Starting Oct. 2, the Centers for Medicare & Medicaid Services (CMS) will kick back certain claims involving discarded or unused drugs if practices fail to implement a new billing and coding policy the payer has been phasing in since the beginning of the year.
Previously, CMS only required use of the “JW” modifier to list any amount of discarded drug, including zero. As of July 1, CMS will require a separate, payable claim using the new “JZ” modifier when no amount of drug was discarded or used. The JW modifier is to be used only when the number of discarded or unused drugs is higher than zero for single-dose containers.
“Because of observed low compliance with JW modifier use (leading to incomplete JW modifier data) and because the discarded drug refund amounts rely on this data, we established that a separate modifier, the JZ modifier, will be required on claims for single-dose container drugs to attest when there are no discarded amounts no later than July 1,” CMS stated in an FAQ document. As of Oct. 1, claims that do not use the modifiers correctly “may be returned as un-processable until claims are properly resubmitted.”
Neither the JW nor the JZ modifier may be used for drugs that are from multiple-dose packages, per CMS.
Physicians also must document the number of discarded single-dose container drugs in patients’ medical records. The modifiers do not apply to drugs administered in a rural health clinic or a federally qualified health center, per CMS.
This update is the final step in CMS’ implementation of the JZ modifier, which was slowly integrated this year:
- Jan. 1: Per CMS, physicians may report the JZ modifier.
- July 1: Physicians required to use the JZ modifier on applicable claims.
- Oct. 2: Claims editing starts when JW or JZ modifiers aren’t used correctly.
For information on how to report modifier JZ, determine discarded amounts, and report modifier JW, see CMS’ Frequently Asked Questions.
For further billing and coding resources, visit TMA’s Billing, Coding, and Reimbursement page.
Last Updated On
June 22, 2023
Originally Published On
June 21, 2023
Alisa Pierce
Reporter, Division of Communications and Marketing
(512) 370-1469