Appropriate drug billing Part A

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Home ► Claim submission guidelines ► Appropriate drug billing Part A

Last Modified: 6/7/2024 Location: FL, PR, USVI Business: Part A

Appropriate drug billing Part A

When billing for drugs, please be sure that units administered are accurately reported in dosage/units specified in the HCPCS long code descriptor.

Before submitting the claim, review the long descriptors for the HCPCS code you are billing. The short descriptors are limited to 28 characters and don’t always capture the complete description of the drug.

Hospitals are strongly encouraged to report charges for all drugs, biologicals, and radiopharmaceuticals regardless of if paid separately or packaged. Don’t bill units based on the way the drug is packaged, stored, or stocked.

It is not appropriate to bill for the full amount of a drug when it has been split between two or more patients. Bill only for the amount administered to each patient.

For information on billing two or more drugs mixed together or the use of unlisted or not otherwise classified (NOC) codes, review the article Appropriate use of NOC codes when billing drugs and biologicals.

Reporting the correct units

Examples of how to report single and multiple units on a claim.

• If the description for the drug code is 6 milligram (mg), and 6 mg of the drug was administered to the patient, the units billed should be 1.

• To calculate this, it is 6 mg (administered)/6 mg (HCPCS code description) = 1 unit

• If the description for the drug code is 50 mg, and 200 mg of the drug was administered to the patient, the units billed should be a total of 4.

• To calculate this, it is 200 mg (administered)/50 mg (HCPCS code description) = 4 units

• If the HCPCS code descriptor for the drug code specifies 1 mg and a 10 mg package of the drug was administered to the patient, the units billed should be 10 even though only 1 mg was administered.

• To calculate this, it is 10 mg (administered)/1 mg (HCPCS code description) = 10 units

Example of coding based on the dosage descriptor when the dosage is not a multiple of the code descriptor. Remember to round to the next highest unit for the code.

• Description of drug is 6 mg

• 10 mg administered

• 10 mg (administered)/6 mg (HCPCS code description) = 1.67 units

• 2 units are billed due to rounding to the next highest unit

Example of full dosage provided is less than the dosage for the code descriptor specifying the minimum dosage for the drug. In this situation, report the code for the minimum dosage amount.

• Description of drug is 50 mg

• 48 mg administered

• 48 mg (administered)/50 mg (HCPCS code description) = 0.96 units

• 1 unit is billed due to reporting the code for the minimum dosage amount

Appropriate revenue codes

0636 – used to report drugs, biologicals and unclassified radiopharmaceuticals, drugs, and biologicals (C9399)

0343 – used to report diagnostic radiopharmaceuticals

0344 – used to report therapeutic radiopharmaceuticals

Discarded drugs

CMS encourages physicians, hospitals and other providers and suppliers to care for and administer drugs and biologicals to patients in such a way that they can use drugs or biologicals most efficiently, in a clinically appropriate manner.

When billing for a drug from a single-dose container or single-use package and part of the drug is being discarded, bill the discarded amount with the JW modifier on a separate line.

Example:

• The patient received 150 mg of JXXXX from a 200 mg single-use package. Due to the packaging of the drug, 50 mg weren’t used and were discarded. 1 mg = 1 unit

• On line 1, report JXXXX with 150 units

• On line 2, report JXXXX with modifier JW and 50 units

If you didn’t discard any of the drug from a single-dose container or single-use package, report the JZ modifier on the claim starting on July 1, 2023.

Example:

• The patient received 200 mg of JXXXX. This single-use package contained 200 mg and none of the drug was discarded.

• Report JXXXX with modifier JZ and 200 units.

Multi-use containers or packages are not subject to payment for discarded amounts of the drug. Only report the amount administered.

Example:

• The patient received 160 mg of JXXXX. This multi-use package contains 400 mg. 10 mg = 1 unit

• Report one line of JXXXX with 16 units

Incorrect billing may result in the denial of the claim.

For more information on using the JW and the JZ modifier review the article Drugs and biologicals Part A Using the JW and JZ modifiers.

Reporting subsequent dose in a series

To distinguish between the initial dose of a drug and subsequent doses of that same drug used in a sequential series in the treatment of a condition where drugs are administered in a series throughout a course of therapy, report modifier EJ to identify the subsequent doses.

• Do not report an initial dose of a drug with the EJ modifier.

• The EJ modifier is informational only.

References:

• CMS IOM Pub. 100-04, Medicare Claims Processing Manual, Chapter 17 external pdf file

• Discarded Drugs and Biologicals – JW Modifier and JZ Modifier Policy Frequently Asked Questions external pdf file

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