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Welcome to Global Integrated Reimbursement Services’ blog. The purpose of our blog is to allow access to a repository of issues that our company tracks regarding the reimbursement for pharmaceuticals, medical devices, diagnostics, biologics, and biosimilars. Also, it shows you how we can assist you in these areas.

Medicare Part B Policy Change for Discarded Drugs and Biologics for 2017


In addition to paying for the amount of drug that has been administered to a Medicare patient/beneficiary, Medicare Part B also reimburses the amount of discarded drug, up to the amount on the package label. The discarded drug amount is the amount of a single use vial or other single use package that remains after administering a dose/quantity of the drug to a Medicare beneficiary.

Effective Jan. 1, 2017, the Center for Medicare and Medicaid Services (CMS) will require uniform use of the JW modifier for Part B drugs or biologicals from single use vials or single use packages.   Under this policy change, providers and suppliers will be required to:

  • Use the JW modifier when submitting Part B claims for discarded drug or biological amount not administered to any patient, except for Competitive Acquisition Program (CAP) drugs and biologicals, and
  • Document the discarded drugs or biologicals in patient’s medical record.

Under current policy, the JW modifier is required only at the discretion of the Medicare Administrative Contractors (MACs).  CMS revised this policy to require a national uniform use of the JW modifier for all claims for discarded Part B drugs and biologicals except CAP drugs and biologicals.  CMS will be implementing this national policy to track the discarded amounts of drugs after administration to a Medicare beneficiary.

The providers most impacted by this national policy are the physician offices and the hospital outpatient settings as the JW modifier will be used mostly in these settings of care for drugs administered incident to physicians’ services. The JW modifier requirement also applies to Critical Access Hospitals (CAHs) since drugs are separately reimbursable in the CAH setting.

The JW modifier is not for use for hospital inpatient admissions claims that are billed under the Inpatient Prospective Payment System (IPPS) or for Rural Health Clinic (RHC) or a Federally Qualified Health Center (FQHC) as drugs are not generally separately reimbursed in these settings.

The modifier is required only for drugs in single dose or single use packaging.   This modifier, billed on a separate line, will provide payment for the amount of discarded drug or biological.

Claims with date of service January 1, 2017 or later, billed and submitted for discarded drugs or biologics that do not use the JW Modifier correctly will be subject to review.

GIRS has drafted Billing Guides with guidance for our clients’ accounts on this new requirement for the JW modifier.  Such guidance provided in a timely manner will prevent the denial of claims and the delay in payment in 2017 and future years.

Also, through our InContact Reimbursement Hotline, our dedicated reimbursement team can play an invaluable role to educate providers on submitting clean claims, appealing denials of coverage and payment, as well as other payer requirements. To avoid claims review or denials for these discarded drugs or biologicals, contact us  so that we may assist you with updating your billing guides and supporting your accounts and sales teams safely.