Description:
There are circumstances in which unused drugs or biologicals must be discarded. In these cases, there is reimbursement for both the administered and discarded drug and biological if specific criteria are met, including tracking of the wastage.

Policy:
Billing for Discarded Drugs and Biologicals
As noted above, there is payment for discarded drugs or biologicals when certain criteria are met — specifically, reimbursement for discarded drugs or biologicals up to the dosage amount indicated on the vial or package label minus the administered dose(s) if:

• The units billed correspond with the smallest dose (vial) available for purchase from the manufacturer(s) that could provide the appropriate dose for the patient.
• The drug or biological is supplied in a single-use vial or single-use package.
• The drug or biological is initially administered to the patient to appropriately address the patient’s condition and any unused portion is discarded. A provider cannot bill for discarded drugs if none of the drug was initially administered to a patient (e.g., member misses an appointment).
• The amount wasted is recorded in the patient chart or a separate waste report log.
• The provider’s written policy and practice is to manage single-use drugs and biologicals and bill all payers in the same manner. 
• The amount billed as a discarded drug is not administered to another patient.

Modifier JW
Modifier JW is defined as a “drug or biological amount discarded/not administered to any patient.” Physicians, hospitals and other providers or suppliers may use modifier JW to indicate drug wastage for non-inpatient administered drugs.

Providers should report the drug amount administered on one line, and on a separate line report the amount of drug NOT administered (wasted) with modifier JW appended to the associated HCPCS code.

It should be noted that modifier JW is not used when the actual dose of the drug or biological administered is less than the billing unit defined in the HCPCS descriptor. For example, HCPSC J2175 descriptor states meperidine hydrochloride, per 100 mg. Therefore, one billing unit is equal to 100 mg. If 97 mg of J2175 is administered and 3 mg of J2175 is wasted, modifier JW should not be reported. This is because the amount administered, 97 mg, is less than the billing unit, which is 100 mg.

Billing Reminders for Drug Wastage
The following table summarizes the do’s and don’ts regarding billing for drug wastage.

This medical policy was developed through consideration of peer-reviewed medical literature generally recognized by the relevant medical community, U.S. FDA approval status, nationally accepted standards of medical practice and accepted standards of medical practice in this community, Blue Cross Blue Shield Association technology assessment program (TEC) and other non-affiliated technology evaluation centers, reference to federal regulations, other plan medical policies and accredited national guidelines.

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