On Jan. 1, 2017, the Centers for Medicare & Medicaid Services (CMS) and Medicare Administrative Contractors (MACs) began requiring the use of the JW modifier. The JW modifier is appended to applicable drug HCPCS codes to report the discarded amount of unused injectable medication from a single-dose vial. The HCPCS code and JW modifier are reported on a separate claim line from the drug HCPCS code representing the amount that was actually administered. The modifier is not required for the claim line representing the amount of medication administered.

When the JW modifier is reported on a claim, payment is provided for the medication that was wasted, in addition to the payment for the amount of medication administered to a patient. This policy applies to all separately payable medications. This means that all drug HCPCS codes with a status indicator of G (pass-through drugs and biologicals paid under the OPPS, the Outpatient Prospective Payment System) or K (non-pass-through drugs and non-implantable biologicals, Including therapeutic radiopharmaceuticals paid under the OPPS). The JW modifier does not apply to those medications provided via the Competitive Acquisition Program (CAP), or to drugs packaged in multi-dose vials.

Contractor Scrutiny

Recovery Auditors (RAs) have been conducting complex chart reviews for those medications requiring the use of JW modifier, when applicable. The auditors are looking to ensure that the amount documented as administered matches what was billed, and that the amount discarded reported with a JW modifier was appropriate, based on medical record documentation. They are looking for clear documentation in the medical record that the leftover medication was discarded. CMS does not indicate where this documentation should be retained, but ensure that your staff is aware when medical record documentation is requested for review by a Recovery Auditor.

Remember that the unused portion of a single-dose (single-use) vial must be discarded, and not used for another patient. The JW modifier is not allowed when the amount of medication administered is less than the HCPCS billable units. For example, if a HCPCS code description for a drug lists 20 mg and 18 mg is administered to a patient, the 2 mg left over is discarded, so the JW modifier would not apply, because the dose administered is less than the HCPCS billable unit. The total quantity on the claim would be one billable unit in this scenario.

As stated earlier, the JW modifier does not apply to medications packaged in multi-dose vials. Recovery Auditors have reviewed claims for medications that come in multi-dose vials and found instances in which the medication was billed on the claim along with a line with a JW modifier assigned. One example of this is Trastuzumab (Herceptin), which is also packaged as a multi-dose vial. It is important to note that claims for Trastuzumab administered from a multi-dose vial and the HCPCS billed with a JW modifier will be denied. CMS encourages hospitals to use their resources as efficiently as possible, which also means administering medication in such a way as to minimize wastage (for example, using the smallest vial size available for a dose).

A Simple Solution

Panacea’s proprietary software, PHARMauditor™, assists our client organizations in automating reviews of their pharmacy formulary and chargemaster information to ensure that drug HCPCS codes assigned at the NDC level are being appropriately maintained for billing purposes. Our system contains up-to-date proprietary benchmark information, which allows your hospital pharmacy to review the details of each drug at the NDC level. PHARMauditor can also assist your organization with identifying those medications that require the JW modifier, plus easily identifying if a medication is a single-dose or multi-dose vial, dosage quantity, appropriateness of NDC, etc. Our system produces easy-to-understand reports that highlight any potential drugs charges requiring attention. For more information on how Panacea can assist your organization in keeping your pharmacy formulary and chargemaster compliant, go online to pharmacy coding and billing reviews to schedule a demo, or contact us directly by phone at 866-926-5933 or by email at contact@panaceainc.com.

Panacea recommends that you and your team review the resources and documents provided below to ensure understanding of Recovery Auditor activities and understanding of coding, billing, and documentation requirements for drugs packaged into single-use (single-dose) vials.

References:

Medicare Claims Processing Manual, Chapter 17, section 40 – Discarded Drugs and Biologicals

Incorrect Number of Units Billed for Rituximab (HCPCS J9310) and Bevacizumab (HCPCS C9257 and J9035) – Dose versus Units Billed

Recovery Auditor Approved Topic 0074 – Drugs and Biologicals: Incorrect Units Billed 

Medicare Quarterly Provider Compliance Newsletter – Guidance to Address Billing Errors / Recovery Auditor Findings for 0074 

Medicare Quarterly Provider Compliance Newsletter – Guidance to Address Billing Errors / Recovery Auditor Findings for Trastuzumab