CMS has issued updated guidance regarding the appropriate billing of drugs/biologicals.  The new guidelines apply to all providers and are effective July 1, 2023.

Providers who bill for drugs administered from a single-use vial are required to report one of the following modifiers on all claims:

• Modifer JW- Drug amount discarded/not administered to any patient
• Modifier JZ- Zero drug amount discarded/not administered to any patient

Providers who fail to report one of these modifiers starting July 1, 2023 may be subject to audits.  Claims that do not contain the modifiers as appropriate on or after October 1, 2023 may be returned as unprocessed.
 
Improper reporting of drug units and drug waste has been identified as a compliance risk by both the OIG and CMS.

Providers are reminded to adhere to the following guidelines:

1. Clearly document in the patient’s medical record the actual dose administered and the exact amount wasted. 
2. Report the units administered according to the HCPCS code descriptor.  
3. Report the units discarded/wasted on a separate line with modifier JW.
4. If there is no discarded amount, report modifier JZ on the line item for the billed drug.
5. The total amount reported (administered + discarded) may not exceed the full vial dosage.
6. You may not report modifier JW when the discarded/wasted amount is less than the HCPCS unit.  In this instance, report a single line with modifier JZ.

EXAMPLE 1- PROPER BILLING, NO WASTE

EXAMPLE 2- PROPER BILLING, WASTE 
Dosages equal to or exceeding HCPCS unit
 

EXAMPLE 2- PROPER BILLING, WASTE 
Dosages less than HCPCS unit
 

Providers will need to update their billing systems to ensure compliance with the new modifier requirements.  We also recommend providing education and training to your clinical, coding, and billing staff regarding the updated documentation and billing requirements.  Additionally, providers should consider auditing and monitoring to validate claims submitted after the July 1^st
effective date are documented and billed accurately.
 
The CMS updated guidance is located here:  https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/jw-modifier-faqs.pdf

The Medicare Claims Processing Manual instructions are here: https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c17.pdf

We are here to help.  The HBE team is available to assist you with all of your coding, billing and compliance program needs.  We routinely provide compliance partner services to large health systems as well as physician practices. Our services include:

• Coding accuracy reviews
• Risk Assessments
• Clinical documentation improvement reviews
• Policy and procedure development
• Customized education and training for clinical and administrative staff