weeks behind in updating their claims processing systems. A decrease in ASP is favorable for claims billed to commercial plans, but the opposite is true when ASP rises. It is a balance that practices need to monitor, and we provide the analytics to help them.

 

Advances in biosimilar use 

One of the driving forces in reduction to the ASP has been the onset of biosimilars. Biosimilars have entered the market at lower costs than the innovator drug and have brought lower cost treatment options to patients for select therapies. As an example, HERCEPTIN® had one biosimilar available in first quarter of 2020 and we saw an adoption rate of 50 percent for the biosimilar. By first quarter of 2022, the use of biosimilars increased to over 90 percent with five biosimilars available. 

Waste billing and potential revenue gaps  

Practices use AmerisourceBergen’s Nucleus® inventory management system to manage their inventory and track dispenses of drugs. We built a feature into InfoDive called GapFinder, which compares the dispense records from the Nucleus cabinets with claims data from the practice’s billing system. GapFinder reports if the two systems don’t match, alerting the practice to any discrepancies so they can research and either correct the inventory system or the claim filed to the payer.

One example of the GapFinder reports is the single dose vial report. For drugs that are manufactured in vials that cannot be used for more than one patient, a practice can bill for the full vial but must bill administered and wasted units on separate claim lines. If the waste does not get billed, it is very likely the practice will not receive enough money to cover the cost of the vial. The good news is, it takes just a click of a button to see a list of drugs where the waste was not billed. Practices use these reports to file additional claims for the waste billing. On average, we see about $35,000 in missed waste billing per practice, but over time the practice will fix operational processes that lessen the number of claims filed with missed waste.  

 

Drugs paid below cost

Our business coaches work alongside the InfoDive product development team to find new ways to deliver actionable insights. Two new reports were built to provide auditing of drug claims.  

The first is a report that shows claims where the drugs were paid less than the cost. This allows practices to uncover opportunities for:

• Refiling claims adjudicated incorrectly by the payer
• Patient assistance programs
• Revenue cycle process improvements
• Payer rate renegotiations

The second report focuses on claims with outstanding balances and how much is needed to collect to cover the drug cost.  The longer the claim stays open and waiting for payments to come in, the harder it is to collect. This allows practices to focus on high dollar claims in older aging buckets within their accounts receivable.  

Navigating the buy-and-bill landscape

There are many aspects to the success of offering buy-and-bill services. Ensuring patients get the treatments they need is our top priority. Robust analytics available within InfoDive and the ongoing support from our business coaches help our practices stay on track with their buy-and-bill services and maintain their margin. We’re all here to help your practice not only survive, but to thrive in the eve rchanging healthcare marketplace.