Discarded Drugs and Biologicals

Policy No: 108
Originally Created: 10/01/2014
Section: Medicine
Last Reviewed: 09/01/2019
Last Revised: 10/01/2019
Approved: 10/03/2019
Effective Date: 11/01/2019

This policy applies to all physicians, other health care professionals, hospitals and other facilities.

Definitions

Discarded Drugs and Biologicals
Drugs and biologicals (e.g., infusion bags, vials, powders, syringes, etc.) that are not administered to the patient due to but not limited to compounding, spillage, breakage, unused, expired, etc.

Single-Dose Vial
A vial containing a single dose of a parenteral drug product.

Single-Use Vial
A vial where a single dose of a parenteral drug product can be removed, and then the vial and its remaining contents must be disposed.

Multi-Use Vial
A vial containing more than one dose of parenteral drug product.

Competitive Acquisition Program (CAP) drugs
A list of drugs and biologicals issued by Centers for Medicare & Medicaid Services (CMS) from CAP approved vendor. The list is mostly injectable and infused Part B drugs most commonly provided by physicians "incident to" an office.

Current Procedural Terminology (CPT®) Modifier JW
Indicates drug amount discarded or not administered to a patient.

Medication Administration Record (MAR or eMAR for electronic version)
The report that serves as a legal record of the drugs administered to a patient at a facility by a health care professional.

National Drug Code (NDC)
A unique 11-digit, 3-segment number assigned to each medication listed under Section 510 of the U.S. Federal Food, Drug and Cosmetic Act. The number identifies the labeler or vendor, product, and trade package size.

Route of Administration
A path by which a drug is given to the patient. Examples are, but are not limited to, nasal, intramuscular, subcutaneous, intravenous, inhalation and transdermal.

Note: Please refer to Fac 109 for Reimbursement of Intravenous (IV) Solutions, Premixed IV Medications and Total Parenteral Nutrition (TPN) for Facilities and Fac 104 for Drug and Radiopharmaceuticals Reimbursed Under Medical Coverage

Policy statement

Single-Use Vial or Single-Dose Packaging
Single-use or single-dose vial or packaging is intended for use by a single patient.

Drugs or biologicals discarded, wasted or not administered to a patient from a single-use vial or single-dose packaging are eligible for reimbursement. Reimbursement will not be provided for drugs or biologicals including products related to cellular and/or gene therapies that have not been administered to the patient at all, even if specifically, and/or specially prepared for the patient or in instances where product could not be administered due to a missed appointment.

Reimbursement will only be provided for wastage occurring with the use of the smallest dose (vial) or combination of vials available for purchase from the manufacturer(s) that could provide the ordered dose for the patient.
Medications and medication waste must be recorded in the appropriate patient clinical record to be eligible for reimbursement. Medications not documented in an appropriate patient clinical record are not reimbursable.

Reimbursement for medications that are separately reimbursable, regardless of route of administration, is governed by this policy. Note that medications are not separately reimbursable in certain settings, including but not limited to ambulatory surgical centers.

The appropriate patient clinical record for a patient admitted as an inpatient is the MAR or eMAR. Notwithstanding the above, drugs that are administered as part of a procedure are not separately reimbursable.

Anesthesia medications documented in an anesthesia record which denotes the anesthesia care given, the drugs and fluids administered and the patient's responses to the anesthesia care are eligible for reimbursement. Medications administered in the emergency department which are documented in the patient clinical emergency department record are eligible for reimbursement. In order for anesthesia or emergency department medications to be eligible for reimbursement, all of the following must be documented in the anesthesia or emergency department record: name of the medication, route, amounts dispensed, amounts wasted, concentrations, date and time of administration.

Documentation in the patient's record must include name of drug, date administered, actual dose administered to the patient, actual amount wasted or discarded and total amount the vial is labeled to contain.

Multi-Use Vial
Multi-Use Vials are intended to be used on multiple patients. Drugs or biologicals discarded, wasted or not administered to a patient from a multi-use vial are not eligible for reimbursement.

Modifier JW for professional and outpatient facility claims
Effective 1/1/2017, the Healthcare Common Procedure Coding System (HCPCS) code and/or the revenue code for the drug/biological administered to the patient must be reported on one claim line and the amount discarded/wasted must be reported on a separate line with the modifier JW on the same claim.

Modifier JW applies to Part B drug and biologicals claims except for CAP drug and biologicals.

Complete list of CAP drugs (PDF).

The portion of the drug/biological not administered is considered to be discarded and may be eligible for separate reimbursement.

The use of modifier JW is not appropriate when the actual dose of the drug or biological is less than the unit billed. For example, one billing unit for a drug is equals to 20 mg of a drug in a single use vial. A 15 mg dose is administered to the patient and 5 mg of the remaining drug is discarded. Billing for one unit on separate claim line with modifier JW for the 5 mg of discarded drug would result in overpayment.

Our health plan requires the NDC number, NDC units, and units of measurement to be placed on professional and/or outpatient facility claims to determine the standard reimbursement amounts for therapeutic and diagnostic drugs and biological products reimbursed under medical coverage.

References

U.S. Food and Drug Administration, Package Type

Centers for Medicare & Medicaid Services (CMS), Claims Processing Manual, Chapter 17, Sections 40 and 100.2.9

CMS Manual System, Pub 100-04 Medicare Claims Processing, Transmittal 3538, Change Request 9603 (Revised June 9, 2016)

Centers for Medicare & Medicaid Services (CMS), Claims Processing Manual, Chapter 4 - Part B Hospital (Including Inpatient Hospital Part B and OPPS). Section 10.4 (Note: In the absence of inpatient guidelines, outpatient guidance is followed)

Centers for Medicare & Medicaid Services (CMS), Medicare Part B Competitive Acquisition Program (CAP) 2008 Drug List

Disclaimer

Your use of this Reimbursement Policy constitutes your agreement to be bound by and comply with the terms and conditions of the Reimbursement Policy Disclaimer.