Wastage- Appropriate Billing Update

Educational Notification to Medicare Part A Providers of the Appropriate Billing of Drug Wastage

When processing all drugs except those provided under the CAP for drugs and biologicals, local contractors may require the use of the ‘JW’ Modifier to identify unused drugs or biologicals from single use vials or single use packages that are appropriately discarded.

The Centers for Medicare and Medicaid Services (CMS) outlines coverage of drug wastage in The Medicare Claims Processing Manual, PUB 100-4, Chapter 17, §40, by encouraging the most efficient use of medications to avoid drug wastage. In determining the appropriateness of billing for drug wastage, providers must consider the following:

  • Drug Packaging- Dose Options:
    • Are there multiple vial sizes and dose options or is the drug only packaged in an amount that exceeds the patient’s need?
    • What is shelf-life of the drug?
  • Patient Considerations:
    • What is the volume of patients receiving the medication?
    • What is the frequency of administration?
    • Is it practical to coordinate the schedules of patient’s receiving EPO to reduce the potential for drug wastage?

If after review of the above criteria, it is determined that the remainder of a vial or other package must be discarded after administering the drug to a Medicare patient, coverage is available for the drug discarded along with the amount administered. Documentation of drug wastage in the medical record is expected. The coverage of discarded drugs applies only to single-dose vials. Multi-dose vials are not subject to payment for discarded amounts of a drug.

EXAMPLE:
According to product information published by the Food and Drug Administration (FDA), Epoetin Alpha (EPO) is available in 1mL single-dose vials in multiple strengths, including 2000 units/mL, 3000 units/mL, 4000 units/mL, 10,000 units/mL and 40,000 units/mL. Multi-dose vials are also available in 10,000 units/mL - in 2 mL vials and 20,000 units/mL - in 1 mL vials. The shelf life of the multi-dose vial is 21 days. Because of the multiple dose options available for exact dose administration, the duration of stability of the multi-dose vial and the volume of patients receiving EPO, it was determined that claims should not be submitted with billing for wastage of EPO.

For additional information regarding the appropriate billing of drug wastage, please review The Medicare Claims Processing Manual, Globe to indicate www link. PUB 100-4, Chapter 17, §40.

This update is to a) direct providers to CMS’ Change Request (CR) 5923 Globe to indicate www link. which outlines the use of the ‘JW’ Modifier when processing all drugs except Competitive Acquisition Program (CAP) drugs; and b) remind providers regarding the coverage guideline for drug wastage.

This article was originally posted on the What’s New From Cahaba section of Cahaba’s website on October 31.2006.

Page last updated: March 26, 2008

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