Financial models for infusion centers and buy-and-bill practices
Margin by J-code and payer against what the drug really cost after GPO tier and rebate, wastage carried on the case, chair-hour capacity, and the working capital tied up in vials bought long before they were billed. Built to order, checked before it ships.
How the money moves
You buy the drug with your own cash, infuse it, and bill for it afterwards — so whether a case made money was decided weeks before anyone could see it. Reimbursement is set per J-code per payer, on ASP for Medicare and on a contracted rate for everyone else, while acquisition cost moves with your GPO tier, prompt-pay terms and rebates. The identical vial can earn under one contract and lose under another, and no line on the P&L says which. Around that sit two constraints a general model never sees: chairs and nursing hours are fixed capacity that one long infusion can occupy for a day, and every dollar of growth is spent on inventory well before it is collected — so the better the year, the tighter the cash.
What we build for infusion centers and buy-and-bill practices
The workbooks this business runs on
- 01
Margin by drug and payer
Every J-code against every contract: acquisition cost net of GPO tier, prompt pay and rebate, the allowed amount that payer actually pays, administration codes on top, and wastage on the case. The one report that names which drugs lose money, and with whom.
- 02
Chair capacity and utilization model
Chair-hours available against chair-hours used, by drug and by infusion length, with nursing hours alongside — so a schedule full of long infusions stops reading as a light day.
- 03
13-week cash flow
Drug purchases on wholesaler and manufacturer terms, receipts on a collection curve per payer, and the gap between the two that every growing infusion business funds out of its own balance.
- 04
Drug inventory and working capital model
Units on hand by NDC against the cash they represent, days on hand, short-dated and expiry exposure, and the borrowing base if a line is secured against any of it.
- 05
Site and service-line contribution
Contribution per suite after nursing, pharmacy, drug and replacement write-offs — rather than a blended margin that lets the spread on one drug carry the whole site.
Every one of these is a request on your board, not a project with a scope document. All of them are on the one subscription — there is no build type you have to move up a plan to reach.
Where these models usually go wrong, and what we do instead
Four mistakes a model makes when the builder has never seen this business
- 01
One blended margin percentage across the drug book, when the spread on a single J-code can be positive under one contract and negative under another for the identical vial
What we do instead. We build margin by J-code by payer, which produces the short list of drug-and-contract combinations that lose money every time they are pushed.
- 02
Drug cost taken from the invoice price rather than net of GPO tier, prompt pay and rebate, which is the number the margin actually turns on
What we do instead. We land acquisition cost net of the tier, discount and rebate you actually receive, so the spread in the model is the spread that reaches the bank.
- 03
Wastage left out entirely, when the discarded portion of a single-use vial is either billed on the JW modifier or absorbed
What we do instead. We carry wastage on the drug, split between what is billed and what is absorbed, so vial-size and scheduling decisions can be made on the numbers.
- 04
Denials and prior-authorization failures treated as a collection rate, when the drug was already bought and already infused
What we do instead. We model an authorization failure as a write-off at full acquisition cost rather than a haircut on revenue, because that is what it costs — spent money, not slow money.
When people call us
Usually one of these has just happened
- Adding a drug to the formulary, or a manufacturer moving its price
- A payer contract up for renewal, or a new one on the table
- A biosimilar arriving and the reference product's spread collapsing
- White-bagging or brown-bagging pressure from a payer
- Opening chairs, adding a suite, or moving to a larger site
- A bank line or borrowing base secured against drug inventory and receivables
Want this built for your numbers?
Every workbook is recalculated with a formula engine, its checks are proved able to fail, and a second pass re-derives the headline numbers before it ships.
Not ready? Get a free teardown of a sheet you already rely on.