Policy Statement
Inpatient
Our health plan expects that a facility will have a pharmaceutical waste management system in place. Our health plan also expects the facility to utilize the most cost-effective container or combination of containers when procuring and preparing a dose for administration to avoid pharmaceutical wastage.
To prevent unnecessary waste or the temptation to use contents from single-dose or single-use containers for more than one patient, healthcare personnel should select the smallest container necessary for their needs when making purchasing decisions.
Medications must be recorded in the appropriate patient clinical record to be eligible for reimbursement. Medications not documented in an appropriate patient clinical record are not reimbursable. The appropriate patient clinical record for a patient admitted as inpatient is the MAR, eMAR, anesthesia record, or emergency department record.
Documentation in the patient’s record must include name of drug, date administered, route of administration, actual dose administered to the patient, concentration, and total amount labeled on the container.
- Note that medications may not be separately reimbursable in cases where a more appropriate code must be billed (Please see policy cross references for bundling edits and correct coding guidelines).
Multi-Use containers are intended to be used on multiple patients. Drugs or biologicals not administered to a patient when the dosage is from a multi-use container, are not eligible for reimbursement.
Outpatient
Our health plan expects that a facility will have a pharmaceutical waste management system in place. Our health plan also expects the facility to utilize the most cost-effective container or combination of containers when procuring and preparing a dose for administration to avoid pharmaceutical wastage.
To prevent unnecessary waste or the temptation to use contents from single-dose or single-use containers for more than one patient, healthcare personnel should select the smallest container necessary for their needs when making purchasing decisions.
Medications and medication waste must be recorded in the appropriate patient clinical record to be eligible for reimbursement. Medications not documented in an appropriate patient clinical record are not reimbursable. The appropriate patient clinical record for outpatient services is the MAR, eMAR, or anesthesia record.
Anesthesia medications documented in an anesthesia record denoting the anesthesia care given, the drugs and fluids administered and the patient’s responses to the anesthesia care are eligible for reimbursement. For anesthesia medications to be eligible for reimbursement, all the following must be documented in the anesthesia record: name of the medication, route, amounts dispensed, concentrations, date, and time of administration.
Documentation in the patient’s record must include name of drug, date administered, route of administration, actual dose administered to the patient, concentration, and total amount labeled on the container.
- Note that medications may not be separately reimbursable in certain settings, including but not limited to ambulatory surgical centers and/or in cases where a more appropriate code must be billed (Please see policy cross references for bundling edits and correct coding guidelines).
Our health plan requires the NDC number, NDC units, and units of measurement to be placed on professional and/or outpatient facility claims to determine the standard reimbursement amounts for therapeutic and diagnostic drugs and biological products reimbursed under medical coverage.
Reimbursement will not be provided for drugs or biologicals that have not been administered to the patient at all even if specifically, and/or specially prepared for the patient or in instances where product could not be administered due to a missed appointment.
Multi-Use Containers are intended to be used on multiple patients. Drugs or biologicals not administered to a patient when the dosage is from a multi-use containers are not eligible for reimbursement.
Modifiers JW and JZ for Professional and Outpatient Facility Claims
JW and JZ modifier(s) apply to all drugs separately payable under Medicare Part B that are described as being supplied in a “single-dose” container or “single-use” package based on FDA-approved labeling.
Effective 1/1/2017, the Healthcare Common Procedure Coding System (HCPCS) code and/or the revenue code for the drug/biological administered to the patient must be reported on one claim line and the amount discarded/wasted must be reported on a separate line with the modifier JW on the same claim.
Effective 07/01/2023 Medicare requires modifier JZ to be reported on all claim lines for any single dose container considered separately payable when there are no discarded amounts.
The portion of the drug/biological not administered is considered to be discarded. Drugs or biologicals discarded, wasted or not part of the dose administered to a patient from a single use container or single dose packaging are eligible for reimbursement.
The use of modifier JW is ONLY appropriate when the actual dose of the drug is less than a full container (including when there is a combination of containers) and there is more than one billing unit for that container (or combination of containers). The use of JW modifier is NOT appropriate when the waste amount is equal to or greater than any full drug container or bag of IV solution. The use of JW modifier alone without a corresponding line of un-modified HCPCS code demonstrating drug given is not reimbursable.
Claim Line Example for Modifier JW:
Claim line #1:
- HCPCS code for drug given
- No modifier
- Number of billing units given to the patient
- Calculate submitted price for ONLY the amount of drug given
Claim line #2:
- HCPCS code for drug wasted
- JW modifier to indicate waste
- Number of billing units wasted
- Calculate submitted price for ONLY the amount of drug wasted
Doses with no waste should be reported with modifier JZ.
The use of modifier JW is not appropriate when the actual dose of the drug or biological is less than the billing unit. For example, if one billing unit for a drug equals 20 mg in a single-use container, and a 15 mg dose is administered to the patient with 5 mg discarded, billing for one unit on a separate claim line with modifier JW for the 5 mg of discarded drug would result in overpayment. In this situation, the billing provider or supplier should report administering the full billing unit on a single line along with modifier JZ.
Claim Line Example for Modifier JZ for dose/waste equal to one billing unit:
- HCPCS code for drug given
- JZ modifier
- One billing unit
- Calculate submitted price for the full container
References
Cross References
- Adm 105 - Bundling Edits
- Adm 129 - Correct Coding Guidelines
- Fac 105 - Reimbursement of Chest X-Rays and Radiologic Guidance for Facilities
- Fac 109 - Reimbursement of Intravenous (IV) Solutions Premixed IV Medications Epidural Intra-arterial and Intrathecal Solutions and Total Parenteral Nutrition
- Med 104 - Drugs Immunizations-Vaccines Radiopharmaceuticals and Skin Substitutes Reimbursed Under Medical Coverage
- Med 112 - Cellular and Gene Therapy Products
