Q&A: What Do We Need to Document for Wasted Drugs?

July 27, 2016
Medicare Web

Q: When our pharmacy mixes medications for infusion, they sometimes have to waste a part of the vial that was opened. They log this in the pharmacy log, which they keep in the department. We have been billing the full amount of the drug that was in the vial and have had no issues with getting paid. Our pharmacist came from a regional meeting and told us that this is going to change. 

A: CMS has a long-standing policy of reimbursing providers for the amount of a single-use vial or single-use package that is wasted because it is not needed for one patient, and there is not another patient scheduled for whom the medication can be used. CMS has also encouraged providers to “care for and administer to patients in such a way that they can use drugs or biologicals most efficiently, in a clinically appropriate manner.”

CMS created modifier -JW (drug amount discarded, not administered to any patient) in 2010 for the purpose of reflecting the amounts discarded from single use vials/packages. Since that time, the use of the modifier was left to each MAC’s discretion and determination. Medicare does not reimburse for any amount wasted from a multi-use vial/package. 

In recent months, there have been several articles/reports that express concern about the amount of expensive medications (e.g., chemotherapy drugs, monoclonal antibodies or other biologicals) that are being wasted. One estimate is as high as $3 billion dollars a year across payers. The concern is not related just to provider scheduling; the larger concern is the size of single-use vials that are available in the United States vs. the sizes that are available in other countries from the same drug/biological manufacturers.

At the present time, there is no consistent claims data for CMS or other payers to know exactly how much money is being reimbursed for wasted medications/biologicals. CMS issued Transmittal 3538 (CR 9603), which updates the guideline in the Medicare Claims Processing Manual, Chapter 17, section 40.

Beginning January 1, 2017, CMS is making the reporting of modifier -JW mandatory for all providers for reporting the amount of a single-use vial that was wasted and for which reimbursement is being requested. Reporting the -JW modifier will no longer be at the discretion/determination of the MACs.

In addition, the amount of the drug/biological that is wasted must be documented in the patient’s medical record. Even though the pharmacy must document the wasted amount on the pharmacy log to meet the pharmacy board guidelines, in order to report the amount of the drug/biological on the claim and receive reimbursement, the amount must be documented in the medical record.

Transmittal 3538 states: 

Effective January 1, 2017, claims for discarded drug or biological amount not administered to any patient, shall be submitted using the -JW modifier. Also, effective January 1, 2017, providers must document the discarded drugs or biologicals in patient's medical record. This CR updates the Section 40 - Discarded Drugs and Biologicals of Chapter 17 of the Claims Processing Manual 100-04.

Editor’s note: Denise Williams, RN, CPC-H, senior vice president of revenue integrity services at Revant Solutions, in Fort Lauderdale, Florida, answered this question.

 

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