Billing and Coding: Complex Drug Administration Coding

Internet-Only Manuals (IOMs):

• CMS IOM Publication 100-02, Medicare Benefit Policy Manual,
  • Chapter 15, Sections 50 Drugs and Biologicals, 50.3 Incident-to Requirements, and 60.1 Incident To Physician’s Professional Services
• CMS IOM Publication 100-04, Medicare Claims Processing Manual,
  • Chapter 12, Section 30.5 Payment for Codes for Chemotherapy Administration and Nonchemotherapy Injections and Infusions, and
  • Chapter 17, Section 40 Discarded Drugs and Biologicals

Social Security Act (Title XVIII) Standard References:

• Title XVIII of the Social Security Act, Section 1833(e) states that no payment shall be made to any provider of services or other person under this part unless there has been furnished such information as may be necessary in order to determine the amounts due such provider or other person under this part for the period with respect to which the amounts are being paid or for any prior period.
• Title XVIII of the Social Security Act, Section 1861(s)(2)(A) and (B) Medical and Other Health Services
• Title XVIII of the Social Security Act, Section 1861(t)(1) Drugs and Biologicals
• Title XVIII of the Social Security Act, Section 1862(a)(1)(A) excludes expenses incurred for items or services which are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member

The Medicare Administrative Contractor (MAC) has determined in review of submitted claims that there is inappropriate use of CPT codes 96401-96549 for chemotherapy and other highly complex drug or highly complex biologic agent administration.

Coding Guidance

Notice: It is not appropriate to bill Medicare for services that are not covered as if they are covered. When billing for non-covered services, use the appropriate modifier.

The Current Procedural Terminology (CPT^®) codebook contains the following information and direction for the Chemotherapy and Other Highly Complex Drug or Highly Complex Biological Agent Administration CPT codes: “Chemotherapy administration codes 96401-96549 apply to parenteral administration of non-radionuclide anti-neoplastic drugs; and also to anti-neoplastic agents provided for treatment of noncancer diagnoses (e.g., cyclophosphamide for auto-immune conditions) or to substances such as certain monoclonal antibody agents, and other biologic response modifiers. The highly complex infusion of chemotherapy or other drug or biologic agents requires physician or other qualified health care professional work and/or clinical staff monitoring well beyond that of therapeutic drug agents (96360-96379) because the incidence of severe adverse patient reactions are typically greater. These services can be provided by any physician or other qualified health care professional. Chemotherapy services are typically highly complex and require direct supervision for any or all purposes of patient assessment, provision of consent, safety oversight, and intraservice supervision of staff. Typically, such chemotherapy services require advanced practice training and competency for staff who provide these services; special considerations for preparation, dosage, or disposal; and commonly, these services entail significant patient risk and frequent monitoring. Examples are frequent changes in the infusion rate, prolonged presence of the nurse administering the solution for patient monitoring and infusion adjustments, and frequent conferring with the physician or other qualified health care professional about these issues. When performed to facilitate the infusion of injection, preparation of chemotherapy agent(s), highly complex agent(s), or other highly complex drugs is included and is not reported separately. To report infusions that do not require this level of complexity, see 96360-96379. Codes 96401-96402, 96409-96425, 96521-96523 are not intended to be reported by the individual physician or other qualified health care professional in the facility setting.”

“The term ‘chemotherapy’ in 96401-96549 includes other highly complex drugs or highly complex biologic agents.” (End of quotation from CPT^®)

As stated in the CMS IOM Publication 100-04, Medicare Claims Processing Manual, Chapter 12, Section 30.5 Payment for Codes for Chemotherapy Administration and Nonchemotherapy Injections and Infusions, Part D-Chemotherapy Administration, “A/B MACs (B) may provide additional guidance as to which drugs may be considered to be chemotherapy drugs under Medicare.”

Not Otherwise Classified (NOC) Drug Billing

Office/Clinic

Providers submit NOC codes in the 2400/SV101-2 data element in the 5010 professional claim transaction (837P). When billing an NOC code, providers are required to provide a description in the 2400/SV101-7 data element. The 5010 TR3 Implementation Guide instructs: "Use SV101-7 to describe non-specific procedure codes." (Do not use the 2400 NTE segment to describe non-specific procedure codes with 5010). The SV101-7 data element allows for 80 bytes (i.e., characters, including spaces) of information.

In order for the A/B MAC to correctly reimburse NOC drugs and biologicals, providers must indicate the following in the 2400/SV101-7 data element, or Item 19 of the CMS 1500 form:

• The name of the drug,
• The total dosage (plus strength of dosage, if appropriate), and
• The method of administration.

Important: List one unit of service in the 2400/SV1-04 data element or in item 24G of the CMS 1500 form. Do not quantity-bill NOC drugs and biologicals even if multiple units are provided. Medicare determines the proper payment of NOC drugs and biologicals by the narrative information, not the number of units billed.

Claims for NOC drugs and biologicals will reject as unprocessable if any of the information listed above is missing, or if the NOC code is billed with more than one unit of service. (Note: The remittance notice will include remark code M123, "Missing/incomplete/invalid name, strength, or dosage of the drug furnished," even if the rejection is due to the number of units billed).

Ambulatory Surgical Centers (ASCs) and Hospital Outpatient Departments

HCPCS code C9399, Unclassified drug or biological, should be used for new drugs and biologicals that are approved by the United States (U.S.) Food and Drug Administration (FDA) on or after January 1, 2004, for which a specific HCPCS code has not been assigned.

JW Modifier

Effective January 1, 2017, claims for discarded drugs or biologicals amount not administered to any patient shall be submitted using the JW modifier. The JW modifier is required on claims to identify unused drugs or biologicals from single use vials or single use packages that are opened, and the entire dose/quantity is not administered, and the remainder is discarded (except those provided under the Competitive Acquisition Program [CAP] for Part B drugs and biologicals).

Providers must document the discarded drugs or biologicals in the patient's medical record.

This modifier, billed on a separate line, will provide payment for the amount of discarded drugs or biologicals.

A situation in which the JW modifier is not permitted is when the actual dose of the drug or biological administered is less than the billing unit. For example, one billing unit for a drug is equal to 10mg of the drug in a single use vial. A 7mg dose is administered to a patient while 3mg of the remaining drug is discarded. The 7mg dose is billed using one billing unit that represents 10mg on a single line item. The single line item of 1 unit would be processed for payment of the total 10mg of drug administered and discarded. Billing another unit on a separate line item with the JW modifier for the discarded 3mg of drug is not permitted because it would result in overpayment. Therefore, when the billing unit is equal to or greater than the total actual dose and the amount discarded, the use of the JW modifier is not permitted.

JZ Modifier

Effective 07/01/2023, providers must report the JZ modifier (Zero drug amount discarded/not administered to any patient) when there is no wastage to report. This must be reported on all claims that bill for drugs separately payable under Part B when there is no discarded amount from single-dose containers or single-use packages. For the amount administered, the claim line must include the billing and payment code, the JZ modifier showing no discarded amounts, and the number of units administered in the units’ field.

The JW and JZ modifier policy does not apply for drugs that are not separately payable, such as packaged OPPS or ASC drugs, or drugs administered in the FQHC or RHC setting or to drugs assigned status indicator N (Items and Services Packaged into APC Rates) under the OPPS. Similarly, the JW and JZ modifiers do not apply to drugs assigned payment indicator “N1” (ASC).

Route of Administration Modifier

The use of the JA and JB modifiers is required for drugs which have one HCPCS Level II (J or Q) code but multiple routes of administration. Drugs that fall under this category must be billed with the JA modifier for the intravenous infusion of the drug or billed with the JB modifier for the subcutaneous injection of the drug.

The lists below are not all-inclusive lists and may be subject to further revision.

Subcutaneous and Intramuscular Injection Non-Chemotherapy

The administration of the following drugs should not be billed using a chemotherapy administration code. Instead, the administration of the following drugs in their subcutaneous or intramuscular forms should be billed using CPT code 96372 - therapeutic, prophylactic, or diagnostic injection (specify substance or drug); subcutaneous or intramuscular.

To avoid unnecessary rejections, claims for these types of drugs and their non-chemotherapy administration should be billed as a pair on a separate claim from any chemotherapy.

Generic/Trade Names

*When billing filgrastim (HCPCS code J1442, Q5101 or Q5110), append the JA modifier for the IV formulation or the JB modifier for the subcutaneous formulation.

**Effective 01/01/2018, providers are instructed to use 96377 for the on-body application injector for Neulasta^® Onpro Kit.

Infusions Non-Chemotherapy

The administration of the following drugs should not be billed using a chemotherapy administration code. The IV administration of the drugs below should be billed with the appropriate IV injection/infusion CPT code listed under Therapeutic, Prophylactic, and Diagnostic Injections and Infusions in the CPT^® codebook.

To avoid unnecessary rejections; claims for chemotherapy drugs and their chemotherapy administration should be billed as a pair on a separate claim. In this circumstance, the Medicare Claims Processing System will still allow the add-on codes 96367 and 96368 if billed appropriately on a separate claim from the initial claim for the chemotherapy drug and administration codes with the same date of service.

Generic/Trade Names

*When billing abatacept (HCPCS code J0129), append the JA modifier for the IV formulation or the JB modifier for the subcutaneous formulation. The subcutaneous formulation is on the Self-Administered Drug Exclusion List (SAD List).

**When billing filgrastim (HCPCS code J1442, Q5101 or Q5110), append the JA modifier for the IV formulation or the JB modifier for the subcutaneous formulation.

***When billing octreotide acetate (HCPCS code J2354) append the JA modifier for the IV formulation or the JB modifier for the subcutaneous formulation. The subcutaneous formulation is on the SAD List.

****Effective September 23, 2016, IV ustekinumab (Stelara^®) should be billed with HCPCS code J3590 (OPPS: C9399 for dates of service [DOS] before 04/01/2017; C9487 for DOS from 04/01/2017 to 06/30/2017, Q9989 for DOS from 07/01/2017-12/31/2017 and J3358 for DOS 01/01/2018 and after) for the initial IV dose of Stelara^® when used for Crohn’s disease and Ulcerative Colitis. Each subsequent subcutaneous dose must be billed with J3357. This IV formulation is now FDA approved for Crohn’s disease and Ulcerative Colitis. On and after July 31, 2017, both the drug and administration should be billed on the same claim with no other drugs or administration to prevent inappropriate claim rejection.