Oncology & Hematology Coding Alert

Modifier JW could be your enemy instead of your friend for these claims.

Oncology practices may know their CPT coding rules backwards and forwards, but that doesn’t mean you’ve mastered coding unless you fully understand the applicable HCPCS modifiers just as well — and Medicare RACs seem to think many practices could use some work in this department.

Background: Recovery audit contractors (RACs) review Medicare claims for errors and collect a contingency fee based on the amount they recover. Much like MACs, there are different RAC contractors for the various regions in the country, and each one publishes the open issues that it is in the process of auditing.

One such issue on the plate for two different RAC regions in 2017 involves a common chemotherapy drug, Trastuzumab (brand name Herceptin), which is billed with J9355 (Injection, trastuzumab, 10 mg). Both Region two (RAC contractor Cotiviti) and Region one (RAC contractor Performant Recovery) have recently announced that they’ll be reviewing two separate issues involving this drug, as follows:

• Multi-Dose Vial Wastage Billed with JW Modifier: “Multi-use vials are not subject to payment for discarded amounts of drug or biological,” both Performant and Cotiviti say in their listing details for this audit. “Claim lines billed with modifier JW indicate billing of medication wastage.”
• Multi-Dose Vial Wastage, Dose vs. Units Billed: “Documentation will be reviewed to determine if the billed amount of trastuzumab (Herceptin) meets Medicare coverage criteria and applicable coding guidelines,” the RACs both state.

Here’s How to Bill These Drugs

You should report units of Herceptin based on the amount administered. You should not report wasted amounts from the 440 mg multi-use vial, according to Medicare rules.

The examples below reveal how reporting incorrect units can lead to costly refund issues.

Example 1: Your staff administers 100 mg of Herceptin to a patient from a 440 mg multi-use vial. The appropriate code for Herceptin is J9355 (Injection, trastuzumab, 10 mg). Therefore, for 100 mg, you should report 10 units of J9355. Each unit of J9355 represents 10 mg. If you divide the 100 mg administered by the 10 mg in the definition, the solution is 10 units.

Example 2:  The practice administers 85 mg of Herceptin from a 440 mg multi-use vial. In this case, you can report nine units, since you can round up the 8.5 units to nine.

Example 3: The staff administers 130 mg of Herceptin from a 440 mg multi-use vial. In this case, you’ll report 13 units of J9355 to claim 130 mg administered.

Unfortunately, in the past, auditors have discovered similar examples where practices like those in these examples reported 44 units to represent the complete 440 mg multi-use vial. This would result in a vast overpayment, since Medicare pays about $94 for each unit of J9355. A practice reporting 10 units, as in Example 1 above, would collect $940, but a practice billing for all 44 units in the vial would inappropriately collect $4,136 — an overpayment of $3,196.

Don’t Expect Modifier JW to Save You

Some other practices append modifier JW (Drug amount discarded/not administered to any patient) to the wasted portion of the drug. For instance, in Example 1 above, a practice might report 10 units on line one, followed by 34 units of J9355 with modifier JW appended on a second line item to indicate that 10 units were administered and 34 units were discarded. However, this is incorrect coding.

Here’s why: “Multi-use vials are not subject to payment for discarded amounts of drug or biological,” according to Chapter 17, Section 40 of the Medicare Claims Processing Manual, which the agency updated on Jan. 1, 2017. Herceptin comes in 440 mg multi-use vials. Because discarded amounts of multi-use vials aren’t subject to Medicare payment, you should report only the amounts actually administered to patients.

The confusion probably stems from the fact that Medicare will pay for discarded amounts of single-use vials. CMS states in the Claims Processing Manual, “When a physician, hospital or other provider or supplier must discard the remainder of a single use vial or other single use package after administering a dose/quantity of the drug or biological to a Medicare patient, the program provides payment for the amount of drug or biological discarded as well as the dose administered, up to the amount of the drug or biological as indicated on the vial or package label.”

Therefore, to properly report any drug or biological, you need to distinguish multi-use vials (for which waste is not reportable to Medicare) from single-use vials (for which waste is reportable to Medicare, typically with JW appended to the wasted portion).

Resource: To read the details of the two RACs’ open issues, visit https://www.dcsrac.com/IssuesUnderReview.aspx and http://www.cotiviti.com/healthcare/who-we-serve/cms-approved-issues.