Under buy-and-bill the practice purchases the drug, bills a J-code with units, and is reimbursed at a rate benchmarked to average sales price. Margin depends on acquisition cost, accurate unit reporting, billed waste and authorization — and each of those leaks independently.
Infusion is one of the few areas where a billing error costs the practice the full acquisition price of the drug rather than a professional fee. That changes the stakes on everything.
The buy-and-bill structure
The practice purchases the drug, holds it as inventory, administers it, then bills. Reimbursement is benchmarked to average sales price plus a percentage, and the practice’s margin is the gap between what it paid and what it collects.
Every step between purchase and payment is a place that margin can vanish.
Units are the first leak
Each J-code defines its own unit of measure, and it rarely corresponds to a vial or to a patient dose. Reporting one unit for one vial, when the code is defined per milligram, understates the claim by a factor nobody notices.
Because it is systematic, one misread unit definition costs on every claim for that drug until someone audits.
Waste is billable and frequently unbilled
Where a single-use vial is opened and part is discarded, the discarded amount can generally be billed with the appropriate modifier and documented waste quantity.
Practices that do not have a waste documentation step simply absorb it. Over a year of expensive biologics that is a substantial number.
Authorization is existential here
An unauthorized infusion is not a denied professional fee. It is a denied claim for a drug the practice already bought and administered.
That is why infusion authorization deserves a dedicated workflow with verification before the drug is drawn, not before the appointment.
Administration codes sit alongside
Infusion, injection and hydration services have hierarchy rules — one initial service per encounter, with sequential and concurrent services coded accordingly. Getting the hierarchy wrong understates the encounter.
Time documentation matters, because several of these codes are time-based and the note has to support the duration billed.
Payer drug policies steer sites of care
Many payers now direct infusions to home or hospital outpatient settings, or require the drug be obtained through a specialty pharmacy rather than bought by the practice.
That changes the economics entirely, and it changes by contract. Knowing which of your payers permit buy-and-bill is a prerequisite to planning around it.
Inventory is part of billing here
Drug purchased, drug administered and drug billed should reconcile. A gap means waste that was not billed, a dose that was not charged, or shrinkage.
Reconciling monthly is unusual in oncology practices and it is where the recoverable money sits.
Common questions
- What is buy-and-bill?
- The practice purchases the drug, administers it, and bills the payer — carrying acquisition cost, inventory risk and the gap until reimbursement.
- How are J-code units calculated?
- By the code’s defined unit of measure, not by vial or by dose. Misreading the unit description is one of the most expensive recurring errors in infusion billing.
- Can I bill for discarded drug?
- Frequently yes, with the appropriate modifier and documentation of the waste amount. Unbilled waste on single-use vials is a common and avoidable loss.
- What does the administration coding add?
- Infusion, injection and hydration codes are billed alongside the drug, with hierarchy rules about which service is initial and which is sequential or concurrent.
- Why do infusion claims deny?
- Missing authorization, unit errors, a drug not on the payer’s preferred list, and site-of-care policies steering to home or hospital settings.
Denials Piling Up?
We handle the revenue cycle end to end — coding by certified coders, claim submission, denial management and appeals, and A/R follow-up, with six reported numbers every month.