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CMS update: July 1 billing for waste changes for home infusion providers now optional

Jeanne Lugli
June 28, 2023
Pharmacy Revenue cycle

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Some Medicare requirements have been in place for years. Take the Medicare Part B requirement to bill for waste when the entire vial of a single-dose or single-use container of a drug is not utilized in its entirety. While the Centers for Medicare & Medicaid Services (CMS) rolled out this regulation in 2017, it was uncommon for a provider to take the time to bill for the waste. Why? The answer’s simple. The provider is reimbursed for the full vial whether they billed for a full vial or billed the drug on two separate lines (one for the portion used and the other line for the portion wasted).  Additionally, some pharmacies are set up to bill exact quantity. In those instances, the pharmacy may not have even realized they could bill for the portion not used from a single-use vial. The reality is that there simply was no incentive nor penalty for the provider to take the extra steps and time to capture and bill for the waste.

Why change was considered

It was obvious to CMS that providers weren’t billing for waste when it occurred because the amount of waste reported for single-dose vials was miniscule compared to the volume of claims submitted with the single-use drugs.  This created a loss for CMS because the Infrastructure Investment and Jobs Act amended section 1847A requires manufacturers to provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use package drugs. Whenever the waste was not reported, CMS missed out on the rebate.

What’s the change

A more stringent billing for waste regulation mandate for single-use drugs was scheduled to go into effect on July 1, 2023; however, last-minute changes have simplified the process and made it optional to use waste-related modifiers. These changes came after the National Home Infusion Association (NHIA) advocated on behalf of members, outlining to CMS the significant administrative burden this would create for providers. So now the mandate to report to Medicare Part B for any single-use drug, whether there is waste or not, is voluntary.

Here’s what you need to know:

  • A single-use vial that had no waste will be billed in its entirety on one line and can either be billed with no modifier or a JZ modifier*.
  • A single-use drug that was only partially used will be billed on two lines as follows:
    • The first line with the number of units given to the patient is billed with no waste-related modifier*.
    • The second line with the amount of drug wasted is billed with a JW modifier* if you wish to get compensated for the portion wasted.
  • The total compensation will be the same in either scenario provided you are billing separately for the portion wasted. In no circumstances should the provider bill for the full vial if the full vial was not used to make the patient’s dose(s).

*Each line above may have other applicable modifiers outside of the waste-related modifiers such as KX (to confirm you have a signed order on file) or JB (if the drug is given subcutaneously), etc.

Why you need to comply

Notification on June 15th from CMS states that the use of the JW or JZ modifiers are now optional versus mandatory.  While you may put using the JZ (for no waste) modifier on hold, I strongly suggest you evaluate how you are capturing waste in your billing process and that you are billing for waste from a single-use vial that must be discarded if not used.  If not, it could mean throwing out hundreds of dollars with the discarded drugs. 

What else

Some important points of reference and reminders:

  • There are a few exceptions to the rules when there is waste for single-use drugs:
    • First, the waste modifier policy doesn’t apply for drugs that are not separately payable.
    • Second, CMS doesn’t allow fractional billing units, so the JW modifier shouldn’t be used when the dose of the drug administered is less than the billing unit. In this situation, the billing provider or supplier would report administering the full billing unit along with the JZ modifier.
      • For example:  You used a single-use vial of drug to make a 750 mg dose.  The drug came in 100 mg vials.  The HCPCPS code is 100 mg/unit.  You would bill for 8-100 mg units with the JZ modifier as you can’t bill for 7.5 units. 
  • The requirement to bill for waste is only applicable for Medicare Part B claims right now because the Infrastructure Investment and Jobs Act specifies Medicare Part B only. However, coverage for Medicare replacement plans fall under the guise of traditional Medicare, so it’s possible that a Medicare replacement plan may implement the same requirement.
  • Although not otherwise classified (NOC) codes don’t specifically identify a drug, for consistency with the policy, the JW modifier should be reported for the portion of drug wasted from single-use containers billed with a NOC code (for example: J3490, J3590).
  • The JW modifier must not be used to report discarded amounts of overfill. Since January 1, 2011, CMS regulations have expressly prohibited billing for overfill, which is any amount of drug greater than the amount identified on the package or label.

If you have any additional questions on this process or challenges related to home infusion billing and collections, Brightree has a team of experts that provide home infusion reimbursement services to take the complexity and burden off your shoulders. Get more information at https://www.brightree.com/brightree-revenue-cycle-management-rcm/

Jeanne Lugli

Jeanne Lugli, Sr. Director of Operations for Pharmacy and Infusion, Brightree

Jeanne has more than 39 years of experience in home infusion revenue cycle management, including building a successful home infusion reimbursement and consulting business, and was awarded an inaugural NHIA Fellow position (FNHIA). She’s an expert in the areas of intake, billing and collections, operations, and reimbursement management and is widely known throughout the home and specialty infusion industry for her expertise, thoroughness, and integrity. As a result, Jeanne is a fixture at NHIA conference podiums and the Payer Advocacy and Relations Committee and has authored several articles in INFUSION magazine.

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