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Drug Waste A Big Money Issue & How Providers Can Recoup The Cost of Unused Drugs on Medicare Part B Claims

drug wasteBy: Zach Simpson

In today’s practices there are many circumstances that call for the discarding of unused portion of drugs, and because of this drug waste can be a big-money issue for many practices. A perfect example is Botox which must be used within five hours of reconstitution, and if it is not used within that timeframe the only option a provider has is to discard the unused supply. What many providers may not be aware of though is that money can be recouped for drugs that have been discarded. The aim of this article is to educate providers that when applicable they may report drug waste in addition to the drug and its administration for Medicare Part B claim reimbursement.

How to Properly Report

For a provider to recoup and report the drug waste they must report the administered drug using the appropriate HCPCS Level II supply code, and the correct number of units in box24D of the CMS-1500 form. As a second line-item providers will want to enter all of the wasted units. It is very important to ensure that the provider documentation verifies the exact dosage of the drug injected, and the exact amount of and any reason for waste. Be aware If the provider did not assume the cost of the drug or administer the drug to the patient they may not bill for the unused portion.

In addition to listing the wasted units as a second line-item certain local contractors may require you to use the modifier JW Drug amount discarded/not administered to any patient to identify an unused drug from single-use vials or single-use packages that are appropriately discarded. Be aware that is inappropriate to use the modifier JW with an unlisted drug code. Therefore, it is imperative to be aware of the local contractor requirements, and appropriate drug codes.

Waste May Only Be Reported for The Last Patient

Providers must be aware that waste can only be reported on the last patient’s claim who was administered the drug prior to the discarding of the remaining amount. Meaning, if more than a single patient receives a drug from a single-use vial, include any waste on the claim for the last patient who received the drug.

For example: A provider schedules three Medicare patients to receive the same Botox injection on the same day from the same vial. The vial which the provider is administering the Medication from contains 100 units. The provider then administers 30 units to each patient. Due to the regulations and shelf life of the drug the remaining 10 units must be discarded to maintain compliance.

In this instance the provider would report the discarded amount by billing HCPCS Level II code J0585 x 30 for the first patient, and J0585 x 30 for the second patient. Lastly, on the third patient the provider would bill J0585 x 30 on one line for the amount used and J0585-JW x 10 on a second line for the waste.

Single-Use vs Multiple-Use

Be aware that Medicare will generally only reimburse for drugs supplied in single-use vials. The reason that Medicare will only reimburse for single-use vials is due to the fact that single-use vials typically must be used up within a shorter period of time than the multi-use vials that are produced with a longer shelf life. However, exceptions do exist which makes it imperative to consult a healthcare professional for further guidance.

In today’s market with the increasing cost of medications it is important to recoup the cost of drugs and biologicals for all practices whenever possible. By failing to claim discarded drugs many providers stand to flush their money down the drain along with the discarded drugs. Be aware though that as providers are looking for every avenue to increase reimbursements where they can compliantly, Medicare is also aware that they are at risk for paying for over-reported supplies. Therefore, it is imperative that all providers understand how to properly bill for discarded drugs, or seek the advice of a healthcare expert for any clarifications due to the potential ramifications of incorrectly billing any payor.