Bill-only purchase orders, explained: the workflow from surgery to paid invoice

Most purchasing runs in a fixed order: a requisition is approved, a PO goes out, the product arrives, and the invoice is matched and paid. Bill-only runs the other way. The implant is used in surgery first and the PO is written afterwards, so the three things a PO normally settles in advance (which item, what price, how many) get settled after the patient has left the room.

A 2022 GHX provider survey, reported in the GHX automation guide for these orders, found that implant and consignment orders accounted for roughly 10% of all POs.

What bill-only means, and what it is not

The term gets used loosely. The GHX guide, written by a work group of providers and suppliers, treats bill-only as one of four subtypes of the consignment implant order.

Subtype	What happened	What the PO tells the supplier
Bill-only	A rep carried product in for the case (also called trunk stock)	Bill for what was used. Nothing to restock
Bill-and-replace	Supplier-owned consigned stock on your shelf was used	Bill and replenish
Waste-only	An item was opened but not implanted	Record it. Replacement depends on the agreement
Replenish-only	Consigned stock is being set up or topped up	Deliver at no charge

Stocked inventory is different again: the hospital bought it on a standard PO and received it before anyone opened a package.

As the GHX explainer on bill-only puts it, the product is selected just before or during the procedure, so a PO cannot be issued ahead of time.

The seven steps from case to payment

GHX describes the manual process in seven steps. The table adds the document each step creates.

Step	What happens	Document created
1	The rep delivers a range of product ahead of the case	Often nothing on the hospital side
2	The surgeon selects what the patient needs	The implant record starts in the EMR
3	The circulating nurse and the rep each record what was used	EMR implant log, and the rep’s usage sheet or sales order
4	The hospital creates a PO from the nurse’s information	Requisition, then a bill-only PO
5	The supplier creates an invoice from the rep’s information	Invoice
6	AP compares invoice to PO and resolves discrepancies	Match exceptions, emails, credit and rebill requests
7	The hospital pays	Payment

Read steps 3 to 5 again. The PO descends from one record and the invoice from another, and nothing compares the two until step 6.

Who owns each step

Activity	Responsible	Accountable	Consulted or informed
Clinical usage record	Circulating nurse	Perioperative director	Rep, when the records disagree
Bill-only request for the case	Supplier rep	OR business office	Circulating nurse
Item, quantity and price validation	OR business office	Supply chain lead	Contracting, for non-contract items
PO creation and transmission	Purchasing	Purchasing manager	OR business office, supplier billing
Invoice match and exceptions	AP	AP manager	Purchasing, OR business office
Late and missing requests	OR business office	Perioperative director	Supplier sales management

Two rules matter most. The rep supplies the request, but the hospital’s own case record is the reference for what was used. And validation happens before purchasing assigns a PO number, not at the AP desk. A PO issued at the wrong price turns a quick correction into a match exception or a credit and rebill.

Where it breaks

Two records of one surgery. The GHX explainer describes the nurse and the rep each writing down the items after the case. The mismatches surface when AP compares invoice to PO and get resolved by phone and email.

Paper and PDF usage sheets. A handwritten sheet or emailed PDF has to be rekeyed, and every rekeying can transpose a catalog number or drop a lot number.

Rep-entered prices. The price on the sheet comes from the supplier’s side. It may be list, an expired tier, or another facility’s price. A 2020 product announcement carried by Healthcare Purchasing News described the manual check hospitals run on each invoice: that the item was used, that it was contracted, and that the invoice showed the correct price.

Items the hospital has no price for. In an HFMA roundtable published in January 2024, a revenue integrity leader described doing a surgery and then finding no price on file because the item was the next version of the same product. “Then contracting has to go back and get a price for the item.” The team cannot keep holding cases while that happens, so the patient charge goes out at the old item’s price.

Late submissions. The Journal of Healthcare Contracting reported on a health system whose earlier contract language did nothing to stop a supplier billing six months after a case. The same system tracked the share of its purchase order spend that did not appear in the EHR: 8% at its 2021 baseline and 0.25% by the December 2023 report, after it moved bill-only onto a digital platform and reset expectations with suppliers. That is one organization’s published result, not a benchmark, but it shows the gap can be measured. Lateness hurts the supplier too: an invoice that reaches AP before the PO exists waits there while the receivable ages.

None of this requires bad faith. These are the errors to expect from a process with two record keepers and no shared form.

Controls to build into the request

The fix is one structured request per case and supplier, which becomes the single source for the PO.

A submission deadline. The GHX work group recommends that the rep’s case sheet reach the provider the same day if possible, with a limit of 24 hours in the guide’s summary and two business days in its detailed table. It asks providers to send a bill-only PO within five business days of the case. A 24- to 48-hour submission window fits inside that. Write it into supplier agreements and rep access policy, and decide in advance what happens to a late request.

Mandatory fields. Case identifier, surgeon, procedure date, the supplier’s sales order number, catalog number, lot or serial number, quantity, unit price and contract reference. The GHX guide recommends that each bill-only PO line carry a quantity of one and a single lot or serial number, which makes duplicates easy to spot.

Two validations. Check each line against the hospital’s case record (was this item, in this quantity, documented for this case) and against the contract price file. Non-contract lines go to contracting with a named owner and a due date.

Approval thresholds and duplicates. For example, a fully matched request gets one approval, while a non-contract line, a price variance above tolerance or a total above a set amount gets a second reviewer. Flag any lot or serial number that appears on two requests, and quantities across requests that exceed the case record.

Minimum patient data on the PO. The request holds the case details; the PO does not need them. The GHX guide recommends sending the supplier’s sales order ID (or a case ID) plus the lot or serial number, and leaving other case elements off, since each side already holds them in its own system.

Going digital

A structured digital request replaces the usage sheet, the sticker page, the emailed PDF and the rekeying. The rep enters each line once, picked from the hospital’s contract catalog, so the price is the agreed price. Software can then run the checks above before a PO number exists.

Clean requests also make electronic POs practical. The GHX guide recommends EDI for all consignment implant order types, a separate PO for each subtype, and supplier invoice lines in the same sequence as the PO lines so invoices can match without manual handling.

Ask suppliers and reps for four changes: submit through the hospital’s request rather than their own form, give a sales order number and a lot or serial number on every line, accept the PO electronically, and invoice in PO line order. The GHX explainer advises cleaning contract and price data first and starting with one supplier. Pick a high-volume one whose prices you trust.

Period-end: implants used but not yet billed

An implant used on the 29th is generally an expense of that month, even if the request arrives on the 3rd and the invoice on the 15th. Until there is a PO and a receipt, the ERP has no record of the liability. At period end, every completed case not yet on a PO is expense your books do not show.

The surgical schedule gives you the estimate. An illustrative month-end:

Service line	Completed cases not yet on a PO	Trailing average implant spend per case	Accrual
Orthopedics	40	$6,000	$240,000
Spine	20	$15,000	$300,000
Total	60		$540,000

Agree the method with your controller, reverse the entry as the actual POs post, and track estimate against actual. The cheaper fix is upstream: with a 48-hour submission window, most of the cases left to estimate come from the last few days of the month.

Metrics that show whether it is working

Metric	How to measure it	What it tells you
Days from surgery to PO	PO date minus procedure date, median and 90th percentile	Whether the window holds
Requests inside the window	Share received on time, by supplier	Rep compliance
First-pass price match	Lines at contract price on first submission	Price file quality
Invoice exceptions per 100 cases	AP match exceptions on bill-only invoices	Whether upstream checks work
Aged open items	Cases with no request, requests with no PO	The unrecorded liability

Before changing anything, take the baseline the GHX guide suggests: these orders as a share of annual PO count, discrepancies by type (part number, unit of measure, price, invoice line sequence), and cycle time from PO to invoice and payment.

A one-afternoon test

Pull 25 completed implant cases from last month, across at least three suppliers. For each, collect the EMR implant record, the rep’s usage sheet, the PO and the invoice, then record:

• five dates: surgery, sheet received, PO issued, invoice received, invoice paid
• whether PO items and quantities match the EMR record
• whether each PO price matches the contract price on the date of surgery
• whether the invoice matched the PO without anyone stepping in

The failures tell you which control to build first. Long gaps between surgery and sheet point to the submission window, item mismatches to the case check, and price mismatches to the price file. If you cannot assemble all four documents for a case in ten minutes, start with the single structured request.