Drug wastage policies
The primary aim of the drug wastage policy is to mitigate potential waste and/or abuse by offering guidance on proper billing and reporting practices for discarded drugs and biologicals.
This reimbursement policy applies to all single-use/dose vial (SDV) or other single-use/dose package drugs reported using the 1500 Health Insurance Claim Form (CMS-1500), UB04 claim form or their electronic equivalent. This policy applies to all products, all network and non-network physicians and other qualified health care professionals. All services covered by this policy may also be subject to additional reimbursement policies/claim editing, including the NCCI Editing Policy and Maximum Frequency per Day, prior authorization requirements, National Drug Code (NDC) billing requirements, etc. In a conflict, federal and state guidelines, as applicable, and the member’s benefit plan document supersede the information in this policy.
When a physician, hospital or other provider/supplier discards the balance of a single use/dose vial or other single use/dose package after administration of a drug or biological, reimbursement may be made for the amount of drug or biological discarded as well as the dose administered. Reimbursement will not be made for the wastage in situations where the drug is not separately reimbursable. Payment for the discarded drug will only be made if the smallest vial, or combination of vials, was used to provide the patient the necessary dosage.
First policy
The first policy requires the use of the JW/JZ modifiers. When a SDV or other single-use/dose package drugs are administered, one of the drug wastage modifiers must be present on the claim:
- JW: Drug amount discarded/not administered to any patient
- Claims with JW should be billed with two service lines. One line with no JW modifier and the number of units administered in the units field. The second line should contain the JW modifier and the number of units discarded in the units field.
- JZ : Zero drug amount discarded/not administered to any patient
- Claims with JZ are billed on a single line with the JZ modifier and the number of units administered in the units field.
In situations where a drug is billed without modifier JZ or JW, the applicable drug line, and associated administration fees, will be denied. In addition, if a claim with the JW is billed but is missing the claim line for the same medication without the JW modifier, the drug line, and associated administration fees, will be denied.
It is inappropriate to append the JW/JZ modifiers to a multi-dose vial (MDV) drug. Claims will be denied if the JW or JZ modifier is appended to MDV drugs.
In addition, suppliers and providers must document the amount of the discarded drug in the member’s medical records.
For more information on the use of JW and JZ modifiers see Medicare’s discarded drugs and biologicals – JW modifier and JZ modifier policy: frequency asked questions (PDF).
Second policy
The second policy requires providers to use the smallest vial size, or combination of vials, that would have provided the appropriate dosage for the member and produced the smallest amount of waste. If a larger vial was used unnecessarily the entire drug wastage line will be denied.
As a reminder, for drugs authorized through Prime Therapeutics, the authorization includes vial size in the calculation of the dosage approved. This means that the units approved, for the appropriate dosage, already include any potential drug waste for each administration. Therefore, if a larger than necessary vial size is used Prime Therapeutics will also deny the waste line as exceeding authorized units.