Ask an Expert: Valerie Russo Explains White, Brown and Clear Bagging

How white, brown and clear bagging impact health systems and patients.

By: McKesson Health Systems Editorial Team

Read time: 4 minutes

We recently sat down with Valerie Russo, managing consultant, advisory services, to discuss white, brown and clear bagging in relation to health systems and patients. In the Q&A below, she shares insight on how each practice works and their overall impact on the healthcare system.

Q: There’s been a great deal of recent coverage around white bagging, brown bagging and clear bagging in conjunction with health systems and site of care. What are the various challenges for health systems within each of these?

A: The biggest challenges for health systems are financial and operational, but to understand how, we have to examine each of these separately.

Brown bagging leaves the biggest gap and questions around supply chain integrity, because patients must properly store and bring the medication to the site of care themselves to be administered.

White bagging allows more control, but it creates challenges with inventory. There are storage implications for the specialty pharmacy or health system owned pharmacy, as it must store the medication separately. There is also the potential for treatment delays and more possibilities for waste and disposal with white bagging.

Finally, clear bagging is where for health system specialty pharmacies have some control. They must be in network with the payer first, which entails meeting many requirements in order to be couriers to the infusion center. While it provides more visibility, it’s not ideal. But it enables the health system to navigate and operationalize, which helps to maintain the continuity of care.

Q: What makes white, brown, and clear bagging different from the traditional “buy and bill”?

A: The shift from medical to pharmacy benefit is where it’s complicated. A traditional buy and bill is when the healthcare provider purchases, stores and then administers the product to a patient. With white, brown and clear bagging, the pharmacy charges the patient for their medication prior to handoff or courier to infusion center for preparation. They usually pay a co-pay upfront before the medication can be administered. Then, through one of the bagging methods, the patient gets to the point of administration under the care of their provider. The provider bills for administrative fees, takes liability and is accountable for the costs of care. Overall, the health system remains at risk to deliver quality patient care and desirable patient outcomes at the lowest cost to health plans in value-based care arrangements. However, the provider does not control the product in the journey from a supply chain integrity standpoint.

In contrast, when health systems have control over the procurement of medication and drugs, hospitals can better manage medication and supply chain integrity. This helps them to ensure patient safety and prevent treatment delays, and the health system can save costs and prevent waste and disposal.

Q: How can brown and white bagging benefit payers?

A: This really goes hand in hand with value-based care. Once the payer has dictated the shift, the health plan or payer determines where the infusion is being administered and the cost of the site is lowered. In large part, community practice is lower cost but more expensive overall in an outpatient facility. Payers pay for those sites of care and vertically integrate, meaning the health plan owns pharmacy benefits, the specialty pharmacy and their own home infusion service. Because all of these entities are wholly owned, the payer saves.

Q: Since health systems have little to no control over whether or not white or brown bagging occurs, what can they do to support patients across the continuum of care?

A: Clear bagging. Health systems can participate in payer networks with an end goal of servicing their own patients locally or regionally. To circumvent white bagging by payer-imposed specialty pharmacies (often pharmacy benefit manager owned), health system specialty pharmacies (HSSPs) look to gain access to narrow networks (often commercial) by adopting accreditation standards, driving patient satisfaction and regimen compliance.

Beyond clear bagging, advocacy from the provider group or health system to Centers for Medicare & Medicaid Services (CMS) and other regulatory policy groups could help.

While white, brown and clear bagging may appear at the surface to lower the cost of care, ultimately, they could negatively impact patients in other ways. Pharmacy benefits, compared to medical benefits, are often more costly for Medicare beneficiaries, i.e., suffer much higher prescription copays through Medicare Prescription Drug Plans (Part D) compared to out-of-pocket costs associated with provider-administered products billed under the beneficiaries’ medical benefits. While some payers pass along co-pay discounts to steer patients to lower cost pharmacy outlets, the disruption and patient accountability is burdensome and can trump the perceived cost savings.

Contact us to learn how McKesson can partner with your health system.

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