JW modifier allows physicians to get paid for some discarded drugs

The Centers for Medicare & Medicaid Services (CMS) recently revised its guidance on how to use the JW modifier. Specifically, the revision will make it easier for physicians to get paid for leftover medication or biologicals that are properly thrown out.

Beginning Jan. 1 of next year, physicians must use the JW modifier for claims with unused drugs or biologicals from single-use vials or single-use packages that are appropriately discarded (except those provided under the Competitive Acquisition Program for Part B drugs and biologicals). The physician must also document the discarded drug or biological in the patient's medical record when submitting Part B claims.

For example, imagine you administer 95 units of a drug from a single-use vial that is labeled to contain 100 units and discard the remaining five units. You bill the 95-unit dose on one line of the claim and bill the discarded five units on another line by using the JW modifier. Both line items would be processed for payment. You apply the JW modifier only to the amount of drug or biological that is discarded.

You may not use the JW modifier when the billing unit is equal to or greater than the total actual dose and the amount discarded. For example, if one billing unit for a drug is 10 mg in a single-use vial and you administer 7 mg and discard the remaining 3 mg, you can bill the 7 mg dose as one 10 mg unit. You could not also bill the discarded 3 mg on a separate line item with the JW modifier because that would result in overpayment.

Medicare administrative contractors currently have discretion over whether to require the JW modifier for any claims with discarded drugs or biologicals, and how the discarded drug or biological information should be documented. CMS is revising this policy to create more uniformity for these types of claims.

For additional information on billing Medicare for discarded drugs and biologicals, see section 40 of chapter 17 of the Medicare Claims Processing Manual.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians