Decision Guide
Between the Invoice and the Payment, You’re the Bank
Buy-and-bill margin math usually stops at reimbursement minus acquisition. But the acquisition leaves your account weeks before the reimbursement arrives — and financing that gap comes out of an add-on that’s only ~4.3% to begin with. Here’s the float math, on a real drug.
The float, on Ocrevus
| Maintenance dose (600 mg = 600 units of J2350) | allowable $36,582 |
| Acquisition benchmark (implied ASP) | $34,511 |
| Gross Medicare add-on per dose (net of sequester) | $1,485 |
| Carrying cost — 40-day float at 8% cost of capital | −$303 |
| Share of the add-on consumed by the float | ≈ 20% |
Stretch the float to 60 days — a slow commercial payer plus shelf time — and the share grows proportionally. The add-on doesn’t.
FAQ
What is carrying cost on a buy-and-bill drug?
The financing cost of the gap between paying for the drug and getting paid for it: wholesaler terms come due, the drug may sit in inventory before administration, the claim takes days to file, and Medicare pays electronic claims no earlier than 14 days — commercial payers often 30 to 60. Across that whole window, the acquisition dollars are yours, not the payer's, and they cost you whatever your money costs you.
How do I compute it for my practice?
Acquisition cost × your cost of capital × (float days ÷ 365), per dose. Float days = days from wholesaler payment to payer payment, including inventory shelf time. If you run on a line of credit, use its rate; if on cash, use what the cash would otherwise earn. The result is a per-dose number you can put next to the add-on.
Why does a few-percent financing cost matter?
Because the margin it comes out of is also a few percent. The effective Medicare add-on is roughly 4.3% of ASP; a 40-day float at 8% costs about 0.9% of ASP — a fifth of the entire add-on, before waste, denials, or uncollected coinsurance take their share. On thin or underwater lines, the float is sometimes the difference between positive and negative.
What shortens the float?
Just-in-time ordering against the schedule (shelf days are the most controllable component), clean-claim discipline (every rejected claim restarts the clock), wholesaler terms that match your payer mix, and coinsurance collected at the time of service rather than chased afterward. White-bagging eliminates the float entirely — along with the margin; that trade has its own calculator.
The other quiet leaks: unbilled waste, denials, and the sequester itself. The white-bag trade-off: the loss calculator.
Drug economics as of Q3 2026 (Medicare ASP basis)
Your real float is in your 835s.
The practice X-Ray measures your actual payment lags payer by payer — and weighs them against the margin each drug really earns at your rates.