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New Modifier Required on all Single Use Drugs

Coding


New Modifier Required on all Single Use Drugs

Date Posted: Friday, March 03, 2023

 

Attention providers and suppliers, there is a new modifier in town! Starting July 1, 2023, Modifier JZ - Zero drug wasted, will be required on all claims to attest there is no drug left over, if applicable. Meaning there is zero drug amount discarded, and there was no leftover drug administered to any patient.  This article will cover when the new modifier is reported and when it is not reported, how to report it on a claim, and other important information you need to know.

There is another modifier we should be familiar with, the JW modifier; this modifier has been required on claims since January 1, 2017, if applicable.  The JW modifier is required to be reported on claims if there was a drug amount that was discarded when using a single-dose container.  In addition, using the JW modifier indicates the drug is eligible for payment under the discarded drug policy. Therefore, CMS provides payment for the administered dose and the discarded amount. Using the JW modifier qualifies for separate reimbursement to providers and suppliers. 

It will be required to have one of the modifiers, JZ or JW, on a claim for a single dose, never both. Documentation requires the records to clearly document the portion of the drug administered, wasted, and left over in the medical record.

Reasoning for the New JZ Modifier

According to CMS, "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, 2023."

When Is the JW and JZ Modifier Not Used?

If the drug is not payable in the setting, then the modifiers are not required. For example, Rural Health Clinic (RHC) and 
Federally Qualified Health Centers (FQHC) are paid under a different payment system using a packaged rate. If a drug is packaged, it is not separately reportable as it is included in the payment. If a drug is assigned the status indicator N1, it is a "Packaged service/item; no separate payment made."

The modifiers are not required when billing vaccines; these are excluded as vaccines are often billed by mass immunizers using roster billing, which is not set up to accommodate modifiers. 

The JW modifier is only used for the amount identified on the package, never if there is an overfilled drug.

Less than the billing unit should not be reported using these modifiers; if there is anything less than a full unit, the provider reports the full unit was administered using the JZ Modifier.  

When Are the Modifiers Used?
 
The modifiers will apply to all separately payable drugs assigned a payment indicator of "K2 - Drugs and biologicals," paid separately when provided integral to a surgical procedure on the ASC list; payment based on OPPS rate. With the exceptions listed above, all claims reporting single-dose container drugs, including Not Otherwise Classified (NOC) codes, must be reported and documented in the patient's records.  If a drug has a status indicator of "G - pass-through biologicals" or "K - Non-pass-through drugs and non-implantable biologicals, including therapeutic radiopharmaceuticals." 

How Are These Reported on a Claim?

When reporting the drug used on a claim, you will report two line items.

First line item:

One line will show the HCPCS or payment code with no modifier showing the number of units administered. 

Second line item:

On a second line report, the same HCPCS code or payment code using the appropriate modifier:

  • Using the JW modifier and the number of units not used in the units field; or
  • Using the JZ modifier attesting there were no discarded or leftover amounts. 

Important Note: Be sure to read the complete update; this article is informational only and does not include all circumstances. 

Start Reporting the New Modifier Now

You can start using the new modifier any time after the effective date of January 1, 2023, and I suggest starting now to avoid problems later, such as audits.  

CMS is implementing the JZ modifier in phases:

  • Providers and suppliers may report the JZ modifier as early as January 1, 2023
  • The JZ modifier is required on applicable claims beginning July 1, 2023

Review 

Timelines

  • After January 1, 2017, claims are subject to review if the JW modifier is used incorrectly.
  • After July 1, 2023, claims not reporting the JW or JZ modifier are subject to audits. 
  • On or after October 1, 2023, claims may be returned as unable to process.

When JW and JZ are not used:

  • Status indicator N1
  • Vaccines
  • Overfilled drugs
  • Less than a full unit

When to report JW and JZ modifiers:

  • Payment indicator of K2
  • Not Otherwise Classified (NOC) codes
  • Status indicator of "G" pass-through drugs
  • Status indicator of "K" non-pass-through drugs

Reporting on a Claim

Use two line items, one for the drug code with units used and one with the drug code, the modifier attached, and applicable units.

Reminder

As mentioned above, this article is informational only, and it is important to review this information released by the Medicare program.   

Christine Woolstenhulme, QMC QCC CMCS CPC CMRS, is a certified coder and medical biller currently employed with Find-A-Code. Christine brings over 30 years of insight, business knowledge, and innovation to the healthcare industry. Establishing a successful Medical Billing Company from 1994 to 2015, during this time, Christine has had the opportunity to learn all aspects of revenue cycle management while working with independent practitioners and in clinic settings. Christine was a VAR for AltaPoint EHR software sales, along with management positions and medical practice consulting. She focuses on understanding the complete patient engagement cycle and developing efficient processes to coordinate teams, ensuring best practice standards in healthcare, and working with payers on coding and interpreting ACA policies according to state benchmarks and insurance filings and implementing company procedures and policies to coordinate teams and payer benefits.


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