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Policy No: 108

Originally Created: 10/01/2014

Section: Medicine

Last Reviewed: 07/01/2018

Last Revised: 07/01/2018

Approved: 07/19/2018

Effective Date:  03/01/2019

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


Discarded Drugs and Biologicals

Drugs and biologicals (e.g., infusion bags, vials, tablets, pills, 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 unit 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 can be disposed.

Multi-Use Vial

A vial containing more than one dose of parenteral drug product.

Oral Medication

Substance administered by mouth and is intended for use in diagnosis, cure, treatment, relief or prevention of a disease.

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.

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.

Policy statement

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.

This policy applies to all medications, including oral, parenteral and nebulized.

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.

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.

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.


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), Medicare Part B Competitive Acquisition Program (CAP) 2008 Drug List

Cross References

Drug and Radiopharmaceuticals Reimbursed Under Medical Coverage

Immunological Cellular Therapies and Gene Therapies

Reimbursement of Medication for Facilities


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.