Don’t Waste Drug Revenue – Application of JW Modifier

I. Modifier JW Reporting Requirements

Effective January 1, 2017, The Centers for Medicare and Medicaid Services ("CMS") require JW Modifier be appended for waste associated with the administration of a single use or single-dose vial ("SDV"). The newly implemented requirement impacts both physician offices and outpatient hospital departments that bill Medicare Part B and requires waste to be documented and billed with Modifier JW for any SDV's with status indicator of G (Pass-Through Drugs and Biologicals) or K (Nonpass-Through Drugs and Nonimplantable Biologicals, including Therapeutic Radiopharmaceuticals). It is important to note, the new requirement does not apply to drugs administered in a Federally Qualified Health Center ("FQHC") or Rural Health Clinic ("RHC") setting, or drugs paid under the Part B Competitive Acquisition Program ("CAP").

II. Coverage Background

In 2007, CMS introduced Modifier JW when reporting the amount of a SDV that was discarded and not administered to a patient. Until now, the reporting of Modifier JW was optional, allowing Medicare Administrative Contractors ("MAC's") to establish guidance regarding the use of the Modifier for specific drug HCPCS codes.

CMS has long encouraged practitioners to schedule patients so that drugs can be used efficiently; but when the remainder of a single use vial must be discarded after being administered, Medicare covers the amount discarded, in addition to the amount administered. However, to be eligible for reimbursement, the amount ordered, administered, and discarded must be documented in the medical record (CMS Publication 100-04, Chapter 17, Section 40).

While Medicare will continue to pay for waste discarded from SDV's, the new requirement will enable Medicare to distinguish the amount wasted and potentially lead to changes in reimbursement over the long term. Medicare Program FAQ published on August 26, 2016, indicates that claims for drugs furnished on or after January 1, 2017 without Modifier JW, may be subject to review.

III. Reporting Examples

Append Modifier JW when the drug dose administered exceeds the HCPCS' billing unit:

  • HCPCS billable unit = 30 mg.
  • Drug A available in single use 60 mg vial.
  • Documentation supports patient received 30 mg and 30 mg was wasted.
    • Bill HCPCS code = 1 unit (30mg administered).
    • Bill HCPCS code =1 unit with Modifier JW (30 mg wasted).

Do not append Modifier JW when the drug dose administered is less than the HCPCS' billing unit.

  • HCPCS billable unit = 60 mg.
  • Drug A available in single use 60 mg vial.
  • Documentation supports patient received 30 mg and 30 mg was wasted.
    • Bill HCPCS code = 1 unit.
    • Although Modifier JW does not need appended, the waste should be documented on the medical record.

IV. Recommended Actions

Many Electronic Health Record ("EHR") systems required substantial upgrades to meet the documentation and billing requirements for Modifier JW, a key component of which was ensuring the EHR and billing platforms work together seamlessly. That said, many providers have been forced to utilize a combination of edit reporting and manual intervention to ensure appropriate application of Modifier JW, all of which adds complexity to the claim submission process. Medicare requires the Medication Administrative Record ("MAR") documentation include the following:

  • Name of Medication
  • Dosage
  • Time Given
  • Route of Administration
  • Patient reaction (if any)
  • Name of person who administered the education
  • Waste (if any)

Taking a multi-disciplinary approach to find the right solution is vital to ensure drugs are being billed compliantly for each department and or office setting. Additionally, updating documentation policies and providing education to clinical staff responsible is important to mitigate risk. Finally, initiating routine internal reviews of Modifier JW assignment, while maintaining open lines of communication, will further enhance compliance with the new reporting requirements.

SunStone offers comprehensive solutions specifically geared to assisting providers manage the pharmacy revenue cycle. If you have any questions about the JW modifier requirement or other issues impacting the pharmacy, please contact Vonda Moon, Principal at, or Kristie Bailey, Senior Manager at