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Drug Float Calculation for Buy and Bill Medication

Drug Float Calculation for Buy and Bill Medication

If your practice needs to purchase medications to administer in-office (such as infusions or injections), you would typically follow a buy-and-bill model of reimbursement and get the drugs directly delivered to your organization.

There are several benefits to using this standard, including opportunities for increased profitability, on-hand stock, and quicker therapy initiation. In this article, we will go through everything you need to know about Buy and Bill and how you can use inventory management systems to help with your drug float calculations.

What Is Buy and Bill?

Buy and Bill is a process used by physician offices to buy medications they can administer directly in the office. The mechanisms behind this choice are quite straightforward: The healthcare provider purchases a drug from a distributor and then stores it until it is used on a patient. Once this happens, the provider submits a reimbursement claim to collect from insurances and copayments. 

The name derives, then, from the action of the provider "buying" the medication and then "billing" the third-party payer.

The Buy and Bill system is popular with medical practices that need to store and administer specialty drugs and want to retain control over the medication's entire life cycle - instead of relying on a pharmacy (white bagging) or other collaborators or making the patient responsible for storing and transporting the drug (brown bagging). 

What are the Benefits of Buy and Bill?

There are many reasons why physician offices use Buy and Bill as a model to deal with prescription drugs. These include the following:

  • More control over the supply chain: Buy and Bill allows clinics to control the supply chain, helping maintain product integrity for all medications.
  • More control over prices: Buy and Bill also gives practices the opportunity to determine optimal prices for medications and equipment.
  • Better labeling: Because externally-delivered drugs lack the manufacturer's labeling, Buy and Bill supports more clarity when it comes to instructions and specifications. 

The Risk of Drug Spending and Drug Float

In some practices (such as those specializing in retina surgery and treatment), a significant amount of their activities involve the use of expensive injectable drugs, such as Aflibercept and Ranibizumab.

Although the use of these drugs creates revenue, they also involve a large expense because there can be a lot of time between the moment a drug is used and when it is expensed. This imbalance results in a drug float.

Due to the expense and volume of injectable drugs, a drug float can grow very large very quickly and has the potential to financially impact the practice significantly. Let's see an example.

A vial of drug A is used on an insured patient. The drug was ordered prior to the injection and had a cost of $1,900. The bill is submitted to the insurer for reimbursement of $2,000. Now, there are three possible scenarios with respect to the timing:

  1. If both the order and the reimbursement submittal happen at the same time, the account will have a resulting balance of $100 (no drug float).
  2. If the reimbursement occurs before the payment, the account balance will be $2,000 (positive drug float).
  3. If the payment needs to be made before the reimbursement, the account will have a negative balance of -$1,900 (negative drug float).

So, if your practice needs to deal with expensive drugs in the third scenario, your drug float can grow very fast. If we follow the example above, using ten drug vials a day for a month could result in an account balance of -$380,000!

The Buy and Bill System and Drug Float Calculations

If you want better control over your drug spending and supply and wish to increase your practice's revenue, you should consider tracking your Buy and Bill medications using inventory management software.

An inventory management system is designed to manage procurement, monitor inventory, and view patient history. It also allows you to track medications from doctor's orders to dispense, create treatment plans using a queue approach, and make weight-based calculations. Additionally, practices are able to:

  • Receive and assign purchase orders to specific patients.
  • Track medications by lot and serial numbers.
  • Reserve drugs and doses for certain patients.
  • View current dose inventory transactions.
  • Have access to patient diagnoses, last injection dates, and drug names for previous injections.
  • Duplicate previous patient treatments.
  • Print peel-and-stick labels.
  • Create barcodes for preference cards.
  • Create and dispense kits.
  • Calculate wastage. 

Using Pulse for Buy and Bill Drug Float

Pulse is a cloud-based medical inventory management system that allows you to easily monitor stock levels, track expiration dates, and streamline processes. For retina clinics, Pulse Retina can also help you manage the procurement, storage, and billing of your injectables.

Our solution features include:

  • Tracking: Track your medications and injectables by serial and lot number while keeping an eye on expiration dates. Set up notifications to be aware of which products are expiring and when.
  • Ordering: Order products by distributor, keep prices up to date, and reduce manual entry. Use the procurement module to input purchases and receive products into the system, and leave notes to inform employees of back orders and delays.
  • Reporting: Set up automated emails and receive reports on your inventory investment and transaction history, and use them to make better data-driven business decisions.
  • Auditing: Have a complete history of inventory movements and track medications by location, time, reason, and user. Ensure integrity with audits and explore transactions by day, week, or month.
  • Forecasting: Generate purchase predictions and ensure you're never under or over-stocked. Set up reordering levels, or let the system calculate it for you.

Pulse is designed to adapt to different practices and specialties. Contact us today and arrange a meeting with our team so you can create a solution that is perfectly tailored to your needs.

Maximize Buy&Bill Rx ROI: Partners with ElevateHT is the largest publicly available data source for office-administered drug pricing and coding information. 

The System offers up-to-date, accurate office-administered drug pricing and coding information along with an array of analytics tools to analyze this pricing information. Users can check ASP, WAC, and AWP information and use’s charge calculator to estimate reimbursement for drug claims. The tools on should allow users to easily approximate their potential drug float costs. 

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Why Work
With Us?

Working with ElevateHT means your clinical practice gains a trusted ally specialized in healthcare, uniquely dedicated to optimizing medical inventory and drug management. Our innovative solution, Pulse, transforms inventory and in-office drug dispensing into actionable insights, making management effortless and decision-making precise. By streamlining these crucial processes, we free up your valuable time and resources, allowing you to focus on what truly matters—delivering exceptional patient care.