Update for the Appropriate Use of the JZ Modifier

The JZ modifier will show Medicare if providers are using pharmaceuticals efficiently by identifying the amount of unused and discarded drugs from single-dose containers or single-use packages. One way to remember the correct use of these drugs is waste vs zero-waste.

Effective July 1, 2023, providers and suppliers were required to report the JZ modifier on all claims that bill for drugs separately payable under Medicare Part B when there are no discarded amounts from single-dose containers or single-use packages.

With respect to skin substitute grafts or CTPs (Cellular and/or Tissue Based Products), per CMS, the JZ modifier was to be used effective July 1, 2023, in the following fashion:

•       • Effective date July 1, 2023
•       • JW and JZ Modifier Billing Guidelines
  •             ○ JZ Modifier is a HCPCS Level II modifier reported on a claim to attest that no amount of CTP was discarded and is eligible for payment
  •             ○ To submit claims for a waste-required claim, submit two complete claim lines.
    •             ​​​​​​​​​​​​​​     ◦ Claim line #1:
    •             ​​​​​​​​​​​​​​     ◦ HCPCS Level II code for CTP applied
    •             ​​​​​​​​​​​​​​     ◦ No modifier appended
    •             ​​​​​​​​​​​​​​     ◦ Number of units of CTP applied
    •             ​​​​​​​​​​​​​​     ◦ Calculated submitted price for ONLY the amount of CTP applied
    •             ​​​​​​​​​​​​​​     ◦ Claim line #2
    •             ​​​​​​​​​​​​​​     ◦ HCPCS Level II code for CTP wasted
    •             ​​​​​​​​​​​​​​     ◦ JW modifier appended to HCPCS Level II code to indicate CTP wasted
    •             ​​​​​​​​​​​​​​     ◦ Number of units of CTP wasted
    •             ​​​​​​​​​​​​​​     ◦ Calculated submitted price for ONLY the amount of CTP wasted

• •             ​​​​​​​○ To submit claims for a non-discarded claim, submit one complete claim line.
    •             ​​​​​​​​​​​​​​     ◦ HCPCS Level II code for CTP applied
    •             ​​​​​​​​​​​​​​     ◦ JZ modifier to indicate no waste of CTP
    •             ​​​​​​​​​​​​​​     ◦ Number of units of CTP applied
    •             ​​​​​​​     ◦ Calculated submitted price for the amount of CTP applied

As of October 1, 2023, there has been an update for the appropriate use of the JZ modifier for skin substitutes. At this point in time, it only applies to two out of the seven Medicare Administrative Contractors, National Government Services (NGS) and CGS (Celerian Group). With respect to CGS, only Ohio and Kentucky are affected.

Both NGS and CGS no longer require the JZ modifier to be used when a skin substitute or CTP is applied and there is no waste. If the JZ modifier is appended, this will result in a rejection of the claim. The JW modifier should still be used to report wastage. You will continue to report the JW modifier on the portion of the product that was wasted or discarded.

This is my opinion.

Michael G. Warshaw

DPM, CPC