We continue to receive calls regarding the best way to document and code for non-compounded intravitreal anti-VEGF agents like Eylea (aflibercept, Regeneron) and Lucentis (ranibizumab, Genentech). The confusion involves documenting the disposal of the overfill, and whether reporting that disposal is required on a claim to Medicare.  

Some of the injectable drugs that a retina practice uses contain a significant volume of overfill and creative offices occasionally inquire about using the overfill and/or billing it to a third-party payer.

CMS Sows Seeds of Confusion
In June 2016, the Center for Medicare and Medicaid Services (CMS) created confusion when it published Transmittal 3538 on the use of modifier JW, defined as “Drug amount discarded/not administered to any patient.” The transmittal stipulates:

Effective January 1, 2017, when processing claims for Part B drugs and biologicals (except those provided under CAP), the use of the JW modifier to identify unused drugs or biologicals that are appropriately discarded is required.

The transmittal further requires providers to document any discarded drug in the chart, stating:

Also, effective January 1, 2017, providers are required to document the discarded drug or biological in the patient’s medical record.1

Since the release of the transmittal, we are receiving questions like: “Do I have to report the discarded overfill on a claim?” and “Do I have to document the overfill in the chart?” Here, I’ll provide some answers.

Role of JW Modifier
The transmittal failed to provide clarity regarding the reporting of discarded drug related to manufacture overfill vs. discarded drug included in the Food and Drug Administration-labeled volume/dosage. In August 2016, CMS released an FAQ discussing the JW Modifier and Transmittal 3538. This aimed to clarify the confusion the transmittal raised, stating, “The modifier is not required if no discarded drug is being billed to any payer.”  The FAQ further stated, “The JW modifier must not be used to report overfill wastage.”2

CMS provides guidance regarding discarded drugs and biologicals. The Medicare Claims Processing Manual (MCPM) Chapter 17 §40, “Discarded Drugs and Biologicals,” states:   

When a physician, hospital or other provider or supplier must discard the remainder of a single-use vial or other single-use package after administering a dose/quantity of the drug or biological to a Medicare patient, the program provides payment for the amount of drug or biological discarded as well as the dose administered, up to the amount of the drug or biological as indicated on the vial or package label.3

As you can see, CMS provides reimbursement for wasted or discarded drugs. However, MCPM stipulates reimbursement for the discarded drug up to the amount on the package label. The amount of drug enumerated on the package label does not include manufacturer overfill. CMS reimburses drugs based on average sales price (ASP), determined by using the amount of product listed on the FDA-approved label. The final rule for the 2011 Medicare Physician Fee Schedule (MPFS) addressed the ASP calculation and intentional overfills in 42 Code of Federal Regulations (CFR) Chapter IV §414.904(a)(3):4

(i)CMS calculates an average sales price payment limit based on the amount of product included in a vial or other container as reflected on the FDA-approved label.

(ii) Additional product contained in the vial or other container does not represent a cost to providers and is not incorporated into the ASP payment limit.

(iii) No payment is made for amounts of product in excess of that reflected on the FDA-approved label.

The comments section of 42 CFR addresses the issue of overfill billing directly by stating:

In accordance with our current policy, as explained above, providers may not bill Medicare for overfill harvested from single- use containers, including overfill amounts pooled from more than one container, because that overfill does not represent a cost to the provider.4

Clearly, only the amount on the FDA-approved package label is reimbursed as part of the ASP.   

Documenting the Overfill
We receive further questions about what, if anything, should be documented regarding the disposal of the overfill. The same FAQ also discusses the required documentation for discarded drugs:

CMS expects that providers and suppliers will maintain accurate (medical and/or dispensing) records for all beneficiaries as well as accurate purchasing and inventory records for all drugs that were purchased and billed to Medicare.2

Single-dose vials, like Lucentis and Eylea used per the FDA label, do not contain any billable discarded drug. However, to avoid any probing questions from third-party payers, chart notes and operative reports should include notations regarding the discarded overfill.
Most physicians delivering intravitreal injections have detailed templates describing the procedure, including the dosage administered. We recommend adding a statement to the template or operative report about the discarded overfill, such as, “Manufacturer overfill was appropriately discarded.”    

There is significant confusion regarding the reporting and chart documentation of wasted and discarded drugs. When the waste represents manufacturer overfill, document the disposal in the chart/operative report, but do not add it to the claim using the JW modifier.  RS

1. CMS Transmittal 3538. Change Request 9603. Published June 9, 2016. Effective January 1, 2017. Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3538CP.pdf.Accessed October 21, 2016.
2. Medicare Program. JW Modifier: Drug/Biological Amount Discarded/Not Administered to Any Patient Frequently Asked Questions. Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/JW-Modifier-FAQs.pdf. Accessed October 21, 2016.
3. CMS Medicare Claims Processing Manual Chapter 17§40 Discarded Drugs and Biologicals. Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c17.pdf.  Accessed October 21, 2016.
4. U.S. Government Printing Office. CY 2011 PFS final rule. Federal Register. 2010; 75(228) §414.904 Average sales price as the basis for payment. Available at: https://www.gpo.gov/fdsys/pkg/FR-2010-11-29/pdf/2010-27969.pdf.Accessed October 21, 2016.