Billing and Coding: JW and JZ Modifier Billing Guidelines

This article addresses the required use of the JW and JZ modifier to indicate
drug wastage. CMS and Noridian encourage physicians, hospitals and other
providers and suppliers to administer drugs and biologicals to patients in
such a way that these are used most efficiently, in a clinically appropriate
manner (IOM [100-4 Chapter 17, Sections
40-40.1](http://www.cms.gov/Regulations-and-
Guidance/Guidance/Manuals/downloads/clm104c17.pdf)).

When a physician, hospital or other provider or supplier must discard the
remainder of a single-use vial or other single-use package after administering
a dose/quantity of the drug or biological to a Medicare patient, the program
provides payment for the discarded drug or biological amount as well as the
dose administered, up to the amount of the drug or biological as indicated on
the vial or package label.

The following serves to clarify billing guidelines and provide examples of
proper billing with a single-dose vial and discarded drug billing:

  * Providers and hospitals are reminded to ensure amounts of drugs administered to patients are accurately reported in terms of the dosage specified in the long descriptor for the applicable HCPCS codes. This is because the short descriptors are limited to 28 characters so they do not always capture the complete description of the drug.
  * When submitting Medicare claims, units of service (UOS) should be reported in multiples of the dosage included in the long HCPCS code descriptor. If the dosage given is not a multiple of the number provided in the HCPCS code description, the provider shall round up to the nearest whole number in order to express the number as a multiple.
  * If the provider must discard the remainder of a single-use vial or other package after administering the prescribed dosage of any given drug, Medicare may cover the amount of the drug discarded along with the amount administered. The following elements must be followed in order for the discarded amount to be covered. 
    1. The vial must be a single-use vial. Multi-use vials are not subject to payment for any discarded amounts of the drug.
    2. The units billed should where possible correspond with the smallest dose (vial) available for purchase from the manufacturer(s) that could provide the appropriate dose for the patient, while minimizing any wastage. 
      1. For example, bevacizumab (1 unit=10mg) is supplied as 100mg in a 4mL single-use vial or 400mg in a 16mL single-use vial. If the physician administers 300mg of bevacizumab to a patient. The most efficient way to administer this dose is with three-100mg vials. The 300mg is billed as 30 UOS. An incorrect method would be if the physician had utilized the 400mg single-use vial and discarded the remaining 100mg in the vial; as this would not be the most efficient way to minimize drug wastage.
      2. As another example, if the dose of bevacizumab (1 unit=10mg) administered had been 305mg, 31 UOS would have been billed and 9 UOS would have been billed on a separate line with the JW modifier. Note: Providers must round up to the nearest multiple of what one unit of the drug is (e.g. 1 unit is 10mg and if 305mg is administered, providers must round up to the next full unit).
    3. Any amount of drug billed as wastage from a single-dose vial, must actually be discarded and may not be used for another patient regardless of whether or not that other patient has Medicare.
  * Please clearly document in the patient's medical record the actual dose administered in addition to the exact amount wasted and the total amount of the vial is labeled to contain. This kind of detailed documentation helps benefit your practice by justifying your billing in the event a medical review should occur.
  * Medicare requires discarded drugs be reported with the JW modifier on a separate line, the total number of discarded units reported should not include amounts of the drug also included on the administered line due to the rounding up of units.
  * Please remember to verify the milligrams administered to the patient and then convert to the proper units for billing.
  * Due to single-use vial type, the provider may bill for the amount administered as well as the amount appropriately discarded. The discarded amount is reported with the JW modifier. The JW modifier is only applied to the amount of the drug or biological that is discarded. A situation in which the JW modifier is not permitted is when the actual dose of the drug or biological administered is less than the billing unit. (See "[Medicare Claims Processing Manual](http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c17.pdf)," Chapter 17, Section 40). As an example, if one billing unit for a drug is equal to 10mg of the drug in a single-use vial, and a 7mg dose is administered to a patient resulting in 3mg remaining drug being discarded, then the 7mg dose is billed using one UOS that represents 10mg on a single line item. The single line item would be processed for payment of the total 10mg of the drug administered and discarded. Billing another unit on a separate line item with the JW modifier for the discarded 3mg of the drug is not permitted because it would result in an overpayment. Therefore, when the billing unit is equal or greater than the total actual dose and the amount discarded, the use of the JW modifier is not permitted.
  * Effective July 1, 2023, Medicare requires the JZ modifier on all claims for single-dose containers where there are no discarded amounts. 

To submit claims for a waste-required claim, submit two complete claim lines.

Claim line #1:

  * HCPCS code for drug given
  * No modifier
  * Number of units given to the patient
  * Calculated submitted price for ONLY the amount of drug given

Claim line #2:

  * HCPCS code for drug wasted
  * JW modifier to indicate waste
  * Number of units wasted
  * Calculated submitted price for ONLY the amount of drug wasted

To submit claims for a non-discarded claim, submit one complete claim line.

  * HCPCS code for drug given
  * JZ modifier to indicate no waste
  * Number of units given to the patient
  * Calculate submitted price for the amount given

Sources:

  1. [CR 9603-JW Modifier: Drug amount discarded/not administered to any patient](https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3538CP.pdf)
  2. [Internet Only Manual (IOM) 100-4-Claims Processing Manual; Chapter 17-Drugs and Biologicals; Sections 40-40.1](https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c17.pdf)
  3. [Discarded Drugs and Biologicals - JW Modifier and JZ Modifier Policy Frequently Asked Questions (cms.gov)](https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/jw-modifier-faqs.pdf)