In wake of the June 7 public announcement of the JW modifier implementation delay, the official statement was released today in Transmittal 3538 confirming that the postponement will be, in fact, Jan., 2017.

With this manual update, effective Jan. 1, 2017, physicians and hospitals will be required to use the JW modifier to identify discarded waste when processing Part B claims for drugs and biologics, except Competitive Acquisition Program (CAP) drugs and biologics.

Hospitals and physicians, however, should be aware that this delay is at the Centers for Medicare & Medicaid Services (CMS) level.  Potential remains at the regional contractor level for implementation of the July 1 requirement.  Transmittal 3538 clearly states that as of Jan. 1, 2017, that CMS is removing the contractors’ discretion with determinations regarding JW modifier and will move forward with the previously announced requirements.

As a reminder, the current policy for appropriate use of the JW modifier is published in the Medicare Claims Processing Manual (100-04), chapter 17, section 40, which was last updated in 2010.

The manual instruction gives contractors the discretion to determine whether to require the JW modifier for Part B claims for discarded waste from single-use vials, and the specific details regarding how the discarded drug or biologic information should be documented. In order to more effectively identify and monitor billing and payment for discarded drugs and biologics, CMS is revising this policy effective January 1 to require the uniform use of the JW modifier.

Other considerations that will require clarification from CMS is which drug HCPCS will require use of the JW modifier and where there may be exceptions.  Rumors abound as to whether the upcoming changes will be applicable in the outpatient prospective payment system (OPPS) hospital only for payable drugs assigned to the status indicator of K or G – but – not applicable to packaged drugs assigned to status indicator N.  Current policy does not provide exclusion other than when billing for CAP drugs and biologics. 

Hospitals are reminded that this requirement for appending modifier JW is applicable in the hospital outpatient setting and physician offices. This modifier is not required on inpatient claims.

About the Author

Robin Zweifel is the senior vice president of revenue capture services for Panacea Healthcare Solutions Inc. Robin’s areas of expertise include clinical laboratory and chargemaster management, as well as infusion and pharmacy regulatory compliance.

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