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Healthcare arbitrage #2: White bagging


Like most healthcare, medication is often much more expensive when members get it at a hospital. White bagging is a strategy for circumventing large hospital claims while still getting members the drugs they need.

White bagging occurs when a health plan sources an injectable drug from outside the hospital and ships it to the facility to be administered, rather than buying the drug from the hospital. This process is typically initiated when a precertification or claim for an expensive drug injection comes through, and the plan recognizes it as an opportunity for potential savings.

Disruption: low

Frequency: low-medium (depending on the number of members receiving relevant drugs)

Impact to quality: negligible

Impact to cost: high

The white bagging operating playbook

  1. Monitor precertifications and claims for specialty and high-cost drugs. Be prepared to respond when opportunities for savings are identified.
  2. Find trusted sources for specialty and high-cost drugs, so you’re prepared when an opportunity for white bagging arises.
  3. Engage with members. Even though white bagging doesn’t require any change in member behavior, make sure the member understands what’s happening with his or her healthcare.
  4. Facilitate the paperwork and logistical arrangements, and make sure the provider(s) are on board. The patient should be able to receive their care with no disruptions.

What can go wrong

  • Lack of hospital cooperation: In order for white bagging to work, the hospital must be willing to coordinate with the plan. Have a back-up plan in place, so that if the hospital isn’t willing to cooperate, the member’s care isn’t disrupted.

The role your TPA should play

  • Monitor claims and precertifications: Identify opportunities for savings, and respond in a timely fashion.
  • Coordinate the relevant stakeholders: Make sure the plan, PBM, hospital, and the member’s doctor(s) are all on the same page and the drugs are sourced and delivered on time.