Many payers have policies against so-called “pharmaceutical wastage,” which require providers to report — and in some cases, minimize — the amount of biologics they discard, as we noted in Billing for biological products. Medicare, as well as other insurers, require that discarded doses be reported on a separate line of the claim form using modifier “JW.” Providers are expected to be aware of and follow policies, provided they have been properly published by the insurer.
Recently, many allergists have been asked to make refunds associated with discarded doses of biologics on the grounds that the allergist failed to minimize wastage. Below are tips for appealing these decisions:
When did the insurer notify its providers of its pharmaceutical wastage policy, and what is the effective date of that policy?
Physicians cannot be held responsible for complying with a policy they were not informed of or was not in effect when claims were submitted. Check both the publication date of any policy and its effective date, and make sure you are not being asked to refund amounts for claims submitted prior to those dates. Note, however, that you are responsible for knowing about policies that were published and the fact that you were not aware is not likely to be persuasive.
Use of single-dose vials instead of pre-filled syringes
Most refunds relate to use of single-dose vials rather than pre-filled syringes. Pre-filled syringes (PFS) did not become available until October 2018. Therefore, insurers should not expect zero wastage before that date. Depending on the dates of service, your appeal may need to explain that at the time the claim was submitted, PFS were not available and that, when using single-dose vials, it is generally impossible to avoid some discarded doses. Describe to what extent you took steps to minimize wastage.
If you continued to use single-dose vials after PFS became available to use up existing inventory, you should explain this. We believe it is appropriate to be paid for discarded doses if you are using up existing supplies before switching to PFS.
Clinical Documentation of Medical Necessity
If you received pre-authorization (PA) for use of Xolair or other biologics, documentation of this may help you establish medical necessity and support your appeal. If PA was not obtained or required, it may be helpful to provide documentation supporting medical necessity anyway.
Depending on the amount of the requested refund, it may be helpful to seek the advice of an attorney to assist you in appealing the determination.