CurrentBlue Cross Blue Shield - IllinoisPolicy CPCPO17

Wasted/Discarded Drugs and Biologicals Policy

This policy governs billing, coding, and reimbursement practices for wasted or discarded drugs and biologicals (including JW and JZ modifier usage) for Blue Cross Blue Shield of Illinois providers and suppliers.

Policy Summary

PayerBlue Cross Blue Shield - Illinois

PolicyWasted/Discarded Drugs and Biologicals Policy

Policy CodePolicy CPCPO17

Change TypeAnnual review with content and formatting updates

Effective DateNov 25, 2025

Next Review Date

Key ActionDocument dose administered and discarded amount with date/time and reason; bill discarded amount on a separate line with JW modifier and include NDC when required.

SourceLink

POLICY UPDATE CHANGES

Sections revised or added including JZ Modifier Usage, Suppliers- Modifier Usage, When Drugs and Biologicals are not Eligible for Reimbursement, and Additional Resources updated.

1.0policy version

2025-11-25Plan effective date

08/19/2025last review

multipleexamples

manynon-reimbursable

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Reimbursement Criteria and Exclusions

Reimbursement criteria and exclusions

Reimbursement for discarded drugs and biologicals is eligible only when ALL of the following are met; several exclusions and limited exceptions apply.

ALL of the following

ALL of the following
- Dose administered, discarded amount, exact date and time of administration, and reason for wastage are clearly documented in the medical record
ALL of the following
- Discarded amount is billed on a separate claim line from the administered amount with the correct CPT/HCPCS code, units, and JW modifier for all non‑inpatient places of service
- When NDC‑based reimbursement applies, NDC codes must be included with the CPT/HCPCS code and NDC units billed must correspond to the CPT/HCPCS units and units of measure
ALL of the following
- The drug or biological administered is only available in a single‑use vial or single‑use package (multi‑use vials/packages are not eligible for reimbursement of discarded amounts)
- Discarded drug or biological was not and will not be administered to another member/patient
- Units billed correspond with the smallest dose or vial available for purchase from the manufacturer that provides the appropriate dosage for the member

Limited exceptions where whole vial/package waste may be eligible

Whole vial/package waste due to manufacturer defect, shipping damage, or improper storage may be considered for reimbursement on a case‑by‑case basis
Scenarios that may be eligible: IUD insertion billed same date of service; member death, hospitalization, or incapacitation after home‑delivery shipment; disaster replacement (e.g., hurricane); theft from member

ALL of the following

The Plan reserves the right to request supporting documentation and to review claims against plan documents, provider contract, applicable medical policies, and coding policies

ALL of the following

Suppliers who prepare but do not administer must append JW when amounts are discarded during preparation and append JZ when no amounts are discarded
For End Stage Renal Disease (ESRD) facilities, append AY on the same claim line with JZ when applicable

ALL of the following

When the amount administered is not a multiple of the CPT/HCPCS code unit, round to the next highest unit; units billed must reflect the numeric quantity and appropriate unit of measure (e.g., mL, gram, units of use)

ALL of the following

Single‑use vials/packages reimbursed for discarded amounts for one member may not be billed for another member
Purchases of larger packaging will not be reimbursed when more appropriate packaging can be purchased

ALL of the following

Discarded drugs/biologicals must have been appropriately administered to the member for the member’s condition and the unused portion legitimately discarded

ALL of the following

Failure to meet the criteria above will result in non‑reimbursement

Billing Modifiers, Units, and Coding Rules

Modifiers for discarded drug billingModifierCovered

JW	Modifier for amount of drug or biological discarded
JZ	Modifier indicating no discarded amount from single-use vial/package
AY	Item or service furnished to an ESRD patient that is not for the treatment of ESRD (used with JZ when applicable)

Modifiers - usage notesmixed

JW	Apply when discarded amount from single-use vial/package is billed on separate line with correct CPT/HCPCS code and units; NDC must be included for NDC-based reimbursement
JZ	Append to claims in all instances where there were no discarded drug amounts
AY	For ESRD facilities, append AY on same claim line with JZ when applicable

Units billing rule — how to bill units, rounding rules, total dose calculation guidance

Units to billBill units in multiples of the dosage specified in the CPT/HCPCS code; units billed must correspond with the smallest dose or vial available for purchase.

Rounding ruleIf the amount administered is not a multiple of the CPT/HCPCS code unit, round to the next highest unit in the CPT/HCPCS description.

Total dose limitTotal dose (administered plus wasted) must not exceed the vial amount.

NDC correspondenceWhen billing for drugs to receive NDC‑based reimbursement, include the NDC and ensure NDC units correspond to CPT/HCPCS units and units of measure (eg, mL, gram).

Documentation and Claim Submission Requirements

Documentation Required

Documentation and Claim Submission Requirements

Providers must document and submit claims for administered and discarded drugs/biologicals consistent with the Plan's billing rules. The Plan may request supporting documentation; failure to provide complete records can delay or impact claim processing and reimbursement. Medical records must clearly document the total dose prepared, the amount administered, the amount discarded (wasted), exact date and time of administration, and the reason for wastage. Units of service billed must follow the CPT/HCPCS code descriptor (bill in multiples of the dose specified). If the amount administered is not an exact multiple of the code's dosage, round to the next highest unit. Total billed dose (administered plus discarded) must not exceed the vial/package amount.

Include in the medical record: total dose prepared, dose administered, discarded amount, exact date/time of administration, and reason for wastage.
Bill administered and discarded amounts on separate claim lines using the same CPT/HCPCS code; discarded line must include the appropriate modifier (JW) where required.
Report units in multiples consistent with the CPT/HCPCS description; if not a multiple, round to the next highest unit.
Do not bill more than the labeled vial/package amount (administered + discarded ≤ vial/package amount).
Include NDC when billing drugs to receive NDC-based reimbursement; NDC units must correspond to CPT/HCPCS units and units of measure (e.g., mL, grams, units of use).

Key Terms and Modifier Definitions

Drug Waste — definition of drug waste

DefinitionDrug Waste: The partial vial, package, or product of a biologic that is discarded and not administered to any member.

Not adminstered to another memberDiscarded drugs or biologicals must not be administered to another member/patient to be eligible for reimbursement.

OverfillOverfill provided without charge may not be billed; overfill harvested from single‑use containers or pooled from multiple containers is not reimbursable.

JW Modifier — definition and purpose

DefinitionJW Modifier: CPT/HCPCS Level II modifier used to report the amount of drug or biological that is discarded (amount not administered to any member).

Use case

Policy Summary

PayerBlue Cross Blue Shield - Illinois

PolicyWasted/Discarded Drugs and Biologicals Policy

Policy CodePolicy CPCPO17

Change TypeAnnual review with content and formatting updates

Effective DateNov 25, 2025

Next Review Date

Key ActionDocument dose administered and discarded amount with date/time and reason; bill discarded amount on a separate line with JW modifier and include NDC when required.

SourceLink

On This Page

Billing Rule

Supplier and ESRD Modifier Actions

Use of the JW and JZ modifiers is required on professional and supplier claims to indicate discarded or non-discarded drug amounts. Suppliers who prepare but do not administer drugs must follow the same modifier rules. For ESRD facility billing, append modifier AY on the same claim line with JZ when the item/service is furnished to an ESRD patient and is not for the treatment of ESRD.

Append modifier JW to the claim line that describes the discarded amount. The JW line must use the same CPT/HCPCS code as the administered line and list the discarded units.
Append modifier JZ to claim lines when no amount of drug was discarded.
Suppliers: if preparation results in discarded drug and the supplier is not administering the drug, append JW on the discarded line; if no discard, append JZ.
For ESRD facilities, when the item/service is not for treatment of ESRD and there is no discarded amount, append AY and JZ on the same claim line as appropriate.
Ensure JW/JZ usage follows place-of-service rules (JW separate line billing for all non-inpatient places of service).

Append JW on the claim line reporting the discarded amount billed on a separate line from the administered amount for non‑inpatient places of service.

Supplier applicationSuppliers who prepare but do not administer must append JW if amounts are discarded during preparation.

JZ Modifier — definition and indication of no waste

DefinitionJZ Modifier: Modifier indicating there were no discarded drug amounts from single‑use vials or single‑use packages.

When to useAppend JZ to claims in all instances in which there were no discarded drug amounts.

ESRD combinationFor ESRD facilities, append AY on the same claim line with JZ when the item/service is furnished to an ESRD patient that is not for the treatment of ESRD.

Single-use vial/package — definition

DefinitionSingle‑use vial/package: A drug or biologic package that allows only one (1) dose to be withdrawn for administration by injection or infusion.

Reimbursement requirementDiscarded amounts are eligible for reimbursement only when the drug is available in a single‑use vial or single‑use package.

Overfill exclusionProviders may not bill for overfill harvested from single‑use containers, including pooled overfill from more than one container.

Multi-use vial/package — definition

DefinitionMulti‑use vial/package: A drug or biologic package that allows more than one (1) dose to be withdrawn for administration by injection or infusion.

JW not appropriateUse of modifier JW is not appropriate for drugs that are from multi‑use vials or packages.

Reimbursement statusDiscarded amounts from multi‑use vials/packages are not reimbursable under this policy.