CMS clarifies Modifier JW use with drugs

As we previously noted in a prior WebNews on June 14, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a Transmittal that required mandatory use of modifier JW on claims for “discarded drug or biological amount not administered to any patient”.  This Transmittal (3530) was replaced by Transmittal 3538 released on June 9, 2016 with an implementation date of January 1, 2017.  That date remains as the effective date for JW use.  You can link to Transmittal 3538 here


What was not clear is whether an unused drug or biological should appear on claims in all situations with modifier JW – even if there is no reimbursement expected.  On August 26, 2016, CMS released a short 5-page FAQ which helps some.  This FAQ notes:

  • Prior policy allowed the MACs to choose whether to require the JW modifier. MACs were also able to issue jurisdiction-specific instructions for the use of the modifier.  That is no longer the case.
  • The modifier is not required:
    • If no discarded drug is being billed to any payer.
    • When drugs are not separately payable, such as packaged drugs and those administered in a Rural Health Clinic (RHC) or a Federally Qualified Health Center (FQHC).   
    • Drugs paid under the Part B drug Competitive Acquisition Program (CAP).  Note that CAP remains on hold and there is no current list of CAP medications.
    • Perhaps most importantly, the question of “overfill” is addressed.  Remember that many of our intravitreal drugs contain overfill to ensure that an adequate amount of drug is placed into the syringe for use even though, as a single-dose vial, the overfill is not billable nor can it be used for other beneficiaries by “splitting” the vials.  CMS notes this:
      • The JW modifier must not be used to report overfill wastage.
      • Beginning January 1, 2011, Medicare issued regulations expressly prohibiting billing for overfill, which is any amount of drug greater than the amount identified on the package or label.
      • CMS also re-addressed (without change) the important issue of documenting unused drug.  CMs noted “CMS expects that providers and suppliers will maintain accurate (medical and/or dispensing) records for all beneficiaries as well as accurate purchasing and inventory records for all drugs that were purchased and billed to MedicareProviders and suppliers should also check with the MAC that processes their Part B drug claims in case additional information on billing and documentation is available at the local level.”  We strongly agree that this provides the most compliance and also suggest that your operative notes document that all unused drug (including overfill) is discarded via the appropriate method.


As always, if you need assistance, Corcoran Consulting Group can help.   (800) 399-6565



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