CMS publishes FAQ on modifiers -JW and -JZ

CMS recently published an FAQ to address the products, providers, and billing practices associated with modifiers -JW and -JZ. These modifiers are used to report discarded amounts for drugs separately payable under Medicare Part B that are supplied in single-dose or single-use containers.

The definitions for both modifiers are as follows:

• -JW: Drug amount discarded/not administered to any patient
• -JZ: Zero drug amount discarded/not administered to any patient

CMS established modifier -JZ after observing low compliance with modifier -JW, according to the FAQ. The agency later codified modifier -JZ in the 2023 Medicare Physician Fee Schedule final rule and made it available to report effective January 1, although it will not be required until July 1.

Noncompliant claims may be subject to provider audits. Claims for drugs from single-dose containers without modifier -JW or -JZ on or after October 1 may be returned.

CMS specified that these modifiers apply to separately payable drugs assigned status indicators G and K under the Outpatient Prospective Payment System, as well as those assigned payment indicator K2 in the Ambulatory Surgical Center Payment System. The requirements also apply to 340B covered entities and critical access hospitals.

However, these modifiers do not apply to drugs administered in rural health clinics or federally qualified health centers, and they are not intended for claims billed under the Inpatient Prospective Payment System, according to the FAQ.

Revenue integrity professionals should review the FAQ to ensure their organization is accurately billing for discarded drugs and biologicals. Understand which products and providers are relevant to these drug waste modifiers, as well as CMS’ timeline for implementation.

Editor’s note: Find more NAHRI resources on modifiers -JW and -JZ here.