Use of JW and JZ Modifiers when Billing for Separately Payable Incident-to Supplies
Use of JW and JZ modifiers for drugs and biologicals
Under Medicare Part B, the JW and JZ modifiers are only used when billing for drugs and biologicals which are separately payable. The JW and JZ modifiers are not appropriate for billing incident-to supplies, even if such incident-to supplies are payable separately. In addition, discarded amounts of incident-to supplies are not payable by Medicare.
Skin substitutes
Skin substitute products marketed under a biologics license application (BLA), as set forth in section 351 of the Public Health Services (PHS) Act, continue to receive separate payment as a biological under section 1847A of the Social Security Act.
In the calendar year (CY) 2026 Physician Fee Schedule (PFS) final rule (CMS-1832-F) and CY 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) final rule (CMS-1834-FC), CMS finalized to pay separately for the provision of certain skin substitutes (hereinafter referred to as non-BLA skin substitutes) as incident-to supplies under the PFS in the non-facility setting, and under the OPPS/ASC in the facility setting, beginning January 1, 2026.
As a result, non-BLA skin substitutes are no longer payable under Medicare Part B as a drug or biological as of January 1, 2026, and only the administered portion is payable.
For dates of service starting January 1, 2026:
- If a provider or supplier administers an entire non-BLA skin substitute from the package or container (and no units are discarded), the JZ modifier is not appropriate when billing Medicare.
- If a provider or supplier administers a portion of a non-BLA skin substitute from the package or container and a portion is discarded, the provider or supplier may only bill for the units administered. It is not appropriate to bill Medicare for such discarded units under any circumstance. In other words, such units may not be billed with the JW modifier, and such units may not be included when billing for the administered amount.
For more information on revisions to skin substitutes for CY 2026, please review the CY 2026 Hospital OPPS/ASC final rule (CMS-1834-FC) fact sheet.