Under Medicare, use JW on a separate claim line for payable discarded units from a separately payable Part B drug supplied in a single-dose container. Use JZ on the administered line when no payable units were discarded. The correct modifier depends on the container type, billing unit, discarded quantity, and payment setting.
The Leftover in the Vial Is Usually Payable. The Claim Just Has to Add Up.
You buy a 100 mg single dose vial of a biologic. The patient needs 80 mg based on weight. The dose is administered. The remaining 20 mg goes in the sharps bin.
Physically, it is gone. On the billing side, you may still be entitled to reimbursement for that discarded portion when Medicare allows it and when it is billed correctly.
This is why drug wastage billing Medicare has become a high stakes topic in 2026. We are years into mandatory JW and JZ reporting expectations, and payers have gotten better at spotting claims where the math, the NDC package size, and the billed HCPCS units do not reconcile.
If your practice does not have a reconciled JW and JZ workflow, you risk two outcomes:
- You leave reimbursement unclaimed for allowable discarded drugs.
- You accumulate audit exposure on claims that do not meet reporting expectations.
CMS put a real number on this. In its 2019 Part B Discarded Drug Units Report, CMS said it paid $725 million for discarded amounts in 2018. That was 2.1 percent of everything Medicare allowed for Part B drugs that year.
The true figure is higher. CMS built that estimate from claims carrying the JW modifier at a time when almost nobody was using it. A 2021 National Academies study looked at the Part B drugs with the highest spending and found JW on fewer than 17% of claims. Two-thirds of providers with ten or more of those claims never used it once. That gap is the reason JZ exists. CMS needed a claim with no waste to say so directly, because silence could mean either that nothing was discarded or that somebody forgot.
Who Actually Pays for Discarded Drugs
There is a second reason CMS wants this data clean. Under the Infrastructure Investment and Jobs Act, manufacturers of certain single-dose container drugs owe CMS a refund when discarded amounts go past a set percentage. That percentage is 10 percent for most drugs. It is higher for a defined group that includes low-volume products and orphan drugs. CMS calculates those refunds from JW and JZ claim data.
In September 2025 CMS reported that refunds owed for the 2023 updated quarters and the 2024 new quarters came to more than $173 million. That money went into the Supplementary Medical Insurance Trust Fund. The next report is due in September 2026. Manufacturers pay those refunds. Practices do not. Your modifiers feed the calculation but the invoice goes to the drug maker. What is at stake for your practice is simpler. You get paid for discarded amounts you are owed and your claims stop coming back.
Since October 1, 2023, CMS has said that claims for single-dose container drugs without JW or JZ can be returned to you unprocessable until you resubmit them correctly. That is not a denial. An unprocessable claim carries no appeal rights. You correct it and send it again.
JW vs. JZ: What is the Difference?
Every row below comes from the CMS JW and JZ modifier FAQ. The last column gives the question number so you can check any line against the source.
The JW Modifier: Cost Recovery
Use this when you have unavoidable waste. By appending JW to a separate line for the discarded amount, you are validating that the waste was necessary. This allows you to bill for the full vial rather than just the administered dose.
The JZ Modifier: Compliance Verification
Use this when the full vial is administered. It does not generate extra revenue, but it is critical for claim cleanliness. It tells the payer, “We did not forget to report waste; there simply was not any.” Without it, the claim can come back to you unprocessable.
| Situation | Modifier | How the claim looks | FAQ |
|---|---|---|---|
| Part of the vial discarded, discarded amount is at least one billing unit | JW | Two lines. Line 1 is the administered units with no modifier. Line 2 is the same code with JW and the discarded units. | Q15 |
| Whole labeled amount given | JZ | One line. Administered units with JZ. | Q17 |
| Dose given is less than one billing unit | JZ | One line. The full billing unit with JZ. No JW line. | Q11 |
| More than one vial used for one dose, some discarded | JW | Two lines, totalled across all vials. Two 50 mg vials for an 80 mg dose at 1 mg per unit is 80 units, then 20 units with JW. | Q15 |
| More than one vial used, nothing discarded | JZ | One line with the combined units and JZ. | Q17 |
| Drug from a multi-dose container | Neither | Bill the administered amount only. The policy does not pay for these amounts. | Q7 |
| Overfill, meaning volume beyond the labeled amount | Neither | Never billable as administered or as discarded units. Prohibited since January 1, 2011. | Q10 |
| Drug packaged under OPPS status indicator N or ASC payment indicator N1 | Neither | Not separately payable so the policy does not apply. | Q23 |
| Separately payable drug in a hospital outpatient department or ASC | JW or JZ | Applies to OPPS status indicators G and K, plus ASC payment indicator K2. | Q21 |
| Single-dose container drug billed under a Not Otherwise Classified code in the physician office | JW or JZ | Required, with the exception of C9399. | Q14 |
What Applies Everywhere and What Depends on Your Contractor
Most JW and JZ guidance mixes two different things. Some of it is national CMS policy that binds every provider billing Part B. Some of it is one contractor’s published expectation for its own jurisdictions, which may not apply to you at all. Before you build a workflow around any wastage guidance, including this article, check which list it belongs in.
National CMS policy
These apply in every MAC jurisdiction.
- JW has been required since January 1, 2017 to report discarded amounts of a separately payable Part B drug from a single-dose container.
- JZ has been required since no later than July 1, 2023 to confirm there were no discarded amounts.
- From October 1, 2023, claims that do not report the modifiers correctly can be returned unprocessable until you resubmit them.
- Waste is billed on two lines. The administered units carry no modifier. The discarded units carry JW. No waste is billed on one line with JZ.
- CMS does not use fractional billing units.
- Overfill is never billable, either as administered units or as discarded units. That has been the rule since January 1, 2011.
- Multi-dose containers sit outside the policy. Neither modifier belongs on them.
- The modifiers do not apply in rural health clinics or federally qualified health centers, to drugs packaged under OPPS status indicator N or ASC payment indicator N1, or to inpatient claims paid under IPPS.
- The modifiers are not required for flu, pneumococcal or COVID-19 vaccines.
- The discarded amount has to be documented in the patient’s medical record.
Check With Your Contractor Or Payer
Get these in writing before you rely on them.
- Documentation specifics. CMS sets no required format, author or location. It tells providers to check whether their MAC has published more at the local level.
- Vial size selection. Some contractors say the units billed should match the smallest container you can buy that meets the dose while keeping waste down. That is jurisdiction guidance rather than a national rule.
- Medically Unlikely Edits. These caps are code specific and can limit payable units no matter what your arithmetic says.
- Multi-line claims. Where a drug goes past 9,999 billing units, CMS gives the structure but tells you to ask your MAC about further local requirements.
- Rounding a leftover smaller than one billing unit. CMS covers a dose smaller than one billing unit. It has published nothing on a leftover smaller than one unit when the dose spans several.
- Compounded preparations. NDC reporting for compounded doses is handled at the contractor and payer level.
- Commercial plans and Medicare Advantage. These are not bound by CMS national policy. The 2021 National Academies study found JW on about 3.6 percent of the commercial claims it reviewed against roughly 17 percent of Medicare claims for the same drugs.
- Medicaid. 340B and wastage rules differ by state program
The Clinical-to-Billing Workflow That Keeps JW/JZ Claims Audit-Proof
To capture this revenue without triggering an audit, you need a workflow that connects the clinical floor to the billing office.
Phase 1: The Chair Side (Nursing)
The nurse must document the exact amount wasted in the patient chart. “Discarded remainder” is not enough. The note must read: “Administered 2.5 mg. Discarded 1.0 mg from 3.5 mg single-use vial.”
What Your Documentation Needs to Show
CMS requires the discarded amount to be in the patient’s record and expects accurate purchasing records. It does not dictate a format. This is what a records request should be able to find without anyone rebuilding it afterwards.
- Drug name, HCPCS code and the billing unit you used
- NDC and labeled amount of every container opened, taken from the label rather than the overfill
- How many containers you opened
- Dose given, in the same unit as the label, and what the dose was based on
- Amount discarded, written as a number in the same unit. Discarded remainder is not a quantity
- The milligram to billing unit conversion, written out
- Who prepared the dose, who gave it and when
- The purchase or inventory record that ties these containers to this claim
Phase 2: The Translation (Coding)
The coder must convert those milligrams into HCPCS billing units. This is where most errors occur. You must use the correct HCPCS unit calculation drug wastage method.
The unit of measure for each J-code is published in the CMS HCPCS Level II code descriptor. For example, J9271 (Pembrolizumab/Keytruda) is billed per 1 mg. A 100 mg vial administered at 80 mg equals 80 units administered on Line 1 and 20 units wasted on Line 2 with JW. By contrast, J9035 (bevacizumab) is billed per 10 mg, so the same milligram figure gives you a tenth as many units. A 400 mg vial with 50 mg wasted equals 35 units administered and 5 units wasted. Always cross-reference the descriptor for every J-code your practice bills against the CMS list of single-dose container codes.
The Rounding Rule That Catches Most Billers
CMS does not pay in fractions of a billing unit. So when the dose you gave is less than one billing unit, you do not use JW at all. You report one full billing unit with JZ.
A drug billed per 10 mg comes in a vial labeled 10 mg. The patient gets 7 mg and 3 mg is discarded. The instinct is to bill 0.7 units on line one and 0.3 units with JW on line two. That is wrong. Report 1 unit with JZ on a single line. There is no JW line
Phase 3: The Claim (Billing)
The claim must be split. Line 1 is your J-Code with units administered. Line 2 is your J-Code with units wasted and the JW modifier.
Phase 4: The Verification (Auditing)
Run a spot check. Does the sum of Line 1 and Line 2 equal the total vial size or a multiple of it? If yes, send it.
Advanced Compliance: Compounding, Biosimilars, and 340B
Compounded Drug Wastage
When a pharmacy compounds a chemotherapy agent for a specific patient and the dose is wasted, JW billing rules still apply. NDC reporting for compounded preparations is handled at the contractor and payer level rather than by national CMS instruction, so confirm what your MAC expects. Document the compounding record and the specific reason for waste in the patient chart.
Biosimilar NDC Reporting
For practices using biosimilar versions of Avastin or Keytruda, verify that the NDC on every JW and JZ claim reflects the specific biosimilar product purchased. If you use the reference biologic NDC instead, the claim will fail MAC cross-referencing.
340B Drug Program Interaction
Buying through 340B does not change the modifier requirement. Covered entities report JW and JZ the same way anyone else does. For Medicare, 340B drugs are identified with the TB modifier. CMS told covered entities to stop using JG and report TB instead from January 1, 2025. UD is a Medicaid modifier rather than a Medicare one, so check your state program separately.
| Drug | HCPCS | One billing unit equals |
| Pembrolizumab (Keytruda) | J9271 | 1 mg |
| Nivolumab (Opdivo) | J9299 | 1 mg |
| Oxaliplatin | J9263 | 0.5 mg |
| Bevacizumab | J9035 | 10 mg |
| Infliximab, excludes biosimilar | J1745 | 10 mg |
A 100 mg dose is 100 units of pembrolizumab, 200 units of oxaliplatin or 10 units of bevacizumab. This is the most common source of unit errors on wastage claims.
Three Mistakes to Avoid Right Now
- Using JW on Multi-Dose Vials (MDVs): CMS says JW and JZ are not appropriate for drugs from multi-dose containers. The discarded drug policy does not pay for those amounts. CMS publishes no exception for expired or contaminated vials. If a payer tells you otherwise, get it in writing before you bill it.
- Confusing Overfill with Wastage: You cannot bill for the extra liquid manufacturers put in vials to ensure a full dose. You can only bill for the amount listed on the label that you did not use.
- Ignoring Private Payer Rules: While CMS mandates these modifiers, private payers often have their own specific rules. We track these nuances so you do not have to.
Don’t let your revenue cycle fall behind 2026 regulations. Our team specializes in Oncology billing and Radiology. We ensure every milligram you buy is accounted for and reimbursed.
If You Have Been Billing Without JW/JZ Modifiers
If your practice has been submitting single-dose vial claims without these modifiers, you have two paths to handle the risk.
Option 1: Proactive Self-Audit
Review the past 12 months of claims. Calculate your exposure and submit corrected claims or voluntary refunds where appropriate. Correcting errors before a payer finds them is better than waiting for a records request, though how that affects your exposure in any specific case is a question for your compliance counsel.
Option 2: Prospective Correction
Implement the correct JW/JZ workflow immediately for all new claims. While this does not fix the past, it stops the ongoing accumulation of audit risk. Either approach is better than waiting for a MAC demand letter.
Final Thought
JW and JZ are not complicated but they are strict about arithmetic. Every single-dose container line needs one of the two modifiers. The units have to match the labeled amount of what you opened. The discarded amount has to be in the chart.
Practices tend to fail the same three ways. Waste that was payable never gets billed. A modifier gets left off and the claim comes back. Or the units on the claim do not match the containers in the purchase record.
Build one check into your workflow. Add the administered units to the discarded units. That total should equal the labeled amount of every container you opened, converted to billing units. If it does not match, something upstream is wrong. Finding it before the claim goes out costs far less than finding it after a records request lands.
