# Medical Device Billing

## What is a bill-only PO?
In medical device distribution, a bill-only purchase order is how hospitals pay for products that were already on-site when they were used in surgery. No shipment. No receiving dock. Just billing — and it's where most of the complexity lives.

## The short version
Medical device companies place inventory at hospitals and surgery centers _before_ procedures happen — as consignment stock or in a rep's trunk. When a surgeon uses a device, the hospital owes the distributor for what was consumed. The bill-only PO is the mechanism that triggers that payment.

It's called "bill-only" because the distributor is billing for product that has already been delivered and consumed. There's no corresponding shipment to match against — just a case record from the field and a purchase order from the facility.

This model is standard across orthopedics, spine, trauma, cardiovascular, and most implantable device categories. For many distributors, bill-only orders represent 60-80% of total revenue.

## How a bill-only order works
From surgery to collected payment, here's the lifecycle of a typical bill-only transaction.

### Surgery happens
A medical device is implanted or used during a surgical procedure at a hospital or ambulatory surgery center.

### Rep records usage
The field rep documents which devices were used — product codes, lot numbers, quantities — typically via text, email, or a case form.

### Hospital issues a bill-only PO
The facility generates a purchase order specifically for the devices consumed in that case. No physical shipment is required — the product is already on-site.

### Distributor matches and invoices
The distributor matches the PO to case utilization, validates pricing against the facility contract, and generates an invoice.

### Payment and reconciliation
The facility pays the invoice. The distributor reconciles payment, updates inventory levels, and triggers replenishment for consumed stock.

## Bill-only vs. stocking orders
Medical device distributors process two fundamentally different order types — and they require different workflows.

|  | Bill-Only | Stocking |
| --- | --- | --- |
| Trigger | A completed surgical case | Inventory below par level |
| Product location | Already at the facility (consignment or trunk stock) | Shipped from warehouse to facility |
| Physical shipment | None — product was consumed on-site | Yes — product is physically delivered |
| PO timing | After surgery, sometimes days or weeks later | Before or concurrent with delivery |
| Matching requirement | Must match PO to case utilization record | Must match PO to shipping/receiving record |
| Revenue complexity | High — contract pricing, GPO tiers, facility-specific rates | Moderate — typically standard catalog or contract pricing |

## Why bill-only processing is so painful
Bill-only is where medical device revenue goes to wait. Here's what teams deal with every day.

### 30-60 day billing lag
When POs arrive by email or fax and sit in a queue, revenue recognition can lag surgery by weeks. Cash tied up in unbilled cases compounds across hundreds of orders per month.

### 8-12% credit and rebill rate
Manual pricing lookups against complex contract matrices lead to invoicing errors. Each credit-rebill cycle costs $50-150 in admin time and damages facility relationships.

### Billing team bottleneck
Most billing teams spend 80% of their time on routine data entry — typing PO line items into the ERP, cross-referencing case records, hunting down missing information from reps.

### Audit and compliance risk
Without a clear trail from surgery to invoice, companies struggle to document pricing accuracy, contract compliance, and inventory chain-of-custody during audits.

## What modern bill-only processing looks like
The traditional bill-only workflow — printing POs, manually keying line items, cross-referencing contracts in spreadsheets — was designed for a world with fewer SKUs, simpler contracts, and smaller case volumes. That world no longer exists.

Modern bill-only automation detects incoming POs from any channel, extracts line item data, matches it to the rep's case record, validates pricing against the correct contract tier, and generates an invoice — all without a human touching the routine orders. Your billing team only sees the exceptions that actually need judgment.

The result: same-day invoicing instead of a 30-60 day lag. Credit-rebill rates under 2% instead of 8-12%. And a billing team that spends time on collections and exceptions instead of data entry.

## Deviceflow automates bill-only from case to cash
PO detection, data extraction, usage matching, contract pricing validation, and same-day invoicing — running automatically for every case.