Oncology & Hematology Coding Alert

And stay alert to these expert billing tips and examples.

There are a lot of moving parts to billing for drug use and waste. Fortunately, in her 2024 HEALTHCON session, “Don’t Gamble When Coding Drug Waste,” Stephanie A. Thebarge, CPC, CPCO, CPMA, CPPM, CPB, CEMC, CHONC, compliance manager at New England Cancer Specialists in Scarborough, Maine, broke them all down to four convenient, bite-sized chunks of information.

Here are the four most problematic areas to understand before coding a claim that contains drugs.

1. Understand How to Report National Drug Codes

Once a drug has been approved by the U.S. Food and Drug Administration (FDA), it is entered into the National Drug Code (NDC) directory. The directory is updated daily, and can be found at https://www.accessdata.fda.gov/scripts/cder/ndc/index.cfm.

Each drug receives a unique, 11-digit, three-segment numeric identifier that identifies the drug manufacturer or distributor; the product and its specific strength; dosage formulation; and the package size and type.

This can present a billing problem, as the Centers for Medicare & Medicaid Services (CMS) instructs the NDC must be specific to the medication used and documented in a very specific format, which can differ from the NDC listed in the drug packaging.

Billing tip: Thebarge cautioned the number appearing on the drug packaging may be less than 11 digits. In such cases, you must add a leading zero to the appropriate segment to create a 5-4-2 configuration for billing purposes. This can be confusing, but Thebarge offers advice in this handy clip-and-save chart:

2. Understand Code Description vs. Vial Size

The next problem plaguing drug claims involves frequent discrepancies between drug vial sizes and the billing units provided in the corresponding HCPCS Level II code descriptors.

Thebarge gave the example of Nplate/Romiplostim, a platelet booster given to patients suffering from immune thrombocytopenia. The drug’s HCPCS Level II code is J2796 (Injection, romiplostim, 10 micrograms), meaning that the billing unit for the drug is 10 mcg. However, the drug is only available in vial sizes of 125, 250, and 500 mcg.

Billing tip: The problem here is easy to see. If your provider administers an entir e 125 mcg vial, how do you account for the half billing unit when CMS does not allow fractional billing units?

The answer, according to the CMS JW Modifier Billing Guidelines, is to “round up to the nearest whole number in order to express the number as a multiple” (>https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleid=55932&ver=12&). But remember: The guidelines specify not to count the fractional amount not administered to the patient as discarded. Within the same guidelines, you find the rule that “the total number of discarded units reported should not include amounts of the drug also included on the administered line due to the rounding up of units.”

So, in our Nplate/Romiplostim example, if a provider administers an entire vial of the drug, you should bill for 13 units of J2796 and not document any amount of wastage.

3. Understand Drug-Related Modifiers

By now, you are probably familiar with how to appropriately append modifier JW (Drug amount discarded/not administered to any patient), and the more recently released drug-use modifier related to it: JZ (Zero drug amount discarded/not administered to any patient).

But in her presentation, Thebarge also profiled several other, less-familiar drug-related modifiers that may come into play on your drug claims:

• 76 (Repeat procedure or service by same physician or other qualified health care professional)
• KO (Single drug unit dose formulation)
• KP (First drug of a multiple drug unit dose formulation
• KQ (Second or subsequent drug of a multiple drug unit dose formulation)
• TB (Drug or biological acquired with 340b drug pricing program discount, reported for informational purposes for select entities)

Billing tip: The problematic issue here is that different Medicare Administrative Contractors (MACs) want to see different modifiers on similar drug administration claims. For example, National Government Services (NGS) wants to see 76 when the same drug is entered on two different lines “indicating the same drug with a different vial size was used when submitting the same drug code with different NDC numbers,” while Palmetto GBA requires a KP modifier “when two or more drugs are combined and dispensed to the beneficiary in the same unit dose container” and “each drug is billed using its unit dose form code,” Thebarge explained. “But this is just for Medicare. Blue Cross, Cigna, and United Healthcare may have different policies. So, you have to know [your payer’s policy],” she cautioned.

4. Understand How and When to Bill for Drug Waste

Billing for waste is not permitted when the actual dose of the drug or biological administered is less than the billing unit. In this situation, you cannot bill for waste or use modifier JW.

Billing example: If the billing unit for a drug in a single dose vial is 10 mg, and the provider administers 7 mg of the drug to the patient, you should bill one unit of service on a single line of the claim. In this instance, you would not bill the discarded 3 mg on a second line with the JW modifier because the provider administered the drug in an increment smaller than the billing unit indicated in the HCPCS Level II code.

Billing for waste is permitted when:

1. The vial(s) is/are single use.
2. The units billed correspond to the smallest vial available for purchase “that could provide the appropriate dosage for the patient while minimizing wastage,” according to Thebarge.
3. The wastage is discarded and not used for another patient.

Billing example: Suppose your provider administered 570 mcg of Nplate/Romiplostim to a patient using one 125 mcg single-dose vial and one 500 mcg single-dose vial. As the billing unit for J2796 is 10 mcg, you would bill 57 units of the drug administered. However, since the total units of the drug recorded in the medical record as discarded will amount to 55 mcg, you will report 6 units per the CMS JW Modifier Billing Guidelines, rounding up to the nearest whole number HCPCS Level II code unit.

So your final billing for the drug — which you would place on two lines of the claim — would be:

• J2796 x 57
• J2796-JW x 6