Key Facts on Billing Drug Wastage

Key Billing Guidelines

• Ensure drug amounts administered to patients are accurately reported in terms of the dosage specified in the long descriptor for the applicable HCPCS codes. The short descriptors are limited to 28 characters, so they do not always capture the complete drug description.
• When submitting Medicare claims, units of service should be reported in multiples of the dosage included in the long HCPCS code descriptor. If the amount given is not a multiple of the number provided in the HCPCS code description, the provider should round up to the nearest whole multiple of the described dosage.
• If the provider must discard the remainder of a single-use vial or other package after administering the prescribed dosage of any given drug, Medicare may cover the amount of the drug discarded along with the amount administered. The following elements must be followed for the discarded amount to be covered. 
  1. The vial must be a single-use vial. Multi-use vials are not eligible for payment of any discarded drug amounts.
  2. The units billed should, where possible, correspond with the smallest dose (or vial) available for purchase from the manufacturer(s) that could provide the appropriate dose for the patient, while minimizing wastage.
  3. Any amount of drug billed as wastage from a single-dose vial must be discarded and may not be used for another patient, regardless of whether or not that other patient has Medicare.
• Providers should clearly document in the patient’s medical record the actual dose administered in addition to the exact amount wasted and the total amount the vial is labeled to contain. Detailed documentation will help practices justify billing of wasted drug in the event of a medical review.
• Medicare requires discarded drugs be reported with the JW modifier on a separate line. The total number of discarded units reported should not include amounts of the drug also included on the administered line due to rounding.
• Verify the amount of drug administered to the patient, then convert that amount to the proper units for billing.

To submit a waste-required claim, providers must submit two complete claim lines.

1. Claim line #1 should include: 

• HCPCS code for drug given;
• No modifier;
• Number of units given to the patient; and
• Calculated submitted price for ONLY the amount of drug given.

2. Claim line #2 should include:

• HCPCS code for drug wasted;
• JW modifier to indicate waste;
• Number of units wasted; and
• Calculated submitted price for ONLY the amount of drug wasted.

Billing Examples

Example #1