Discarded Drugs and Biologicals - Drugs and biologicals (e.g., infusion bags, vials, powders, syringes, etc.) that are not administered to the patient due to but not limited to compounding, spillage, breakage, unused, expired, etc.
Health Care Common Procedure Coding System (HCPCS) - Modifier JW - Indicates drug amount discarded or not administered to a patient.
Health Care Common Procedure Coding System (HCPCS) - Modifier JZ - Indicates zero drug amount wasted or discarded.
Medication Administration Record (MAR or eMAR for electronic version) - The report that serves as a legal record of the drugs administered to a patient at a facility by a health care professional.
Multi-Use Vial - A vial containing more than one dose of parenteral drug product.
National Drug Code (NDC) - A unique 11-digit, 3-segment number assigned to each medication listed under Section 510 of the U.S. Federal Food, Drug and Cosmetic Act. The number identifies the labeler or vendor, product, and trade package size.
Route of Administration - A path by which a drug is given to the patient. Examples are, but are not limited to, nasal, intramuscular, subcutaneous, intravenous, inhalation, oral, sublingual, rectal, topical and transdermal.
Short Stability Bulk Vial - A vial that potentially contains more than one dose of parenteral drug product but is treated as a Single-Use Vial if the drug product stability is less than 24 hours after entry.
Single-Dose Vial - A vial containing a single dose of a parenteral drug product.
Single-Use Vial or Package - A vial or package where a single dose of a parenteral drug product can be removed, and then the vial or package and its remaining contents must be disposed. Single-use vial or package is intended for use by a single patient.
Inpatient
Our health plan expects that a facility will have a pharmaceutical waste management system in place. Our health plan also expects the facility to utilize the most cost-effective vial or combination of vials of pharmaceutical when procuring and preparing a dose for administration to avoid pharmaceutical wastage.
To prevent unnecessary waste or the temptation to use contents from single-dose or single-use vials for more than one patient, healthcare personnel should select the smallest vial necessary for their needs when making purchasing decisions.
Medications must be recorded in the appropriate patient clinical record to be eligible for reimbursement. Medications not documented in an appropriate patient clinical record are not reimbursable. The appropriate patient clinical record for a patient admitted as an inpatient is the MAR, eMAR, anesthesia record, or emergency department record.
Documentation in the patient’s record must include name of drug, date administered, route of administration, actual dose administered to the patient, concentration, and total amount the vial is labeled to contain.
Note that medications may not be separately reimbursable in cases where a more appropriate code must be billed (Please see policy cross references for bundling edits and correct coding guidelines).
Multi-Use Vials are intended to be used on multiple patients. Drugs or biologicals not administered to a patient when the dosage is from a multi-use vial, other than from a short stability bulk vial, are not eligible for reimbursement.
Outpatient
Our health plan expects that a facility will have a pharmaceutical waste management system in place. Our health plan also expects the facility to utilize the most cost-effective vial or combination of vials of pharmaceutical when procuring and preparing a dose for administration to avoid pharmaceutical wastage.
To prevent unnecessary waste or the temptation to use contents from single-dose or single-use vials for more than one patient, healthcare personnel should select the smallest vial necessary for their needs when making purchasing decisions.
Medications and medication waste must be recorded in the appropriate patient clinical record to be eligible for reimbursement. Medications not documented in an appropriate patient clinical record are not reimbursable. The appropriate patient clinical record for outpatient services is the MAR, eMAR, or anesthesia record.
Anesthesia medications documented in an anesthesia record denoting the anesthesia care given, the drugs and fluids administered and the patient’s responses to the anesthesia care are eligible for reimbursement. For anesthesia medications to be eligible for reimbursement, all the following must be documented in the anesthesia record: name of the medication, route, amounts dispensed, concentrations, date, and time of administration.
Documentation in the patient’s record must include name of drug, date administered, route of administration, actual dose administered to the patient, concentration, and total amount the vial is labeled to contain.
- Note that medications may not be separately reimbursable in certain settings, including but not limited to ambulatory surgical centers and/or in cases where a more appropriate code must be billed (Please see policy cross references for bundling edits and correct coding guidelines).
Our health plan requires the NDC number, NDC units, and units of measurement to be placed on professional and/or outpatient facility claims to determine the standard reimbursement amounts for therapeutic and diagnostic drugs and biological products reimbursed under medical coverage.
Reimbursement will not be provided for drugs or biologicals that have not been administered to the patient at all even if specifically, and/or specially prepared for the patient or in instances where product could not be administered due to a missed appointment.
Multi-Use Vials are intended to be used on multiple patients. Drugs or biologicals not administered to a patient when the dosage is from a multi-use vial, other than from a short stability bulk vial, are not eligible for reimbursement.
Modifiers JW and JZ for Professional and Outpatient Facility Claims
Effective 1/1/2017 the Healthcare Common Procedure Coding System (HCPCS) code and/or the revenue code for the drug/biological administered to the patient must be reported on one claim line and the amount discarded/wasted must be reported on a separate line with the modifier JW on the same claim.
Effective 07/01/2023 Medicare requires modifier JZ to be reported on all claim lines for any single dose container considered separately payable when there are no discarded amounts.
The portion of the drug/biological not administered, is considered to be discarded. Drugs or biologicals discarded, wasted or not part of the dose administered to a patient from a short stability bulk vial, single use vial or single dose packaging are eligible for reimbursement.
Modifiers JW and JZ apply to Part B drug and biological claims.
The use of modifier JW is ONLY appropriate when the actual dose of the drug is less than a full vial (including when there is a combination of vials) and there is more than one billing unit for that vial (or combination of vials). The use of JW modifier is NOT appropriate when the waste amount is equal to or greater than any full vial of drug or bag of IV solution. The use of JW modifier alone without a corresponding line of un-modified HCPCS code demonstrating drug given is not reimbursable.
Claim Line Example for Modifier JW:
Claim line #1:
- HCPCS code for drug given
- No modifier
- Number of billing units given to the patient
- Calculate submitted price for ONLY the amount of drug given
Claim line #2:
- HCPCS code for drug wasted
- JW modifier to indicate waste
- Number of billing units wasted
- Calculate submitted price for ONLY the amount of drug wasted
Doses with no waste should be reported with modifier JZ.
The use of modifier JW is not appropriate when the actual dose of the drug or biological is less than the billing unit. For example, one billing unit for a drug is equal to 20 mg in a single use vial. A 15 mg dose is administered to the patient and 5 mg of the remaining drug is discarded. Billing for one unit on a separate claim line with modifier JW for the 5 mg of discarded drug would result in overpayment. In this situation the billing provider or supplier would report administering the full billing unit on a single line along with modifier JZ.
Claim Line Example for Modifier JZ for dose/waste equal to one billing unit:
- HCPCS code for drug given
- JZ modifier
- One billing unit
- Calculate submitted price for the full vial
U.S. Food and Drug Administration, Package Type
Centers for Medicare & Medicaid Services (CMS), Claims Processing Manual, Chapter 17, Sections 40 and 100.2.9
Centers for Medicare & Medicaid Services (CMS), Claims Processing Manual, Chapter 4 - Part B Hospital (Including Inpatient Hospital Part B and OPPS). Section 10.4 (Note: In the absence of inpatient guidelines, outpatient guidance is followed)
Local Coverage Article: Billing and Coding: JW and JZ Modifier Billing Guidelines (A55932)
Centers for Medicare & Medicaid Services (CMS), Medicare Program: Discarded Drugs and Biologicals - JW and JZ Modifier Policy, Frequently Asked Questions
Your use of this Reimbursement Policy constitutes your agreement to be bound by and comply with the terms and conditions of the Reimbursement Policy Disclaimer.