Pharmacy Question for the Week of October 22, 2018

Question:

What is the correct way to bill for Q4116—AlloDerm, per square centimeter? I was informed our facility does not charge per square centimeter; they just charge a quantity of 1 for the full piece/sheet. Also, what is the compliant way to handle the waste of these products since modifier JW is not appropriate?

Answer:

HCPCS level II code Q4116 should be reported with the number of units applicable to the square centimeters of the skin substitute used. Documentation in the procedure note should include the dimensions (total square centimeter) of the product applied, not the size of the wound treated.

The JW modifier (drug amount discarded/not administered to any patient) may be used when any portion of a drug or biological is discarded from a single-dose vial or single-use package (per Medicare transmittal R3538CP). The JW modifier is currently required on Medicare claims when a portion of the drug/biological is discarded, and the HCPCS code is assigned to outpatient prospective payment status indicator G (pass-through drugs and biologicals) or K (nonpass-through drugs and nonimplantable biologicals, including therapeutic radiopharmaceuticals).

Even though HCPCS code Q4116 is assigned OPPS status indicator N, there must be documentation in the patient medical record of the amount not used/wasted if the hospital wants to bill for the entire package. There are currently no instructions for the billing of packaged drugs/biologicals so either report on the claim one line with total units for the single-use package, or one claim line will represent the HCPCS code with number of unit(s) for the product used and the second line will represent the HCPCS code, modifier JW and the number of unit(s) for the amount discarded. Other payer guidance may vary since many do not recognize use of JW modifier.

Source: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3538CP.pdf