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Billing and coverage for drug wastage

Medicare Contractors will consider payment for unused and discarded portion of a single-use drug/biological product after administration of the appropriate (reasonable and necessary) dosage for the patient’s condition. This applies to drugs priced through the Average Sales Price (ASP) drug/biological program. The Centers for Medicare & Medicaid Services (CMS) encourages physicians, hospitals and other providers to provide injectable drug therapy incident to a physician’s services in a fashion that maximizes efficiency of therapy in a clinically appropriate manner. If a physician, hospital, or other provider must discard the unused portion of a single-use vial or other single-use package after administering a dose/quantity appropriate
to the clinical context for a Medicare beneficiary, the program provides payment for the entire portion of drug or biological indicated on the vial or package label.

If less than a complete vial is administered at the time of service, and the unused portion is discarded, drug wastage must be documented in the patient’s medical record with the date, time, and quantity wasted. Upon review, any discrepancy between amount administered to the patient and the billed amount will be denied, unless wastage is clearly documented. The amount billed as “wastage” must not be administered to another patient or billed again to Medicare. All procedures for drug storage, reconstitution and administration should conform to applicable Federal Drug Administration (FDA) guidelines and provider scope of practice.

Billing for Drug Wastage

HCPCS modifier JW is defined as “drug or biological amount discarded/not administered to any patient” and is used on claims to indicate drug wastage when the above measures have been taken. The JW modifier is only to be applied to the amount of drug/biological discarded.

The amount administered and the amount wasted must be billed on the same claim. The amount administered is on a separate detail line from the amount wasted, which is indicated with the modifier JW (when applicable).  

The modifier JW would not be used for claim billings when the actual dose of the drug/biological administered is less than the billing unit established by HCPCS description.

Drug wastage cannot be billed if none of the drug was administered (such as a missed appointment by the patient).

The JW modifier is not used on claims for drugs or biologicals provided under the Competitive Acquisition Program (CAP).

Please check with your respective state Medicare Contractors before applying modifier JW.

Billing Examples Using JW Modifier

If a provider administered a portion of a single-dose vial packaged medication to multiple patients for example: A provider schedules three Medicare patients to receive Botulinum Toxin Type A on the same day within the designated shelf life of the product. Currently, Botox is available only in the 100-unit size. Once Botox is reconstituted, it has a shelf life of only four hours.

The provider administers 30 units from the same single-use vial to each of the three patients. The remaining 10 units that must be discarded are billed to Medicare on the account of the last patient. Therefore, 30 units are billed on behalf of the first patient and 30 units are billed on behalf of the second patient.

However, for the third patient, 40 units are billed on behalf of this last patient, because the provider had to discard 10 units at that point since the shelf life had expired for the medication. Hence the last patient’s claim would indicate J0585 billed at quantity 30 (to indicate the amount administered to the patient) on one detail line. The next detail line would indicate J0585-JW billed at quantity 10 (to indicate the 10 units wasted from the 100-unit vial).It is considered best practice and highly advisable to document the records of all of the patients who received a fractional dose from that same single-dose vial packaged medication.

Therefore, Patient #1 received 30 units and document that there was no wastage. Patient #2 received 30 units and document that there was no wastage. Patient #3 received a 30-unit dose from the same single-dose vial with 10 units of wastage which will be documented in the last (#3) patient’s medical record stating the provider had to discard (waste) 10 units from the single-dose vial because the shelf life had expired for the medication. Providers can only bill the wastage on the last patient and document the amount wasted with the reason on this last patient’s medical record.







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