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CMS Issues Guidance on JW Modifier for Part B Drugs

The Centers for Medicare & Medicaid Services (CMS) has released a frequently asked questions (FAQ) document that provides additional details on the upcoming implementation of the required JW modifier and patient documentation policy for Medicare Part B drugs.

As previously noted by CMS, all providers billing Medicare for Part B drugs will be required to use a JW modifier for discarded drugs and biologicals. In addition to including the modifier on claims for a discarded drug, providers will have to indicate the amount of the discarded drug in the Medicare patient’s medical record. Before CMS’ announcement of this national policy, the decision to require use of this modifier was at the discretion of each provider’s regional Medicare Administrative Contractor.

In the FAQ document, CMS stated that the required modifier and patient documentation policy applies to separately payable Part B drugs, which are drugs administered incident to a physician service. Specifically, for drugs in single-dose or single-use packaging, the provider must include the JW modifier for the amount that remains after administrating a dose to be paid by Medicare.

The policy will mostly affect drugs administered in hospital outpatient departments and physician offices. The agency also noted that providers participating in the 340B Drug Pricing Program are not exempt from reporting the JW modifier.

CMS previously delayed the effective date after America’s Essential Hospitals and other stakeholders pushed back, arguing that providers needed more time to implement the modifier. The required modifier will take effect Jan. 1, 2017.

Contact Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Shahid Zaman is a senior policy analyst at America's Essential Hospitals.