White bagging is a process for providers to receive medication from a specialty pharmacy directly. This is in lieu of buy and bill or brown bagging practices.

Previously, we discuss Buy and Bill and brown bagging in a physician practice. In the blog we go over what the benefits and challenges of Buy and Bill and brown bagging are.

What is White Bagging?

“White bagging” refers to the distribution of patient‐specific medication from a pharmacy to the physician’s office, hospital, or clinic for administration.

This practice is often in oncology practices to obtain costly injectable or infusible medications. Specialty pharmacists distribute these medications and the products may not be available in all non‐specialty pharmacies.

The distinguishing factor of this practice is that the medication is delivered directly by the pharmacy to the provider’s office.

There is no middleman – the patient is not bringing the medication from one facility to the other. The chain of command is secure and maintains quality control.

In terms of payment, the medication is generally paid under the pharmacy benefit rather than the medical benefit. The specialty pharmacy adjudicates the claim and collects any copayment or coinsurance from the patient before treatment.

Because specialty and biologic agents drive up the overall cost of prescription drugs, payers may incentivize alternative distribution methods for these drugs, such as white bagging.

Benefits of White bagging

This model reduces physicians’ costs associated with purchasing and stocking expensive medications and limits the lengthy administrative process of billing payers for reimbursements. Since the provider neither purchases the drug nor seeks drug reimbursement from a third‐party payer, there is lower provider risk.

However, the provider is still paid for professional services, including the drug’s administration. From the payer perspective, benefits include cost savings through negotiated dispensing rates and increased transparency.

White bagging may be cost effective if payers are able to negotiate more favorable dispensing rates with specialty pharmacies than through the buy and bill process.

The provider neither purchases the drug nor seeks drug reimbursement from a third-party payer, which relieves some time for clinical responsibilities.

Challenges

One concern stems from the nature of the medications provided through white bagging. These medications are often patient‐specific and require special handling. This can pose safety, operational, and unexpected financial burdens.

Patients participating in white bagging often require therapy modification. Change of dosage or strength or transition to a different class of medications is common. When therapy modification occurs, it often leads to excessive waste. Because the previously dispensed medication cannot be reused for a different patient.

Specialty pharmacies do not always have access to the patient’s electronic medical record. This makes the reimbursement process more difficult. Specialty products often have prior authorization requirements. Not having access to medical records would hinder the ability to gain payer approval quickly and efficiently. Therefore, this requires additional coordination between the patients and their physicians.

Furthermore, under the white bagging model, physicians and dispensing pharmacies face the unpaid expense of safeguarding and storing patients’ medication until drug administration.

Under a white bagging model, inventory control costs will go up and practices will still bear the costs of intake. This includes storage, equipment, staff, facilities, spoilage insurance, and other overhead without compensation.