The JW Modifier & CMS Reimbursement for Discarded Part B Drugs & Biologicals

Effective January 1, 2017, CMS has instituted nationwide billing requirements for discarded Part B drugs and biologicals. Previously, CMS allowed providers the option of whether or not to use the JW modifier. In order to better track the amount of drugs and biologicals used and discarded, CMS has altered the policy to now require the use of the JW modifier.

The JW modifier only applies to single-use drug vials or single-use packages of separately payable Part B drugs (excluding those drugs paid under the Competitive Acquisition Program). In order to support the use of the JW modifier, the physician must fully document in the patient’s medical record the amount of the drug used and the amount discarded. That information must be included on the claim for reimbursement.

For coding/billing purposes:

  • The JW modifier is billed on a separate line, and applies only to the amount of the drug or biological that was discarded. The Medicare Claims Processing Manual provides the following example:
    • A single use vial that is labeled to contain 100 units of a drug has 95 units administered to the patient and 5 units discarded. The 95 unit dose is billed on one line, while the discarded 5 units may be billed on another line using the JW modifier.
  • The JW modifier does not apply, and reimbursement is not allowed, if the smallest billing unit for a drug or biological exceeds the amount of the drug or biological that was administered to the patient. The Medicare Claims Processing Manual provides the following example:
    • One billing unit for Drug A is equal to 10mg of the drug in a single use vial. A 7mg dose is administered to a patient while 3mg of the drug remaining is discarded. The 7mg dose must be billed at the 10mg billing unit because that is the smallest unit available for billing. The JW modifier WOULD NOT be used on the 3mg that were discarded because it was already accounted for in the 10mg billing unit.

When billing for the units used and the units discarded, the provider must bill these amounts on two separate lines on the claim. It would appear as follows:

  • Claim Line 1 – includes HCPCS Code for drug, number of units administered to patient, and calculation of price for amount of drug used on patient.
    • In order to satisfy the requirement of calculating the price of the drug, providers must make sure that they are maintaining accurate purchasing records for all drugs purchased and billed to Medicare.
  • Claim Line 2 – includes HCPCS Code for drug, JW Modifier, number of units discarded, and calculation of price for amount of drug discarded.
    • In order to satisfy the requirement of calculating the price of the drug, providers must make sure that they are maintaining accurate purchasing records for all drugs purchased and billed to Medicare.

Best regards,
Julia Leo, Esq., CHC
Chief Compliance Officer