Oncology & Hematology Coding Alert

Question: I keep hearing there is a 10 percent threshold on the percentage of drug waste, but I don’t see that in the CMS manual. Is there any guidance from CMS on this?

AAPC Forum Participant

Answer: The Centers for Medicare & Medicaid Services (CMS) does not define drug waste in percentages. Instead, they simply define wastage as “the labeled amount on the single-dose container [or containers if more than one is required] minus the dose [the dose being the prescribed amount of drug administered to the patient]” (www.cms.gov/Regulations-and-Guidance/Guidance/ Manuals/downloads/clm104c17.pdf).

The Medicare Claims Processing Manual goes on to provide the following example of wastage and how you should bill it. A provider administers 95 units of a drug from a single-dose vial that contains 100 units. In this situation, you would bill the 95-unit dose on one claim line and the 5 units discarded on a second claim line. To indicate wastage, you would append modifier JW (Drug amount discarded/not administered to any patient) to the second line. Documentation should clearly indicate the administered and discarded amounts of the drug. The total of those two figures must never exceed the totals on the labels of the packages from which they were withdrawn.

Remember: If the total dose of the drug administered to the patient is less than the billing unit, CMS does not permit you to use the JW modifier to the discarded amount “because it would result in overpayment.” In this case, you should use modifier JZ (Zero drug amount discarded/not administered to any patient) “for dates of service beginning July 1, 2023,” according to the most current version of the CMS manual. Additionally, you should also append the JZ modifier when the provider uses the entire single-dose vial.