Background
In 2007, The Centers for Medicare and Medicaid Services (“CMS”) introduced modifier JW for reporting the amount of a single use or single-dose vial (“SDV”) that was discarded and not administered to a patient. Until January 1, 2017, 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.
Beginning January 1, 2017, CMS required JW modifier be appended for waste associated with the administration of a SDV. The requirement impacted both physician offices and outpatient hospital departments that bill Medicare Part B, requiring 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). The requirement did not apply to drugs administered in the Federally Qualified Health Center (“FQHC”) or Rural Health Clinic (“RHC”) setting.
Because there was low compliance with providers reporting the JW modifier, modifier JZ, a HCPCS Level II claim modifier was developed when no amount of a separately payable Part B SDV was wasted. Appending the JZ modifier serves as an attestation by the provider there was no waste of any portion of an SDV. Conversely, if there is waste, providers and suppliers must report modifier JW on a separate line with the combination of both lines totaling the amount of the SDV.
The requirement to append modifier JZ for separately payable SDV’s under Medicare Part B (OPPS and MPFS) became effective July 1, 2023, with CMS stating they could begin to audit claims as of that date. More importantly, beginning October 1, 2023, claims containing SDV’s without modifier JZ or a combination of the drug and the modifier JW totaling the SDV amount, may be returned as un-processable. Meaning, they will not pay the entire claim until it is submitted with the appropriate modifiers. CMS’s Frequent Asked Questions (“FAQ”) regarding the change can be found at the following link here.
Reporting Examples
SDV Administered with Waste - Append modifier JW as follows:
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).Effectively Implementing New Guidelines
SDV Administered w/out Waste - Append modifier JZ as follows:
HCPCS billable unit = 30 mg
Drug A available in single use 60 mg vial
Documentation supports patient received 60 mg with no waste
Bill HCPCS code = 2 units (60mg) administered with modifier JZ
Effectively Implementing New Guidelines
Many Electronic Health Record (“EHR”) systems required upgrades to meet the documentation and billing requirements for modifier JW, a key component of which was ensuring the EHR and billing platforms worked together seamlessly. That said, we find many providers are not effectively capturing and/or billing drug waste appropriately. While to date, Medicare will reimburse both the amount administered and wasted for separately payable SDV’s, it is vital to ensure appropriate application of modifiers JW and JZ moving forward so as to mitigate denials.
Effectively documenting and billing SDV’s requires evaluating the EHR and updating documentation policies and procedures, to include:
Ability to identify a drug as single-dose
Documenting both administration amount and waste amount
When SDV is administered with no waste documented, the JZ modifier is appended
When SDV is administered and waste is documented, two (2) separate line items are reported; administration amount (no modifier) and waste amount (JW modifier)
Additionally, providing training and education to clinical staff responsible for administration and documentation of medications within the Medication Administration Record (“MAR”) is vital. Medicare requires the 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)
SunStone offers comprehensive services specifically geared to help providers evaluate and navigate the ever-changing regulatory environment. If you have any questions, please contact:
Vonda Moon, Senior Principal at vondamoon@sunstoneconsulting.com
Joli Fitzgibbons, Director at jolifitzgibbons@sunstoneconsulting.com