Buy-and-Bill Margin Calculator
See what one infusion drug administration really earns after waste, patient balances and collections.
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Expected margin $266 per administration, 6%. One unpaid claim takes 16 administrations to recover.
Expected margin per administration
$266
6% of expected revenue
- Drug paid
- $4,240
- Waste paid
- $212
- Administration fee
- $200
- Total allowed
- $4,652
- Patient balance not collected
- -$186
- Expected revenue
- $4,466
- Drug cost, 42 units
- -$4,200
- Paid visits to earn back one unpaid claim
- 16 administrations
An estimate, not billing advice. Payer rules, contracts, and coding decide what is actually paid. Free, and nothing you enter is sent anywhere.
How to use it
- Enter the acquisition cost per billing unit, the units administered, and any waste units for one drug.
- Enter this payer's reimbursement per unit, the share of waste it pays, the administration fee, the patient's share, and your collection rate.
- Read the expected margin per administration and how many paid visits it takes to earn back one unpaid claim.
How the numbers work
- Drug cost = (units administered + waste units) × acquisition cost per unit
- Total allowed = units administered × reimbursement per unit + waste units × reimbursement per unit × share of waste paid + administration fee
- Payer pays = total allowed × (1 − patient responsibility)
- Patient collected = total allowed × patient responsibility × collection rate
- Expected margin = payer pays + patient collected − drug cost
- Margin % = expected margin ÷ expected revenue
- Replacement risk = drug cost ÷ expected margin, rounded up: the paid administrations it takes to cover the drug on one claim that is never paid
With the example values: 42 units × $100 = $4,200 of drug. The payer allows 42 × $106 + $200 = $4,652. The patient owes 20%, $930.40, and 80% of that is collected, so expected revenue is $4,465.92 and the margin is $265.92, about 6%. One unpaid claim takes $4,200 ÷ $265.92 = 15.8, so 16 paid administrations, to earn back. The example is not a real drug's price.
Before you trust the result
- Waste billing depends on the payer. Medicare Part B requires the JW modifier on discarded amounts from single-dose containers and the JZ modifier when nothing was discarded. Commercial and Medicaid plans set their own rules, and some do not pay for waste. See the CMS page on discarded drugs and the JW and JZ modifiers.
- Use this payer's allowed amount. ASP-based rates change every quarter, and commercial contracts may pay a different percentage or a fee schedule.
- Count the full acquisition cost. Include shipping, specialty distributor fees, and carrying cost if they are material, and leave out rebates you cannot count on.
- Denials are the bigger risk. A thin margin per visit means a single denied or never-authorized claim wipes out many paid ones. Check authorization before the drug is mixed.
Questions
What is buy and bill?
Buy and bill means the infusion center buys the drug, stocks it, gives it to the patient, and then bills the payer for both the drug and the administration. The center carries the cost of the drug until the claim is paid.
How do you calculate margin on a buy-and-bill drug?
Add what the payer pays to the share of the patient's balance you expect to collect, then subtract the drug cost, including units discarded. This calculator also shows that margin as a share of expected revenue.
What is ASP plus 6%?
For most separately paid Part B drugs, Medicare's payment limit is the drug's average sales price (ASP) plus a 6% add-on. CMS updates ASP every quarter, and commercial contracts may pay a different percentage or a fee schedule, so use the allowed amount for the payer you are checking.
Does Medicare pay for drug waste?
Medicare Part B requires the JW modifier on discarded amounts from single-dose containers and the JZ modifier when nothing was discarded. Commercial and Medicaid plans set their own rules, and some do not pay for waste. Check the CMS discarded drugs page and each payer's policy.
Why does one denied claim matter so much?
When the margin on each administration is thin, one claim that is never paid costs the full drug. The calculator divides the drug cost by the expected margin to show how many paid visits it takes to make that back.
Where the definitions come from
Drug margin per infusion, waste units billed, and initial denial rate are defined in the infusion center KPI glossary. The WeInfuse reporting guide covers where drug units and payments live.
Related tools
Want this from your own data?
Your orders, inventory, and remittances already hold cost, units, waste, and payment for every administration. We build the margin report by drug and payer so you see which ones lose money.