Waste Not, Want Not: Billing Unused Drug Supplies
Physicians sometimes must discard an unused portion of a drug. If the physician (rather than the patient and/or facility) supplies the drug, Medicare may allow compensation for this “wasted” portion.
As instructed by the National Medicare guidelines for reporting drug waste found in the Claims Processing Manual, chapter 17, § 40.0, drug waste is reported in addition to the drug administered. Using the appropriate HCPCS Level II supply code, list the drug administered with the correct number of units in box 24D of the CMS-1500 claim form. You should enter the number of wasted units as a second line item. Provider documentation must verify the exact dosage of the drug injected, and the exact amount and reason for any waste.
Medicare contractors generally require that you append modifier JW Drug or biological amount discarded/not administered to any patient to identify an unused drug from single-use vials or single-use packages that are appropriately discarded.
For example, from a single-use vial that is labeled to contain 100 units, 95 units are administered to the patient and five units are discarded. The-95 unit dose is billed on one line, and the five discarded units are billed on another line with modifier JW. Both line items would be processed for payment.
You should not apply modifier JW when the actual dose of the drug or biological administered is less than the billing unit. “For example,” the Claims Processing Manual advises, “one billing unit for a drug is equal to 10 mg of the drug in a single use vial. A 7 mg dose is administered to a patient while 3 mg of the remaining drug is discarded. The 7 mg dose is billed using one billing unit that represents 10 mg on a single line item. The single line item of 1 unit would be processed for payment of the total 10 mg of drug administered and discarded. Billing another unit on a separate line item with the JW modifier for the discarded 3 mg of drug is not permitted because it would result in overpayment. When the billing unit is equal to or greater than the total actual dose that was administered and the amount discarded, the use of the JW modifier is not permitted.”
Note that Medicare will reimburse only for drugs supplied in “single-use vials,” and CMS officially encourages “physicians, hospitals and other providers to schedule patients in such a way that they can use drugs or biologicals most efficiently, in a clinically appropriate manner.”
Caution: Unique billing rules apply when reporting discarded erythropoietin stimulating agents for home dialysis. See the Medicare Claims Processing Manual, chapter 17, § 40.1 for more details.