Drugs represent about 14% of total US health care expenditures. Claims for reimbursement, particularly for costly drugs, deserve close attention and contain crucial elements, such as a CPT code for the injection procedure, a laterality modifier, the HCPCS code for the drug, the JW or JZ modifier for a single-use vial, the NDC number for the drug, and a diagnosis that is compatible with local coverage policy. Requests for additional documentation from payors are common, so precise, complete chart documentation of the injection procedure is crucial.
Q. What’s the difference between single-use vs multidose vials?
A. Injectable drug vials are categorized as single-use or multidose, a distinction crucial for patient safety and proper billing. Single-dose vials are intended for 1 patient and 1 procedure only. They typically lack an antimicrobial preservative, so they should not be used for more than 1 patient or stored for repeated use at a later date. On the other hand, multidose vials contain an antimicrobial preservative that allows them to be used for more than 1 patient when an aseptic technique is followed. Many drugs used in ophthalmology are provided in single-dose vials. The Centers for Disease Control and Prevention (CDC) provides guidelines to ensure safe use and prevent patient harm from improper use.1
Q. When are the JW/JZ modifiers used?
A. A single-dose vial usually contains only enough drug for the intended purpose described in the directions for use of the product. Any residual drug in the dead space of the syringe is considered trivial and must be discarded after the administration of the injection. Sometimes, however, a drug’s dose can be so variable that the manufacturer provides a sufficient quantity in the single-use vial to accommodate a wide range of amounts. In these cases, there can be a significant amount wasted.
CMS receives rebates from manufacturers for wasted drug that it paid for, so it requires providers to report the amount administered and the amount discarded on 2 separate lines of a claim form. The JW modifier is used to denote wastage.2 Modifier JZ applies when less than 1 unit of drug is discarded. Because a multi-use vial permits drug to be administered to more than 1 patient, waste is reduced significantly and payors reimburse only for what was used, rendering JW or JZ modifiers inapplicable.
Xeomin (Merz Pharma), Botox (AbbVie), and Dysport (Galderma) are different forms of botulinum toxin that are provided in various size single-use vials containing hundreds of units. In most cases, there is wasted medication that must be reported with JW modifier. Additionally, even though the physician administers a series of injections around the eye, CMS instructs that a claim show just 1 injection per body side, regardless of the number of needle entries.3
Q. Are there drugs that cannot be billed?
A. If the physician incurs no expense for the drug, as in the case of a sample or specialty pharmacy provision, no charge should be submitted for payment of the supply. If the drug is intended to be self administered, it cannot be billed when administered by a physician.4
Q. How do I bill for compounded drugs?
A. Compounding is the process of mixing, combining, or changing the ingredients of drugs to make a medication that is tailored to an individual patient’s needs. Compounded drugs are custom made and not FDA approved.
HCPCS assigns J7999 for any compounded drug; however, payors sometimes request that other miscellaneous HCPCS codes be used instead, J3490 or J3590.5 When billing for compounded medications, provide a detailed description of the medication and its dosage on the claim in box 19 of the CMS-1500 form.
Q. What is the National Drug Code?
A. The National Drug Code (NDC) is a unique 10-digit, 3-segment number assigned to each medication. For Medicare billing, an 11-digit code is required, so the NDC is frequently expanded by inserting a leading zero (Figure 1). The NDC is found on the vial or in the NDC directory at FDA.gov.6
Figure 1. An example of how to fill out the paper CMS-1500 claim form: in the shaded portion of line-item field 24A-24G, enter National Drug Code (NDC) qualifier N4, immediately followed by the NDC (expanded with a leading zero to 11 digits if necessary). Enter a space for separation, then enter the appropriate qualifier for the correct dispensing NDC unit of measure (eg, UN for preprepared unit, ML for mililiter, GR for gram, or F2 for international unit). Image courtesy Blue Cross Blue Shield of Illinois.
Q. What chart documentation is recommended?
A. Due to high utilization and substantial expenditures, claims for reimbursement of drugs are frequently scrutinized. Requests for additional documentation are common, and so are postpayment audits. Reviewers look closely at chart documentation for evidence that comports with local coverage policy, including:
- Indication for the injection;
- Time interval between injections;
- Identification of the dose administered;
- Description of the route of administration; and
- Explicit description of any discarded or wasted amount of drug.
The operative report for the injection should contain this information and must be readily available if requested. Cryptic or ambiguous notes that lack specificity are potentially problematic.
Q. How is the drug payment rate determined?
A. CMS uses a standardized method for determining drug payment rates under Medicare Part B primarily based on the Average Sales Price (ASP).7 The ASP is a data-driven figure, calculated from the drug manufacturer’s sales data, which ensures that the payment rate reflects market reality. This pricing mechanism is designed to satisfy the need for fair reimbursement to providers while also managing the overall cost to the Medicare program. Health care providers can refer to the CMS ASP pricing files for the most current information.
If there is wasted drug during a procedure, that is identified on a separate line on the CMS claim form with modifier JW and reimbursed at the same payment rate (Figure 2).
Figure 2. Sample claim for single-use vial with wasted drug.
Q. Should the clinic maintain a drug inventory log?
A. A medication inventory log supports best practices in healthcare management.8 The inclusion of invoice numbers, purchase dates, drug names, dosages, lot numbers, expiration dates, patient names, and service dates is important for accountability. Comparing the inventory log to billing records helps identify inconsistencies that may indicate dispensing, billing, or inventory management errors. For those utilizing computerized systems, generating detailed reports is a valuable tool that simplifies this process. A proactive approach serves as a preventive measure against potential medication errors and financial discrepancies. RP
References
1. Center for Disease Control and Prevention. Questions about single-dose/single-vials. June 20, 2019. Accessed August 7, 2024. https://www.cdc.gov/injectionsafety/providers/provider_faqs_singlevials.html
2. Centers for Medicare and Medicaid Services. Medicare program discarded drugs and biologicals — JW modifier and JZ modifier policy frequently asked questions. November 2022. Accessed August 7, 2024. https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/jw-modifier-faqs.pdf
3. Centers for Medicare and Medicaid Services. Botulinum toxins. April 3, 2021. Accessed August 7, 2024. https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?LCDId=33646
4. Centers for Medicare and Medicaid Services. Billing and coding guidelines for drugs and biologics (non-chemotherapy). April 2018. Accessed August 7, 2024. https://downloads.cms.gov/medicare-coverage-database/lcd_attachments/34741_55/BCG_L34741.pdf
5. Centers for Medicare and Medicaid Services. Billing and coding: approved drugs and biologicals; includes cancer chemotherapeutic agents. November 2, 2023. Accessed August 7, 2024. https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleId=53049
6. US Food and Drug Administration. National Drug Code Directory. Accessed August 7, 2024. https://dps.fda.gov/ndc
7. Centers for Medicare and Medicaid Services. ASP pricing files. March 22, 2024. Accessed August 7, 2024. https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files
8. American Academy of Ophthalmology. The profitable retina practice: medication inventory management. 2019. Accessed August 7, 2024. https://www.aao.org/Assets/e7689602-5fbd-4c77-b1b6-6e1db0009e0c/637115818701500000/medication-inventory-management-pdf
