Some Medicare Part B drug claims will soon require new modifier

Update (Oct. 20, 2023): CMS has released updated JW and JZ Modifier FAQs for additional clarity on billing with these modifiers (see FAQs 7, 8, and 18–22). CMS also posted a new list of billing and payment codes only used for single-dose containers that may require the modifiers, depending on the setting. The list doesn’t include all drugs subject to the JW and JZ modifier policy. CMS plans to update it semi-annually.

Most clinicians will have to use a new modifier for some Medicare Part B drug claims starting July 1. After that date clinicians must report either modifier JW (“Drug amount discarded/not administered to any patient”) or JZ (“Zero drug amount discarded/not administered to any patient”) on all separately payable Medicare claims for drugs from single-dose containers, unless the drug is administered in a Rural Health Clinic or a Federally Qualified Health Center. Medicare claims for drugs furnished on or after July 1 that do not report one of those modifiers may be subject to audits. Claims that do not report the modifiers on or after Oct. 1 may be returned as not processable.

The change is intended to give the Centers for Medicare & Medicaid Services (CMS) more complete data on discarded drugs in order to process refunds. Medicare has required the JW modifier on all claims with unused and discarded drugs or biologics from single-use packages since 2017, and The Infrastructure Investment and Jobs Act passed in 2021 requires drug manufacturers to refund CMS for certain discarded amounts. But, according to CMS, compliance with JW modifier use has been low, leading to incomplete data on discarded drugs. Therefore, the agency is now going to require clinicians to use modifier JZ to affirmatively attest that there are no discarded amounts when modifier JW is not used.

Note that the new modifier JW and JZ policy applies only to drugs separately payable under Medicare Part B that are supplied in a “single-dose” container or “single-use” package, as described by their Food and Drug Administration-approved label. These modifiers are not to be used for any drugs that are from multiple-dose containers. They also are not required for vaccines described under section 1861(s)(10) of the Social Security Act that are furnished from single-dose containers, such as the influenza, pneumococcal, and COVID–19 vaccines.

Private payers may adopt the new Medicare modifier policy at their discretion (UnitedHealthcare has announced it will align with CMS’ modifier JZ requirements beginning Oct. 1, 2023). Modifiers JW and JZ are part of the HIPAA-compliant HCPCS code set and may be reported to all payers without resulting in claims rejections or denials from payers that do not require them.      

For additional information, please see the related frequently asked questions on the CMS website and this Medicare Learning Network Matters article.

— Kent Moore, AAFP Senior Manager for Payment Strategies

Posted on June 6, 2023